How is the world's largest furniture retailer reducing its carbon output while increasing revenue? It may be in the Swedish meatballs. Or, more accurately, the plant-based hot dogs and vegetable balls.
Offering meat alternatives is just one way Ikea is at the forefront of sustainable and equitable business at a massive scale — you may also have heard about the furniture chain's EV charging stations, solar-covered parking lots, or plastic-free and zero-waste food halls. Now, Ikea will also buy back your old furniture and help save you money on your energy bill.
And while Ikea is often associated with go-to decor for dorm rooms and first apartments due to its affordability, "don't think because we've got low prices that we're throw-away-able." That's the word to take from Karen Pflug, chief sustainability officer at Ingka Group (Ikea's largest franchise retailer), who's on a mission to make "sustainability affordable and accessible."
In an exclusive conversation with The Cool Down, Pflug walks us through how Ikea's global emphasis on sustainable food, furniture, and even throw pillows — at the right price point — builds trust with shoppers and makes good business sense.
🏁 Second-hand as a first priority
"The big paradigm shift of many businesses, including ours, [is] moving from a linear business to a circular one," Pflug said. That includes:
Ikea's "As-is" marketplaces, which are online and in-store hubs for buying used Ikea products. "Originally that was where you went to get a bargain from a low price point of view … but increasingly customers that shop there are [there] because they want to make sure that they're getting products that are giving them a second life." Ikea will also buy back products like Billy bookcases and Kallax shelves, and customers can get an approximate price online before bringing in their items.
Ikea has also piloted a secondhand-only store in Sweden, which "is proving really successful as a standalone unit." In 2022, sales at the store more than doubled, and 43,000 products were given a second life instead of being scrapped. Given the success (and profitability), the pilot store has been extended to run until 2025.
And on a similar note, Ikea's spare parts program, for the dreaded day you move and lose track of all those tiny screws and dowels, will help you put the furniture back together instead of buying new. "You can get [those] sent to you for free or pick it up free in store," Pflug told TCD. "… Nearly 25 million spare parts [were] sent out last financial year."
"There's lots of things like that that we're trying to show the customer [that], for us, what gives us the best joy is that the products either stay with you for a long long time or get a second life."
📱 Sustainable living — there's an app for that
Ikea is also doubling down on its Sustainable Living Shops, which are essentially stores-within-Ikeas (as well as online) that help "customers to focus on reducing their own waste at home, whether it's saving food, waste-sorting, all those kind of things," Pflug said. The company also has online guides for sustainable living — with ideas on saving water, maintaining furniture, and more.
Pflug told us that eventually "the whole store should be a sustainable living shop."
Another way to get there? A smart home app you can use to monitor electricity usage in your home.
"It's being tested in Sweden now to look at your energy use on a daily basis." And there's an accompanying plug you can use to check specific appliances, so "you can see what energy it's consuming," said Pflug.
The app is another way Ikea is answering the "what's in it for me?" question consumers may ask when thinking about buying sustainable products. Pflug explains it's about "showing it's a benefit for health, for … less pollution, and very importantly … [it's about] saving money as well." For the smart home app in particular, "I think that's the future for a lot of customers because … knowledge is power. If you can see what you're doing, you can then change your behavior to improve it."
🐢 Think of it as "slow furniture"
Fast fashion's younger sibling, fast furniture, bumped U.S. furniture sales up by $4 billion from 2019 to 2021 with its allure of cheap, trendy products — but with major environmental consequences, too.
To pull Ikea out of the fast fashion camp, Pflug mentioned she's been "myth busting" the concept that "you get what you pay for." Affordable doesn't have to mean unsustainable.
"I would say actually we're into slow furniture — a bit like the slow food movement. Everything is created with a very conscious design mindset, and we start from scratch with the choice of the raw materials." Ikea says it is also transitioning these materials "to be renewable and recyclable as well, which we're now on … 56% renewable and 17% recycled."
"We realize it's a myth to bust, but the last thing we want is people feeling that our furniture is disposable."
🥑 How good food is a game-changer
"I'm super passionate about food because … one of the biggest ways an individual person can make an impact on climate is to reduce their red meat consumption," Pflug said. Ikea's strategy is "very much about helping shift that behavior" toward plant-based alternatives. In fact, the company just opened its first plant-forward food hall in San Francisco.
It may come as a surprise, but Ikea is one of the largest restaurant chains in the world — "nearly 700 million people eat in our restaurants or bistros each year," according to Pflug — which means "we have a huge impact on the food agenda." And while Ikea's meatballs put it on the foodie map, its goal is that by next year, "we'll have 50% plant-based meals in all our restaurants around the world," Pflug noted. Right now, Pflug said the company sits around 40%.
The key is making sure plant-based options "are a lower price than the meat-based alternative to really try and seize the moment."
Ikea is also using AI to continue reducing food waste. Two years ago, "we were the first large international company to half our operational food waste in our restaurants," Pflug said, and in order to stay on top of that, Ikea has "invest[ed] in AI technology with a small startup … to really help educate and train our coworkers about what food was getting thrown away."
🎭 Understanding your customers on an emotional level
In addition to its annual Life at Home report, IKEA runs a global people and planet report as well to get "under the skin of what [consumers] care about from a sustainability … point of view," Pflug said.
Two big things stick out to her.
1️⃣ Closing the worry-to-action gap: "Two-thirds of our customers care deeply and are worried about [climate change and inequality, but many] don't know what to do or they don't feel they can act. One of the biggest barriers is cost."
"So we see this real demand, but we do still feel that there's a gap — and for us that is a commercial opportunity because we aim to be accessible and affordable. … It's our job to show them that they can have a sustainable lifestyle at an affordable price. … We believe that good design shouldn't just be for the wealthy people."
"It's critical that people feel empowered, [that] they feel optimistic," Pflug said. "They know the solutions are out there and that … we're all trying to move this agenda together. That sense of feeling part of that collaborative spirit is so important."
2️⃣ Cultivating trust: "We also know that [sustainability is] one of the biggest drivers of brand trust for us," Pflug said. "We [have] really good sustainable products, we operate sustainably, and we treat people well."
In fact, as an 80-year-old company, Ikea's emphasis on cost-consciousness and sustainability has "been ingrained in our DNA right from the start" — it's just that "at that point it was about saving money because 80 years ago it wasn't really on the radar to be more sustainable," Pflug said.
"But when you have flat-pack furniture or when you have an attitude toward being cost-conscious and reducing waste, it inevitably means that you're being more sustainable as well."
Anna Robertson conducted this interview for The Cool Down.
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