Two years ago, IKEA Retail Sweden opened the world’s first IKEA secondhand store as a test in Retuna Recycling mall in Eskilstuna. After two years full of valuable learnings about the secondhand business and how to prolong the life of IKEA products, IKEA has also managed to make the store and the business profitable. As a next step, IKEA Retail Sweden are now extending the store until August 2025, and simultaneously transferring the learnings from IKEA secondhand store into all the 21 Swedish IKEA stores.
The two years have given valuable insights about how to give IKEA products a second life in the best possible way. As a result of those learnings, collaboration, and hard work, IKEA has managed to reach a profitable circular business model – that works small scale in Retuna.
During FY22*, sales more than doubled in the secondhand store, by giving about 43 000 products a second life instead of going for waste. Thanks to that, the IKEA secondhand store in Retuna was able to reach profitability last year.
“Based on the insights during those two years, we are now taking the next step by keeping the store until August 2025. At the same time, we are transferring the learnings into our 21 IKEA stores in Sweden. This way, we will be able to offer more of our customers in Sweden our secondhand products. Key to that success is always the competence and passion of our co-workers and partners in combination with the Swedes willingness to donate for reuse instead of sorting as waste”, says Reza Shomali Country Business Development & Transformation Manager in IKEA Retail Sweden.
“With that said, the reasons behind the success are, a perfect venue with a flow of products and low transportation costs, a collaboration with the right partners, a steadily improved operational efficiency, a widened range, and an ability to really meet the customer’s needs. Thanks to the secondhand test in Eskilstuna, we have developed our skills in seeing value where you do not always see it, like in waste, or in cleaning and repairing used products,” he says.
IKEA is committed to become a circular business by 2030 and by testing, adopting, and scaling up new circular solutions, Ingka Group is exploring ways to prolong the life of products and helping people give products they no longer need a second life.
During FY22 Ingka Group continued to explore how to be more circular by testing a range of solutions, including repurposing our As-Is areas into circular hubs in 306 stores, enabling customers to buy secondhand and nearly new furniture. 32.5 million products sold in our As-Is areas helped customers embrace circularity with 1.8 million using our spare parts service to repair and extend the life of their IKEA products.
Some of the learnings and reasons behind ReTuna’s success include:
– The perfect location:
Thanks to nearby sourcing, with a steady flow of donated or reuse instead of being sorted as waste, in combination with products from IKEA Västerås and our partners, we have secured the necessary volumes – at a low transport cost.
– Collaboration with partners:
The collaboration with social partners and charity organizations resulted in a win-win for the store and partners, as well as for the people working there.
– Improved operational efficiency:
We have steadily lowered the time we spend on handling each item. As a result, we have increased the number of items cleaned and repaired from 300 to 700 a week.
– A wider range:
New knowledge about repairing and cleaning a wider range of products have increased the inflow of items, offer customers more and thereby helped us to increase our sales.
– Understanding of customer needs:
We have improved our ability to meet the customer needs, which are different compared to linear sales customers. Not least the Here today, gone tomorrow attitude, makes the customers return more regularly.
– Security, service, and quality:
Thanks to our retail experience, we have been able to offer better security, service, and quality in our secondhand offer; cleaned repaired and quality assured products with home delivery.
- Provided 16,000 customers with a more affordable and sustainable offer.
- Almost 4 out of 5 products were sourced from private donation for reuse instead of sorting as waste.
- Almost a thousand products came through take back service from IKEA business customers.
- Extended the eligible range through innovation, adding 15% to the sales.
- Avoided up to 90 percent of CO2e emissions compared to buying new.
- Saved about 151 tonnes from being thrown away as waste.
Related article: https://www.ingka.com/news/the-worlds-first-second-hand-ikea-store-is-now-open/
*The financial year 2022 (referred to as FY22) of Ingka Group (Ingka Holding B.V. and its controlled entities) refers to the period between 1 September 2021 and 31 August 2022.
About Ingka Group
With IKEA retail operations on 31 markets, Ingka Group is the largest IKEA retailer and represents about 90% of IKEA retail sales. It is a strategic partner to develop and innovate the IKEA business and help define common IKEA strategies. Ingka Group owns and operates IKEA sales channels under franchise agreements with Inter IKEA Systems B.V. It has three business areas: IKEA Retail, Ingka Investments and Ingka Centres. Read more on Ingka.com.