Ikea partners with tech company to reduce return waste

CONSHOHOKEN, Pa. – Swedish furniture retailer Ikea has partnered with tech company Optoro to reduce waste from returns in the U.S.

“We’re on a mission to become a circular business by 2030, and we need partners like Optoro who can help us achieve our goals,” said Javier Quiñones, Ikea Retail U.S. president and chief sustainability officer. “Optoro’s solution will enable us to eliminate much of the waste created in the reverse supply chain.”

Using proprietary technology and data science, Optoro said its returns optimization platform efficiently routes all returned goods to the best channel, reducing financial, operational and environmental waste, as well as improving the customer experience.

Quiñones said returns create costly financial and environmental problems, and with the growth of e-commerce, the volume of returned inventory is continuing to rise. According to the National Retail Federation, more than $400 billion in goods are returned every year. Historically, many returns end up in landfills and the transportation of these goods contributes to retail’s carbon footprint.

Optoro’s solution leverages data analytics and machine learning to help retailers efficiently manage and resell returned inventory. Ikea will implement the new technology in 10 distribution centers, 50 retail stores, and the customer support center in the U.S. The company is also exploring the potential to expand the partnership into other markets.

Ingka Group, the owner of Ikea Retail U.S., also recently participated in Optoro’s latest funding round through its investment arm, Ingka Investments. Quiñones said this is the latest in a series of investments in U.S.-based businesses that share Ikea’s values.

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