At the end of last year, IKEA announced that it was launching a buyback program for its products. Customers could sell back gently used furniture, which would then be displayed for resale. The initial pilot program included more than two dozen countries, though the United States was left off the list.
But there's good news if you like Swedish meatballs and DIY furniture assembly: The program is now launching in the U.S. IKEA is piloting the buyback and resell program at its Conshohocken, Pennsylvania, store through September 21, allowing Philly-area folks to call first dibs on making deals for their secondhand furniture. The program will be rolled out in other stores throughout the country in the upcoming months.
Here's how the program works: IKEA customers can fill out an online form to see if their items are eligible for buyback and get a quote. (More than a dozen items, including dressers and upholstered furniture, are ineligible for resale at this time). Furniture that looks like new (no scratches or other damage) will score you up to 50% back, though even furniture that's been well used could nab you 30% back.
This could be a boon for owners of vacation rentals looking to refresh their furnishings or for house flippers who may want to cash in their old IKEA furniture for new appliances.
Good for the environment, even better for business
IKEA cites its focus on sustainability as the catalyst for the program. The website says: "We are committed to becoming climate positive by 2030 by reducing more greenhouse gas emissions than the IKEA value chain emits, while still growing the IKEA business."
Sustainability is a noble cause, but IKEA hasn't forgotten its own bottom line. Customers who sell back their used furniture won't be getting a wad of cash: IKEA will instead issue store gift cards so they can shop and refill their spaces with more IKEA products.
But there seems to be an even savvier strategy at play here. Younger customers, particularly Generation Z, are boosting demand for more sustainable products, not to mention ones that offer good value. Gen Z is typically defined as those born between 1997 and 2012, which means some of the older Gen Zers might have memories of family struggles during the economic crisis of 2008. So while they might like to shop, they also like to scope out bargains wherever they can. They certainly have shown their affinity for shopping in thrift stores and online secondhand clothing marketplaces like ThredUp (NASDAQ: TDUP). Of course, buying a dining room table is different from shopping for a pair of shoes. It's clear that IKEA is hoping to get a share of the secondhand market by catering to a new generation of shoppers.
The Millionacres bottom line
IKEA's mission for sustainability is a good thing, but it should come as no surprise that it's also going to sustain its own bottom line. By tapping into a generation of shoppers that is both environmentally conscious and likes a good bargain, IKEA could be looking at a win-win scenario. And that's great news for real estate investors.