Ikea to trial leasing out furniture under its latest business strategy
Category: #retail  By Pankaj Singh  Date: 2019-02-05
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Ikea to trial leasing out furniture under its latest business strategy
  • The company’s furniture leasing trial is set to start in Switzerland by the end of the month.
     
  • The move is a significant deviation from the company’s conventional business model.

IKEA, the renowned Swedish multinational furniture retail firm, has reportedly announced that it would be exploring a new business model under which it would be leasing out its furniture products to customers.

Reports cite, the company’s furniture leasing trial is set to start in Switzerland by the end of the month. The company believes the move, a significant deviation from its conventional business model, could lead to new ways through which customers would be able to own Ikea products.

According to a report by the Daily Mail Online, while the company’s trial would initially involve Ikea office furniture offerings for different businesses, Ikea expects to further expand into the vertical of kitchens as well as the consumer market. The decision to diversify its business model by exploring alternatives comes after company profits fell by as much as 12% last year.

The CEO of Inter Ikea, Torbjorn Loof stated that Ikea would work along with partners so customers could actually lease Ikea furniture. Once the leasing period ends, customers can hand the furniture back to the company and lease out something else. Loof further stated instead of throwing away the returned furniture, the company would be refurbishing the furniture and further rent it or sell it, thereby prolonging the products’ lifecycle. The trial would be the first in a series of tests that the firm hopes to evolve into a scalable subscription service.

The retailer has reportedly also opened a number of small stores across city centers, designed pop-up shops for specific rooms such as bedrooms & kitchens and have improved many of the other services offered by the company such as home delivery & online sales.

According to reports, the expansion of the company’s new business model depends upon the success of the furniture leasing trials that are set to begin soon.



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Pankaj Singh

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Pankaj Singh

Pankaj Singh Develops content for Market Size Forecasters, Algosonline, and a couple of other platforms. A Post Graduate in Management by qualification, he worked as an underwriter in the UK insurance domain before deciding to switch his field of profession. With exp...

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