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Is IKEA’s New Business Model On-Brand? (Importance of Brand esSense #14)

I was interested to read about IKEA testing a completely new business model. It could potentially completely disrupt their business and demonstrates a very forward-thinking company. 

They are expanding an ongoing test that allows consumers to rent furniture through subscription-based leasing options. This is partly driven by the desire to encourage reuse of products as much as possible before they are recycled. It also reflects global shifts in behaviour and increasing use of rental over buying products.

Other companies such as Netflix have successfully pivoted their business models, while others such as Kodak and Blockbuster have missed the opportunity.

Happily, the new business model is consistent with IKEA’s long-term brand personality and positioning, whether by accident or design. As I wrote in Brand esSense, “[IKEA’s] core principle of giving everyone, whatever their status, access to affordable, well-designed furniture and home accessories”. 

A subscription-based model is completely consistent with these values. It’s a brave business move for a $ 44 billion business with over 200,000 employees but might just be what the furniture market needs.

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