How IKEA innovates in sustainability and customer experience

Episode transcript, edited for clarity

[00:00:46] Bill Thorne: Welcome to Retail Gets Real, where we hear from retail’s most fascinating leaders about the industry that impacts everyone, everywhere, every day. I'm Bill Thorne from the National Retail Federation, and on today's episode, we're talking to IKEA U.S. CEO and Chief Sustainability Officer Javier Quiñones. We're going to talk to Javier about his career journey, what he loves most about his job and how he stays current in the ever-changing retail industry. Javi, welcome to Retail Gets Real.

[00:01:18] Javier Quiñones: Thank you very much, Bill. It's a pleasure to be here with you today.

[00:01:22] Bill Thorne: Well, I'll start with congratulations on being named to the NRF Foundation's List of People Shaping Retail's Future. I'm always impressed with the people that we are honored to honor every January in New York around the Big Show.

And if you look at your background, your experience, and what you've done, I can't think of why they wouldn't honor you. So tell us a little bit about your career journey. Where were you, and how did you get to where you are?

[00:01:49] Javier Quiñones: Well, thank you, Bill. And thanks. I'm extremely honored and grateful about the recognition. Now, actually, these days, I'm celebrating my 25th anniversary in IKEA. So I don't need to say that I was maybe 13, 14 years old when I started. No.

[00:02:08] Bill Thorne: That's what I thought. It’s the first thing that came to my mind. 

[02:12:28] Javier Quiñones: No, a bit more than that. But anyway, I was in university. I joined IKEA, working Fridays, four hours, Saturdays, eight hours, Christmas campaign. It was mainly to help during a busy period in the store. Never expected to have a career in IKEA or retail. I wanted to be an architect, and that's what I was studying.

And here I am 25 years later, and of course, with many roles in between. But I started part time. I did many roles, full time, shopkeeper, some of the leadership roles, more or less all of them in the store, I would say. And then I have the privilege to travel around Spain and work in different places in the stores mainly, like Barcelona, where I'm originally from, Madrid, Bilbao in the north, go back to Barcelona.

In 2014, I left Spain for the first time, and at that time, I was a store manager in one of the stores in my city. And I thought, this is it. I have all my friends around. I had a good job. I was extremely happy. And I have to say, I love the stores. I love customers. I love people. I love the range. So I had it all. And I actually thought I found my career, and this is what [Inaudible] to be.

[00:03:27] Bill Thorne: And I've reached the pinnacle.

[00:03:30] Javier Quiñones: Exactly. But then I had a super opportunity to move to the UK. I was deputy to the CEO there for a couple of years. And then I got the role of the CEO for UK and Ireland. And I was living in London for five years together with my family. In 2019, I had the opportunity to come to the U.S. right before COVID.

[00:03:53] Bill Thorne: I'm going to say perfect timing.

[00:03:55] Javier Quiñones: Perfect timing. And it's been more than five years. I cannot believe all these 25 years, and how grateful and how good they have been in many ways.

[00:04:06] Bill Thorne: It's amazing to me. You said that you started out, you thought you were going to be an architect. How many leaders that we talked to on the podcast or meet during our meetings and things of that sort that started out thinking, this is where I was going to go. Never ever really thinking that they would end up in retail. And yet they found something. They found a passion for it, and then they really, really succeeded as a result of it.

And I think that's a great story to tell. And the store manager. Your stores aren't just stores. They're like little cities. So I can only imagine being a store manager in an IKEA is like running a small town as opposed to just being a store manager. But I think that what you all do and what we're doing as an industry, with a lot of focus on sustainability, I know that you got some great programs that you do through IKEA to address that issue.

Tell us, where did that interest in sustainability for you start, and what is IKEA doing?

[00:05:08] Javier Quiñones: As I said, I joined 25 years ago. I still remember one of the first trainings I had to lead as a mandatory training was sustainability. We're talking 1999, Spain. North of Europe was a little bit ahead on the sustainability conversation, but it was not what it is today, for sure. Right?

[00:05:27] Bill Thorne: Right.

[00:05:28] Javier Quiñones: So that was part of the training program. It was the very first time when someone put me in a room to talk about recycling, how important it was and why. Since in the very beginning, and these are things that I reflect when I look back, I've never seen an IKEA plastic one used bag in my entire career.

I've never seen that. During many years, we have seen others claiming, we don't have plastic bags. We have now other type of material for our bags and so on. I've never seen it, and I've been in the company for 25 years. Still remember in what we call the ASIS, today, Circular Hub, because it is evolving.

But our founder was very clear. Nothing goes to waste. And we have this little corner in the store where you can buy products that I've used, they have been shown in the showroom, or other types of uses. And this has been with us. Then of course, this has evolved because the last 10 years, probably a bit more, we know what's happening in the planet.

We cannot deny what's going on anymore. It is obvious. It is clear. It's been also part of our DNA. But it's also the way we do things. We always liked in the past to do versus tell. This has been a lot on who we are. And to be honest, we decided some years ago, probably six, seven years ago, that we need to tell the story.

We need to share what we do because I think that we need to demystify a little bit that sustainability always goes with a premium, that it costs money, and that it doesn't have, in some ways returns, that are good to the business. And for us, this is totally the opposite.

Today, in the U.S., we already produce more energy than the one that we consume. We own around 215,000 solar panels, I always say. I love the stores' insight, because they are amazing places of inspiration. But when you look at the roof, it looks beautiful because it's all capturing energy.

We have invested in solar farms. We own two wind farms in Illinois and Texas. We are investing in forestry. So all this is part of what we have done. It's part of our good business, I would say. We say, in IKEA, it's good business to be a good business because it helps our returns in many good ways.

[00:08:05] Bill Thorne: So 1999, that is way, way ahead of most retailers. I know that there are some of the big retailers that started to talk about it, probably in the mid-two teens. So 1999 is way ahead of just about everybody else. So do you feel like IKEA has led the industry? Because you said that they don't like to talk about what they do. They just want to do what needs to be done. And so some of the practices that you all started that many years ago, I would think it's an early adoption because people aren't having to reinvent the wheel. Did you see a pickup on that, or did it take a lot more time?

[00:08:50] Javier Quiñones: No, I think many more companies are picking up. I'm not saying we are perfect, and I like to say and to see that we are not perfect because that means we have a lot to do. The reality is there's a lot to do, especially on climate and sustainability. It's good to see many more companies.

It's good to see many more movement in these areas. It's good to see that the public sector and the private sector is coming together in a better way. But there is still absolutely a lot to do. We have the privilege to enter in many people's homes.

[00:09:28] Bill Thorne: Right.

[00:09:28] Javier Quiñones: Just to give you an example, LED bulb, when we started with the technology, I think it was 2016 actually. You could buy one LED bulb for $7.95. And we actually decided at that time we are going to stop selling any incandescent bulb, 2016. Because there is a better technology that helps people to actually take some money at home and that has a better or less impact on the planet.

What do we do? By doing this, we increase the volume of the LED in a way that allows us to have long-term agreements with our suppliers so we can reduce the price so many more people can afford to buy an LED bulb. This is, for me, one of the fascinating stories. You know how much we pay today for two LED bulbs with, of course, an improved technology because this keeps evolving? $1.95.

[00:10:23] Bill Thorne: Whoa.

[00:10:25] Javier Quiñones: From $7.65, $1.95.

[00:10:28] Bill Thorne: That's impressive.

[00:10:29] Javier Quiñones: And this is for us a way to also be closer to people, people that need to save. That's why I say sustainability is good, not for business, but also for the pockets of people. And we are privileged to be in many people's homes, and we are privileged to be able to support people living more sustainable and at the same time saving some money.

[00:10:52] Bill Thorne: Sustainability, I've always been conflicted because I think the name, or the word sustainability come to mean so much. And yet I think at its core, where it started and where we really needed to focus and continue to focus is the environmental sustainability. And part of it too, I don't know if you agree with this or not, Javi, but it's going to just take time.

It's generational. So you look at the generations, certainly younger than me, that have a far more keen sense of their responsibility to the environment, and then that then translate into a keen sense of who's doing the right thing, which then translates into, I'm going to support that particular business.

And so I think that by you all getting out early, what you did was you showed that if people agree with this particular thing that we're doing in the sustainability space, we're developing a loyal customer. And over time, that's only going to get better.

[00:11:51] Javier Quiñones: I fully agreed. There are two things here, or maybe three. The first and more important is probably this is the right thing to do, and we have to. I don't think there is an option. I don't think there is an alternative. And I think it's also important that everyone starts taking action.

I would say, don't plan for perfection. One step toward tomorrow is when I step forward already. So let's just start moving. And I think that's extremely important, I would say. Then on the consumer, yes, I think it's about inspiration. And I think it's about also doing this together.

So by doing it, we can actually help each other and the planet and help the pocket of everyone. And on the circularity, for example, I think this is one of the super important topics these days.

[00:12:39] Bill Thorne: For sure.

[00:12:40] Javier Quiñones: Yeah. I think unless we start really creating products that are 100% circular, there is a risk for many companies to not exist. And the price goes to the core of IKEA. So it's very easy to create the expensive products, but it's extremely difficult to create a well-designed, functional, with a nice form, that is sustainable at a low price.

And that's the core of our product. That's what we ask any single product. And that's why, for us, it's important. Because unless the products are circular, we're going to be needing to buy raw material continuously new that will only increase the prices of our products. And it's going to be extremely expensive in the future.

So there is no way that we can keep acting like this. And that's why first it's good for the customers, because we launched this service, buy back and resell. You can today bring your IKEA products to the IKEA store. We'll buy it from you, and we'll make sure that we give a second life.

And I think this is extremely important because it helps, not only the consumers, but also companies to actually have the reason to exist in the [Inaudible]. And think if companies do not jump into this, I think there is not the right reason to exist. So there's a risk that you will not exist in the future.

[00:14:02] Bill Thorne: The circular nature is something we talk about a lot, and it really wasn't a big — I think it's been out there for a while, but really, people focusing on it has been really important. It's the other interesting thing I think that y'all did, is you're not doing something just because you can do it. You're doing it because it's the right thing to do. And I think that more and more retailers are really focusing in on that. It's not just because you can. It's because it's the right thing to do. 

And I can tell that sustainability and what you're doing in that space and who you're helping in that regard, that's something you're very, very passionate about. But other than that, what do you love most about your job?

[00:14:44] Javier Quiñones: Well, probably I will connect this with my legacy, 16 and 10, and with my wife. I want to look at the face of them thinking that I'm doing something good for the future and for future generations, and that what I do makes sense. What I love, people know that IKEA is owned by a foundation and that 15% of the profits that we do every year go to the foundation.

And the foundation is actually to support mainly in two big aspects, poverty across the globe and climate change. A big part of our profit goes straight to the foundation. That's why for us, it's also important that we generate profit. Because profit secures that we are able to do what we do because it's for us to exist.

Then the other 85 stays in the company in ways of investing, in many different aspects. As I said, all the investments in solar, wind farms, renewable energy, geothermal and so on, comes from this 85%. So a big part of this comes from this money, which means that all stays in. We don't pay dividends to anyone. And the 15% to the foundation for the right reasons.

So for me, to wake up every morning knowing that the effort and the profitability makes a very good use, and that has a good impact, and in people on the communities we operate and so on, makes it real. When I was a full time in one of the stores, I remember I was in the kitchen department. I was selling kitchens, and one of my tasks was to plan the kitchen with the customer.

So we will spend one hour, one and a half hours, in the little corner in an IKEA store, planning a dream for them, and it was the first time when I came to the customer's home to see in reality what we actually planned on a paper in the corner of the IKEA store. I still remember this day because I think probably that's when I decided this is cool, doing something where I can actually impact on people.

And then I started to look at my career, like, maybe this is for me. I still remember, and feelings are difficult to forget. I still remember being in the kitchen, seeing the family, the kitchen working. I could predict this family is going to write so many amazing moments, and I probably have 0.001% of responsibility on that, but I still have it.

And for me, that was spectacular. And then I think the values. Another story here, I met Ingvar, our founder in 2006. He visited the store. I was a sales manager at that time in the store. And I went, I think it was 5:30 in the morning, thinking I cannot be after him. I cannot arrive [Inaudible]. He's a founder [Inaudible].

[00:17:56] Bill Thorne: Yeah, that's bad.

[00:17:57] Javier Quiñones: Exactly.

[00:17:57] Bill Thorne: You want to get there before the boss.

[00:17:59] Javier Quiñones: Exactly. That's right. You know what happened, Bill? I was, of course, late.

[00:18:04] Bill Thorne: Oh, no.

[00:18:05] Javier Quiñones: He made it at 4 a.m. You know the first thing he did? He went to talk with the truck drivers. He didn't go in the store. No one could open the door, probably. He went to the back of the store, and he was talking to the drivers, asking about how the experience was when they come to IKEA. And the first thing he would check, in our stores, on the backside, we have a shower, and we have a place for coffee and some snacks sometimes.

So the driver, when they arrive to IKEA, they can actually get a shower if they have been driving for a long time, or have a coffee, or things like this. So this is the first thing he actually checked. And that told me so much about this. It's about everyone contributing to this has to be updated and so on and so on. So these couple of things, for me — and I don't know if it is written. I don't know if it is more probably IKEA and the way we do things that attracted me. So I'm here 25 years after.

[00:19:08] Bill Thorne: It is always intriguing to me when I was with Walmart to travel with the president of Walmart U.S. and going to the stores and what they focused on. It's not the things I would think that they would focus on, but cleanliness of the bathroom, how the break room looked. Was it comfortable?

It was always very surprising to me that top of mind wasn't just necessarily the assortment and how it was assorted. It was the customer experience and how the associates were enjoying their jobs and what they could do to make the jobs easier. That stuck with me as something that is, I don't know if it's unique to retail, but I believe it's probably unique to retail. I guess one of the questions that I just got to ask you, how much IKEA furniture do you own?

[00:19:59] Javier Quiñones: Oh, a lot. I'm not going to say 100% because that would not be the truth, but a big part of it, and I love it. And some pieces have been with me. As I said, I've been moving in Spain, the UK, here. Some pieces are with me since the very beginning.

[00:20:23] Bill Thorne: Pretty awesome.

[00:20:23] Javier Quiñones: Beyond one of the armchair, it was actually designed — Ingvar, the founder, had one in the '50s. That was the design. And I still have it with me, not the one from the '50s. Not more than [Inaudible], but it is still in his home.

[00:20:43] Bill Thorne: That's pretty awesome.

[00:20:44] Javier Quiñones: It's beautiful. And the Billys, they last forever. So many of them, I will say I love them all.

[00:20:51] Bill Thorne: Well, you better. Recently, some friends of ours bought a villa in a small village in Italy called Penne, and they shop at the IKEA in Pescara. And last time I was there I went with him. And as I go into the IKEA, I'm like, "I feel like I could be at the Potomac Mills IKEA. I feel very much at home here."

It is interesting to me that when you look at the IKEAs around the world, there is that sense that when you walk in, you could walk into the one at your hometown, or you can walk in one in another country, but you feel like, I know this place. Is that something that you all do purposefully?

[00:21:35] Javier Quiñones: Yeah. I think, first we have common concept and idea of what IKEA should look like. And as I said, for me, there is no more beautiful place in the world than an IKEA store to go and get inspired about home furnishings and furniture. And that's the core. That's similar everywhere.

We, of course, have a core range that is the same all over the world that also help us to actually work with volumes and have good prices. That is also an extended range that is local, and it's adapted to the needs. Believe it or not, we don't all sleep in the same way.

[00:22:15] Bill Thorne: True that.

[00:22:17] Javier Quiñones: Absolutely.

[00:22:18] Bill Thorne: If you travel, you know that.

[00:22:19] Javier Quiñones: Exactly. But in Sweden, we have the Nordic system, the bed, the duvet cover and so on. And in many pockets in the U.S., we do that too. But we have comforters as one of the main way with the top sheet. So these things we adapt. We actually launched recently our comforter range, new, still in 2024. We are adapting, and we will see many more things coming.

Because we learn, we listen, and we try to, as you said, be on the side of the consumer and provide the right solutions for everyone. So yes, common range. But then you will see an extension that is local. King size mattress, for example, my apartment in Barcelona, I cannot fit, and in my home here in the U.S. So we adapt, and we are there for everyone, of course.

[00:23:15] Bill Thorne: That's pretty awesome.

[00:23:16] Javier Quiñones: The essence is you will see the restaurants. You will see the [Inaudible] too and so on and so on.

[00:23:21] Bill Thorne: So one of the things that we always talk about is if there's one constant in retail, it's change. Everything changes. Something that was there five years ago isn't here today, and what's here today won't necessarily be here in a year. So how do you stay current? And I mean you, Javi, in terms of your leadership, in terms of how you view this company and its future. How do you stay current in this industry of constant change?

[00:23:54] Javier Quiñones: And I think this is especially relevant or even stronger probably from the last 10 years obviously. But the last five years with COVID has changed so many things. Technology, AI is changing, so many.

[00:24:09] Bill Thorne: Oh my gosh, yeah.

[00:24:10] Javier Quiñones: In the way we are looking at the future and so on. First, we have been here for 40 years. Next year we celebrate the 40 years in the U.S., eight years globally a couple of years ago. So we have, I think, a good way of being in touch and in contact with the people, understand needs, understand what they need. And we always try to adapt to this new needs and trends that we see.

So that's part of the curiosity, staying on the ground. Go and visit people in their home. That's something we do, and that's beautiful. We go — they are so generous. They open the living room, and sometimes even a cup of tea or coffee, and sit down. We talk about their home, what they love, what they need.

So our showrooms and our range solutions represent this. And it's actually available, all the outcomes in our web. So you can find some of the learnings. We don't keep this a secret. Consumer side, we always try to be very close, talk to people in a natural way. I don't think there is a better way than over a coffee or a cup of tea. That's one. But then of course, I think retail has moved so much. Consumers, we see our percentage of ecommerce sales before COVID and today, and this has grown exponentially.

[00:25:36] Bill Thorne: Oh, I'm sure.

[00:25:36] Javier Quiñones: And of course we needed to adapt. We have been transforming what we look like from probably already before COVID, but it accelerated many things. When you look at our stores today, they are, almost all of them, fulfillment centers that they were not in the past.

So we are closer to the consumers, and we can actually fulfill many of the online orders. And we are investing in — from the 52 stores we have, we have 26 projects going on right now to transform them into something else or something to add in the building in addition to the normal tasks.

That's one. We have been investing, of course, digitally. We're going to see many more coming. We announced two years ago the investment in the U.S. of $2.2 billion, because the U.S. is a priority market for IKEA, and we have a super agenda of growth.

I get this question very often. What is the future of the brick-and-mortar? What is the future of the buildings and so on? And I still today, what is it? October 2024. I am sure that the future, at least the very near future, we're going to have the stores, and we're going to have amazing places where we talk, where we meet people, where we have fun, where we have restaurants and inviting people to join us.

And we are going to open many in the years to come, in much different sizes, being there to help people and to be closer to where people is. But of course, we have had to do so many changes in the way we do things and where we are present as well, because sadly, being outside the cities, as we have been doing many years, is going to be the only formula, but it's going to be part of the formula for sure. So lots on the transformation, lots understanding or being extremely curious. I've been listening and learning, being on top, I would say.

[00:27:39] Bill Thorne: Listening is such a big, big, big part of it. Javier, thank you so, so very much for being a guest on Retail Gets Real. I've enjoyed this conversation immensely, and I cannot wait to meet you in person in just a couple of months. I'll see you in New York in January.

[00:27:55] Javier Quiñones: See you in New York, Bill. Thank you very much. Really appreciate the time together.

[00:27:59] Bill Thorne: And dress warm. And thank you all for listening to another episode of Retail Gets Real. You can find more information about this episode at retail gets real dot com. I'm Bill Thorne. This is Retail Gets Real. Thanks, again, for listening. Until next time.