Ikea Partners with Returns Optimization Platform Optoro

Ikea aims to reduce the excess waste created in the reverse supply chain.

Need to Know

  • Ikea plans to improve its returns management and reverse logistics processes with its partnership with Optoro.
  • The test pilot is set to roll out in 10 IKEA distribution centers, 50 retail stores, and the Customer Support Center in the U.S. 
  • Historically, many returns end up in landfills creating a large carbon footprint for retail businesses. 
  • With the use of Optoro’s technology, Ikea plans to reduce its carbon emissions, streamline the returns flow and improve customer experience

Analysis

The recently announced partnership is the brand’s latest step in fulfilling its mission to build a circular business and improve customer experience. 

Optoro, who also has a strategic alliance with UPS, leverages data analytics and machine-learning algorithms to route returned and excess inventory to optimal locations within Ikea’s network. Retailers using Optoro’s return optimization platforms have able to divert over 99% of returned product that was destined for landfills, eliminating waste by up to 70%, as reported in a sustainability report by the logistics startup. 

 “Optoro’s solution will enable us to eliminate much of the waste created in the reverse supply chain, from minimizing the carbon emissions released in return shipping to finding the best next homes for returned items,” said Javier Quiñones, President & Chief Sustainability Officer of IKEA Retail U.S. 

According to the National Retail Federation, over $400 billion in goods are returned every year in the US. Optoro’s platform will help the retailer ensure returned items are placed in front of customers who are more likely to purchase them, reducing the brand’s environmental footprint and improving the lifespan of their products. 

“We are thrilled to partner with IKEA Retail, a global leader in designing a more sustainable retail future,” said Tobin Moore, CEO and co-founder of Optoro. “IKEA shares our mission of looking to innovation and technology to build the circular economy.”

Ikea recently announced a $220 million investment into its climate positive strategy, focusing on green energy and reducing the general impact of its flatpack furniture business. The Optoro partnership has the brand well on its way to delivering on that strategy.  As the program rolls out, Ikea plans on expanding the partnership into other markets.