Prerequisites for a circular furniture industry : a case study of a Nordic furniture company

The furniture industry is an integral part of the European economy and is now facing economic, environmental, and regulatory challenges. Within the European Union (EU), a large amount of furniture every year goes to incineration or landfill, with only 10% being recycled. One of the causes is the increased supply of low-quality furniture that is put on the market, causing increased consumption levels, resulting in an increasing amount of waste. Additionally, most of the climate impact occurs within the extraction of raw materials. From an environmental perspective, vast opportunities present themselves. Simultaneously, new stricter legislation demands decreased use of resources and climate impact, and the introduction of new circular economy guidelines forces companies to act. By adopting a circular approach in the organisation, companies can improve their resource usage and climate impact. However, the adoption itself demands new types of business models, which is a challenge for the corporates in the furniture industry to realize. The furniture industry can be split into two sections, business to business (B2B) and business to consumer (B2C), where the first one has reached a bit further than the latter, regarding circularity. This can be explained, among other things, by knowledge gaps between the two sections and that Product-Service System (PSS) is more established for B2B. PSS integrates products and services to fulfil the customer’s needs, which is seen as an enabler for circular economy. The aim of this thesis is to explore the furniture industry within B2C in Sweden by identifying which circular business practices are offered today, as well as exploring the challenges and opportunities for furniture companies to implement more circular business practices. In addition, it examines which prerequisites are central to a more circular furniture industry. To achieve the purpose of this thesis, a qualitative approach has been used through a case study at a large Swedish B2C furniture company. Data has been collected through a literature study and an interview study where a total of 14 respondents have been interviewed. The interviewees consisted of both internal respondents at the case company as well as external parties consisting of experts and suppliers. In addition, a mapping consisting of a website study has been conducted to identify the current circular business practices that B2C furniture companies offer in Sweden today. The result indicates that linear business models are currently dominating in the furniture industry and that there is an extensive demand for low-priced furniture, which often lacks quality. Regarding circular business practices, there is a limited amount that is being offered on the market. Out of 40 companies considered, four offered two circular business practices, 18 companies offered one circular business practice and 18 companies offered none. The offers included furniture care guides, reconditioning services, furniture leasing, recycling guides and second-hand sales. The most central obstacles a circular furniture industry faces are the price aspect and the consumer attitude, where circular initiatives in many cases can be more expensive compared to buying new products. Cheap furniture has worse prerequisites for circularity due to the inadequate design and lack of spare parts. In addition, the hygiene aspect and logistical issues were found to be central barriers as well. On the other hand, one major opportunity for circular business practices is changes in consumer attitudes, which is changing with the coming generation due to an increasing interest in sustainability. Furthermore, there are upcoming directives and legal requirements as well as benefits consisting of increased profitability for companies in an early transition to a more circular business. The most essential prerequisites to enable a more circular furniture industry is enabling cooperation between actors and joint efforts to change current trends. It is thus clear that a change in the furniture industry is required, which requires actors to dare to change towards a more circular business