Ikea Has New Business Plan, And It's Awesome ⋆

Ikea Has New Business Plan, And It’s Awesome

Imagine leasing furniture to decorate your home much like leasing a car or renting designer clothing!  Once your lease runs out, you simply return the merchandise and get something new. That’s what Ikea has in mind with their furniture instead of outright selling the items.

The Financial Times has reported that Ikea, the largest furniture retailer, is getting ready to launch a leasing model where customers can just rent out everything from tables to office equipment.

Just think about it, you are getting ready to remodel your kitchen or living room and discover that instead of buying new items in exchange of your worn out things, you just return everything and get something else. Once an item has been returned to Ikea, it is cleaned, refurbished, and then goes back into rentals or sold for someone else to pick up and enjoy.

Program Will Launch In Switzerland

Ikea has announced they have started their program in Switzerland.  At this time, there is no information regarding the cost or what items will be in the leasing plan.  If the leasing program is a success, Ikea will launch globally.

They will start by offering office furniture such as desks and chairs to companies.  They are also considering adding kitchen cabinets to the mix.  Kitchen cabinets are a good choice because they are perfectly designed so all you have to do is change out the doors for a new look.

The chief executive of Inter Ikea said this will give customers the option to return items instead of throwing them out.  Ikea will refurbish the items and then sell them, which will increase the life of the products.  There will be less consumer waste and give Ikea more money.

Ikea is extremely popular because of the affordability and design of their products.  Because they are so inexpensive, they are easy to dispose of but that’s not a good thing for landfills.  Ikea owns approximately 276 stores in 25 countries which could lead to concerns for the environment if customers just toss their items.

Instead, customers using their leasing plan, the products will stay out of landfills and be refurbished instead. This plan is also a great way for Ikea to increase new revenue while keeping customers coming back for more.  Last year was a rocky time for Ikea so this plan might be the perfect solution they are looking for.

In 2018, Ikea reduced its global workforce by 5% by laying off approximately 7,500 employees.  The company is planning on investing in smaller buildings with showroom-style urban stores.  This is a big change from the large, sprawling suburban stores.

Also, during 2018 the company’s profits dropped by 40% but Ikea said that was a planned approach in order to start overhauling their operations for future growth with their new business plan.