When a business has a big name with a lot of customers, it has the ability to influence them to do good things for the environment. 

Let’s take IKEA for example. In 2023, almost 860 million people visited the stores, generating over $50 billion in sales. 

With this exposure, the furniture retailer has pledged to an ambitious net zero target. The giant aims to slash the  climate impact of products used by customers at home by 70% before 2030.

Per IKEA’s 2023 sustainability report the retailer has achieved a 52% reduction from its 2016 baseline. The calculation is based on the materials used and the energy efficiency of appliances, lighting, and furniture sold by the retailer.

In 2023 alone, it sold over 58.1 billion LED light bulbs, improving their efficiency by 6% compared to previous models. This switch not only cuts down on customer energy consumption but also reduces emissions.

IKEA’s shift towards LED bulbs shows how it can guide consumers towards choices that lower their personal carbon footprint, which also aligns with its own climate commitments.

 

 

Karen Pflug, Chief Sustainability Officer of Ingka Group, outlines several strategies that drive these efforts. 

Leading strategy for nearly 400 stores, which hosted 697 million visits in 2023, Pflug underscores IKEA’s influential role in procurement

Pflug explained that the brand leveraged its purchasing power to promote lower-emission products without raising costs. 

“By having the size and volumes and guaranteed revenue for suppliers, that helps us change the production line,” Pflug said.

The retailer didn’t invent LED lighting, but because it ensured certain volume levels, it changed priorities for suppliers. So, it employs similar strategies across other product categories.

Price, price, price

Pflug emphasized the consumer demand for climate action, noting that 68% of people are concerned about climate change, yet many perceive sustainable choices as too expensive.

“So the biggest delight I have is showing that sustainability can be affordable, as well, and really making them understand their personal agency, that small things can make a difference,” Pflug said.

Through initiatives like these, IKEA transforms its product offerings and at the same time, empowers consumers to make sustainable choices economically.

One thing that’s evident from its efforts is encouraging the transition to plant-based foods. As we know, IKEA offers plant-based alternatives for its well-known meatballs and hotdogs. However, the retailer prices them lower than animal-sourced options.

Last year, there were over 700 million customers who visited IKEA’s cafes or food markets. So, the company can make a difference however big or small.

IKEA aims to make 50% of its “main meals” plant-based by 2025, currently achieving about 38%.

In places like Japan and South Korea, countries where people are traditionally meat eaters, IKEA shares statistics for employees to see adoption, by region, which encourages a spirit of competition.

Furthermore, stores emphasize local cuisine whenever possible. For example, it serves plant-based meatballs with pasta in Italy, and it pairs them with kimchi rice in South Korea.

Pflug said, “It’s not about making people feel guilty, but making it desirable, tasty and appealing.”

A section for affordable, sustainable products

Placing affordable, sustainable products in special sections throughout the store is what the retailer also does. 

IKEA stores typically put a special section on “sustainable living” products that visitors must pass through to reach in-store cafes.

Pflug explained, “We really highlight what individual customers can do to change their lives today that won’t cost them extra money and could actually save them money over time.”

In this area, there are also educational displays on climate change data, energy efficiency tips, water conservation advice, and product environmental impacts.

Items in this area include: 

• Home solar services, including panels, installation, and, in certain markets like California, battery storage or electric vehicle chargers.
• Heat pumps (starting in Sweden) to reduce heating/cooling costs and dependence on imported oil/gas.
• Portable solar-powered LED lamps.
• Water consumption meters and a shower head mist nozzle reducing bathroom water use by up to 95%.
• Upcoming: Ikea designers are developing a system to recycle shower water.

Moreover, the showcased products are available throughout the store alongside alternatives. 

Pflug said, “They are actually everywhere, so you get a double hit. We have seen a higher index of sales when we prioritize those products in the sustainable living section.

“It doesn’t matter to us where they pick it up from as long as they get to take it home and get the benefits from it.”

Promoting refurbishment, reuse, and repair

What’s also commendable from IKEA is that it encourages store managers to explore ways to prolong the lifespan of products in customers’ homes. It also facilitates easier repair, reuse, or passing on to others.

Last year, Ikea reported a 9% reduction in the climate footprint of its products during the “end of life” phase compared to 2022. 

The retailer achieved this improvement through initiatives such as expanding consumer repair options, enhancing trade-in policies, and rethinking product design priorities.

For example, IKEA has increased availability of spare parts, like furniture pegs and sofa covers for refreshing older couches. The company dispatched over 24 million replacement items in 2023.

In addition, it has expanded a successful buyback program for “old but good” items initiated in 2021. And, it has used more bio-based glue to facilitate easier disassembly and material recovery from returned furniture.

Encouraging communication

While Pflug’s team leads the strategy for Ingka Group, every local country manager is expected to do what’s right for their market. So, they all carry the chief sustainability officer title. Pflug reports to the chief financial officer of Ingka Group.

“That’s a deliberate choice, because I think we need finance to be your best friend when you’re looking at what needs to happen [to make] transformational business change with sustainability,” Pflug said.

Additionally, new ideas come from an independent, external advisory forum established three years ago. The forum comprises youth activists and professionals from diverse backgrounds, many under 25 years old–an age group with great concerns about environmental impacts of consumption habits.

Selected by an external agency, these individuals regularly meet with Ikea’s top management and board. 

Last year, they presented their aspirations, visions, and concerns to over 300 senior Ikea leaders during a leadership training session.

IKEA has set an example of how giant businesses can in fact convince and encourage their consumers to change their lifestyles and align with their sustainability goals. 

But, it’s not just convincing and encouraging. I like that IKEA is also actively trying to make it work for their consumers, as opposed to just telling them what to do and not caring about the financial situation of their consumers.

It also shows that it’s possible that businesses don’t just dump the climate responsibility onto their consumers’ shoulders, and I appreciate IKEA for it.

But what do you think of this?

 

Source

https://www.greenbiz.com/article/ikea-guiding-its-customers-toward-sustainable-consumption-heres-how