How one of the world's biggest furniture retailers is setting the a new "green" status quo for the retail industry.
In our new series "Corporate Sustainability Stories" we share sustainable mobility initiatives being taken by influential corporate players in their effort to contribute to a healthier, greener planet. Below, hear from Angela Hultberg as she shares her insights into why sustainable mobility is key to future-proofing business and embedding innovation.
Can you tell us a little about your role as "Head of Sustainable Mobility" at INGKA Group IKEA?
First, just to give you a little background on how our company is structured: I work at INGKA Group who acts as a franchisee for IKEA, so we have roughly 380 stores in 30 markets. My job as Head of Sustainable Mobility is basically to make sure that everything that moves within our company, moves in a sustainable way: from goods to co-workers to customers.
There are, of course, a lot of enablers to how things and people move, such as charging infrastructure, but it’s also about looking at the areas where we work where mobility becomes a huge factor, for instance e-commerce: you can’t have e-commerce without deliveries.
Why is fostering sustainable mobility - more than ever before - relevant to large, international companies today? And how does this apply specifically to IKEA?
From a business perspective, we need to acknowledge that mobility is a big part of business today. It’s about figuring out how we can be a company, having the offer and interactions we do within the limits of the planet.
For us at IKEA, we’ve realized that there’s nothing we do that doesn’t have an element of mobility to it: getting customers to the stores, getting goods to our customers, or being an attractive employer. That’s when we realized that we really needed to give mobility more attention, especially given the fact that mobility is our third biggest emitter in the entire value chain.
If we look at air pollution today in cities, things are not sustainable. It is not a healthy situation, and we don’t want to be a part of that problem. And of course, if we don’t engage in sustainable mobility, then we will be a part of the problem, because that's where we often are - in the cities. With home deliveries and e-commerce growing, this means that we will be sending more and more vehicles into city centers and this will inevitably contribute to air pollution, congestion, and noise pollution. We definitely don’t want to contribute to this which is why sustainable mobility is such a high priority for us.
In addition to preserving our company values, sustainability is important, because it is a real business risk. We are not the only ones seeing how the cities are getting polluted and congested. Local policymakers are keenly aware of the problem, too, so when they put in place fossil-fuel bans or limitations, that becomes a business risk for us. If we cannot reach our customer’s front doors or get our customers to our stores, then we don’t have a delivery offer; therefore, it’s a risk we need to mitigate and it’s about future-proofing our business.
There’s a lot of good things already out on the market today, so I think - and this applies to both internal and external - that finding the best option that’s already available and deploying it, then working to make it better is the most effective approach. You don’t have to invent new stuff all the time, you don’t have to wait for innovation to save you: innovation happened three years ago, and now is the time to deploy it.
One type of solution we are looking at internally is a pilot program for co-workers to commute together. Business travel is only a tiny part of our emissions, but 160,000 people going to work every day - that has some major impact on our planet! The questions we need to be asking in implementing such solutions are, how can
we enable co-workers to commute together? If we look at how people move, how can we support those mobility patterns? There are at least 20 other people living in my community working at IKEA because we wave at each other at our kids’ school and then we wave again at the company parking lot. In the end, we take all 5 different cars when we could’ve just all gone in one single car. Encouraging co-workers to commute together and find other mobility alternatives is good not only for the environment and congestion, but it’s also good for private financing.
Things are a bit different externally. If we had our own fleet and delivery services in-house, my job might be easier! But that’s not the case. We outsource all our home deliveries, so we have to work with our service providers, and we have to find models that work for them and that work for us. We’re a home furnishing company, yet we’re in a position now where we can help our suppliers and transport service providers in their transformation towards sustainable mobility. Local firms that we work with might not have the “financial muscles” to make the transformation on their own, so we have a role with the IKEA brand to go in and change the dialogue in order to find mutually beneficial solutions.
The IKEA culture is basically “test and fail” or “test and scale”. We’ll try ten different things: if it works, scale it up! If it doesn’t work, then we learn something, and we move on. This is how we do business in general, but it is just as important when it comes to areas of sustainability. Having this kind of mentality helps us to stay open to trying new ways of doing things, including integrating sustainable mobility into our everyday lives.
For us at IKEA it’s pretty straight-forward: we have had the same vision for more than 75 years now regarding sustainability. The IKEA vision is and has always been to create a better everyday life for the many people. And if you want to create a better everyday life for many people, then being able to breathe air that isn’t toxic, is a pretty basic need, right? So that alone, makes it worth our while to ensure that we are conducting business in the most sustainable way possible, because we want people to have a good life.
This, of course, impacts our business. If we can increase visitation by offering sustainable ways of getting to the store, that increases sales and that increases growth. And if - on top of that - we can secure a solid, sustainable home delivery offer and online sales, then of course that promotes growth, too.
But I think that more than anything, sustainable mobility is actually a precondition for growth. I think it simply needs to be there if we want to be in business. IKEA has a longstanding history of trying to be a more sustainable company and what we’ve come to learn in our experiences is that if we can do good for people and for the planet, then that is usually good for business as well.
In terms of image, we have a reputation to protect. We’ve spent billions of euros being a sustainable company and we don’t want that ruined by poor mobility choices like gas-guzzling trucks featuring the IKEA logo rolling around town. I would think that a year from now our customers would be very surprised if we pull up in their driveway or outside of their building in an old truck with fumes coming out of the back of it - in the same way I would be surprised if, today, someone sent me a package filled with plastic or Styrofoam.
That is THE strategy! We have a target of having 100% electric home deliveries by 2025. We announced that in 2018, so we’ve been at it now for two years now, and I’m happy to say that we’re reaching some major milestones. We’re also seeing some exponential growth, so I’m hoping it continues like that. But what we’ve learned so far is that the first vehicles are definitely the hardest, so our goal is getting that first electric truck rolling in the market and then we can scale from that.
To date we’ve deployed electric vehicles in 19 of our 30 markets, which is great. We even have a few cities where we decided to have 100% electric deliveries by 2020. One of them was Shanghai, and since it’s one of the biggest cities in the world plagued by pollution, it seemed like a good place to start. In fact, I’m happy to say that it’s been one of our biggest successes: it took us less than a year to grow 100% electric! This means that in China now, we’re not deploying or piloting...we’re scaling! Several other cities are now offering 100% electric services.
We also prioritized New York City and LA, and although it’s been a bit more challenging, we have a bunch of learnings that will serve us really well as we scale across North America. And then we have Amsterdam and Paris in Europe, both very different cities, so we tried two different concepts. They’re on track to be done this year, so we’re looking forward to seeing how things progress!
We’re seeing other markets doing amazing work, too. Spain is integrating cargo bikes into the logistics chain, we’re trying barge deliveries in Paris to reduce congestion, to go by water instead of road. We’re looking into new ways of moving goods. For instance, can we deliver to lockers that we can replenish at midnight via electric vehicles, so we don’t add to congestion? Can we find different ways of doing things and what should the offer look like to our customers? The bottom line is we’re not just changing the engines, we’re changing the entire business model.
Sometimes in this space we tend to overcomplicate things. We hear people talk about “artificial intelligence” and “Internet of Things” and it tends to just get so complicated. The bottom line is, what do people need? We need to breathe. We need people to get around. Let’s bring things down a notch and find the solutions there, in asking some of the most basic questions. We already changed humanity to fit technology in the mobility space once, and I’m not sure that’s what we need to do again.
As mentioned earlier, I really believe that we shouldn’t sit around and wait for innovation. It’s so important to utilize the innovation that is already there. We can co-create with partners, too, because if we sit around and wait for someone else to find the next big innovation, then we also lose the opportunity to get in there, collaborate with others, and find the “perfect” solution that fits our needs.