Ikea Proves That Being Big Doesn’t Mean Being Bad

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Ikea exec Steve Howard recently turned heads at a UK conference, when he announced that we’ve hit “peak stuff”.

“If we look on a global basis, in the west we have probably hit peak stuff. We talk about peak oil. I’d say we’ve hit peak red meat, peak sugar, peak stuff … peak home furnishings,” writes Sean Farrell for the Guardian, quoting Howard’s talk at a Guardian Sustainable Business debate.

It may seem like a risky announcement for an executive at such a large company to make. After all, isn’t the point of most big-box retailers to convince us that we always need more?

And with some aggressive expansions planned (Ikea expects to double its sales by 2020), Howard’s statement is, on the surface, counterintuitive.

For more information on home furnishings, view Technavio’s full report library.

But of course, there’s more to the “peak stuff’” comment than meets the eye. It was a jumping-off point for Howard, Ikea’s head of sustainability, to discuss some of the company’s environmental practices, which he says are aiming to help businesses and consumers rethink consumption.

How can the maker of disposable furniture also be a paragon of sustainability?

Ikea products come with a shelf life, and customers easily accept the disposable nature of the furniture in return for the smaller price tag.

But the fast fashion approach to furniture doesn’t seem to mesh with an environmental agenda. Doesn’t lower quality ultimately mean more furniture in landfills, and more consumption in the long run?

Not necessarily, and Ikea’s billions of dollars in revenue makes it possible for the company to make (and keep) environmental commitments.

In 2014, Ikea had 315 stores in 27 countries, and reported €28.7 billion in sales, according to their 2014 sustainability report. That’s about USD $31.96 billion at current exchange rates.  

And according to Inhabitat, a weblog that examines the future of architecture and home design for a sustainable future, the company is definitely using this revenue for good.

One Inhabitat posting indicates that, in 2009:

  • Ikea was investing $77 million in clean tech startups
  • 71% of all Ikea products were recyclable, made from recycled materials or both
  • Ikea stores recycle 84% of waste generated in-store
  • Ikea’s global operations mirror the strictest emissions rules worldwide

These numbers might be a bit out of date, but assumingly the company’s commitments haven’t changed.

And according to a new report from Technavio, this kind of focus to sustainability might be the best way for a company like Ikea to keep their customer base going forward. When it comes to furniture and home appliances, more customers in the western world are starting to take sustainability—both at the corporate level of an organization and in terms of individual products—very seriously.

And despite Howard’s “peak stuff” statement, consumerism is a powerful beast—the home furniture market in the US alone is still expected to grow from $29.51 billion in 2015 to 39.13 billion in 2020.

There’s a lot of potential space for growth here, and in a shifting consumer environment, Ikea is already way ahead of the game.