Delivery vehicles, responding to the immediate beck and call of consumers, are already a major reason for clogged streets. But it is predicted that in the world’s largest 100 cities they will increase by 36 percent by 2030, with a resultant increase in emissions of 32 percent and congestion of 21 percent.
Ikea’s online sales increased by 50 percent last year. The company needed to ask, “do we want to be part of the problem or do we want to be part of the solution”, says Angela Hultberg, head of sustainable mobility at Ikea parent, Ingka Group. But this question is wider than just deliveries, she explains. It encompasses how the company sources and operates, and other aspects, such as consideration for how its 166,000 workers travel to work each day.
The company has set some ambitious targets:
- By the end of this year, there will be charging options for all customers and workers at all touchpoints.
- By 2025, it will have moved to 100 percent electric vehicles or other zero emissions vehicles for all customer deliveries.
- In the same timeframe, all of its owned, leased or shared vehicles will be EV or zero emissions.
- And – potentially the most ambitious of all, says Hultberg – by 2030, it intends to have halved emissions from workers and customers accessing its physical touchpoints.
That latter target will have implications for where Ikea locates its stores. The number one reason a person is not an Ikea customer is accessibility, says Hultberg – they just don’t have a store that is close enough. The shift is likely to mean smaller stores in urban centres, so moving away from its traditional model of large stores on the fringes. This would encourage customers to reach them via transit, walking, or cycling.
The firm will also need to look at whether there is a need to deliver to customers’ homes or whether there are smarter ways of doing things. And it will consider how to persuade workers to travel together. Hultberg points out that 20 percent of the Ikea workforce is younger than 24 and they tend not to own cars.
To put all of this into context, Ikea has 420+ stores in more than 50 markets; in India alone, having opened its first store in 2018, it plans 25 by 2025.
It has made considerable strides. In China, it has 100 percent electric home delivery in Shanghai, Guangzhou and four other cities. It has EVs deployed in 19 markets, with others in the pipeline. And it has chargers at 80+ stores and workplaces. It has sought full transformations in an initial five cities – New York, Los Angeles, Shanghai, Paris and Amsterdam.
One lesson from the work to date, says Hultberg, is that there is “no perfect solution, you need to find the best available one on the market and then make it better”. So waiting for technology is not the way to get things done. “We can’t sit and wait for innovation to save us.” If the cost is high or something is just hard, that doesn’t mean you don’t do it, she says. Ikea’s large investment in renewable energy is an example.
Second, there is a need for collaboration, including new types of partnerships. In Shanghai, it partnered with an EV sharing platform provider and this cut months from the project, she says. Ikea transformed Shanghai to fully electric in six months. It worked with its local warehouse and delivery company, Beiye New Brother Logistics Co, which purchased a number of electric delivery trucks, and DST, a Shenzen-based company that leases electric trucks and vans, supported by its own large charging network.
The message to third-parties is: “Either you go on the journey with us or we can’t be partners”. For deliveries, as the company does not have its own fleet, that means working with its partners here.
In cities that do not have a robust EV-sharing network, Ikea is working directly with transport manufacturers to source zero-emission options. It is also evaluating smaller deliveries by electric cargo bicycles or utility tricycles.
Clearly, transport is only one component of Ikea’s environmental footprint, with other initiatives around much of the rest of its business, including sourcing materials and waste. Overall, its sustainability strategy it to reduce the carbon footprint of all products by 70 percent by 2030.