Ikea is launching Netflix for furniture
Viral By Michelle Bronx |
According to a new report in the Financial Times, Ikea is starting a pilot plan to rent chairs and desks–possibly even whole kitchens–out to business owners in Switzerland. The initiative may begin as soon as this month, and it will serve as a trial to subscription furniture rentals on a broad, perhaps even international scale.
For now, the initiative will look less like your Netflix plan and more like a more typical car lease. People will be able to rent the furniture for a preset period of time. “When that leasing period is over, you hand it back and you might lease something else,” Torbjorn Loof, chief executive of Ikea’s holding company, Inter Ikea, told the Financial Times. Ikea would then refurbish the leased furniture to be resold. (Ikea already has a program that buys back and resells used furniture in the U.K.)
Subscription-based programs are on the rise across industries ranging from music to software to automobiles, since the model promises to create a steady revenue stream even in a world where many people want to buy and own fewer things. But Ikea is positioning the program less as a savior of its revenue model–though its profits were down 40% last year–and more as a play for green living. Ikea sees subscription chairs as a way the circular economy, which allows consumer goods to live second and third lives after they’re thrown away, could scale to furniture.
Given that by last count, Ikea was consuming an absurd 1% of the world’s lumber, it’s essential that the company is thinking about how its products can have second lives. But for the most part, leasing nearly anything is a worse deal than buying, because you will ultimately end up paying more for something that you never own. While surely much of the United States would be tempted to install a new Ikea kitchen for a low down payment, would they be comfortable with no longer owning their kitchens?
That’s why another initiative Loof teased to the Financial Times might be more appealing to our increasingly anemic wallets, and just as green: Ikea is considering a parts business that would allow customers to acquire out-of-production components and fix old Ikea products themselves.