Wade Hudson/The Globe and Mail
When they meet a journalist, some executives keep their enthusiasm under wraps. Alert for hazards, they strive for a protective inscrutability. And then there’s Selwyn Crittendon. In the full, unedited version of this interview, which lasted an hour, the CEO of IKEA Canada used the word “love” 17 times. His passion—for retailing, for his company’s conspicuous attention to the issue of sustainability—is an energy source all its own. Some of that can be attributed to the fact that Crittendon is American. Born and raised in North Virginia, he lacks the Nordic reserve you might expect from the head of the Canadian branch of the Swedish retailing giant. And certainly he has plenty of reason to be happy, given IKEA Canada’s healthy financials and $2.9 billion in sales last year. But Crittendon also represents a clear case of someone who found his calling. He’s been with IKEA for 22 years—half his lifetime—rising from his first job as a customer convenience manager at a store in Woodbridge, Virginia. He arrived in Toronto last July and already speaks the names of Canadian cities and towns like someone eager to know them. In a cynical age, it’s noteworthy. We met at IKEA’s store in downtown Toronto.
You arrived last July. Have you been to all parts of the country now?
I have. By December, I’d visited every unit across the country, from Halifax to Winnipeg to Richmond to Coquitlam, and all of the GTA. It was important for me to get out and meet my 7,200 co-workers, and meet the communities we serve.
You’ve been working for IKEA since 2002. Did you always imagine you’d be at this level?
I think my greatest dream for IKEA was to be in a position where I could support or help others. No matter what the position—it could be customer experience, where I started. It could be in-store management. But it was always, what could I do to help the next person? What door could I open for others to dream, to deliver, to develop? So, for me, it didn’t matter the title. For sure, this is an awesome opportunity, an awesome responsibility. But I really do believe that me in this position, enabled by the many co-workers on my team—we can do magic.
How is IKEA Canada perceived in the larger IKEA framework?
Almost 50 years ago, this was IKEA’s first chance to come into North America and really understand the North American market. We have some of the best stores globally. I think I have the most beautiful store in IKEA Halifax, the way it sits on top of the hill and overlooks the bay. We have the Store of the Year in IKEA Montreal, leading in volume, visitation and sales in North America. I really do think we have some of the best pieces in the entire IKEA universe.
Since you’ve come, you’ve talked a lot about transformation: “transforming into the retailer
our consumers want IKEA to be.” It suggests that something needed to be changed. What wasn’t working?
When you look back at IKEA’s history, we have been solely focused on customers coming to our units from far and wide, spending the whole day out, searching, finding, picking your own goods, putting it in your car and driving back home to assemble. What we know now, and I think the pandemic has shown us, is that how customers buy, and how they want to live, is different now. So, we still have fantastic retail physical units, like you sit in here today, but we also have to introduce ways customers can shop whenever, however they want to shop. So, now we have the IKEA app, we have IKEA.ca, we have wonderful services that help them really do more. Because time and budget is limited, and we know that.
You’ve been talking to customers, and a lot of their concerns are about affordability. What specifically have you heard?
Fifty percent say they need to find a way to make their money stretch further. They’re trying to do more with less. My job here is, what can we do at IKEA to make sure that all the wonderful products and services are as affordable as possible? So, we started off with our campaign early this year—an investment of over $80 million in lowering prices on many of our paper products: Billy, Kallax and Malm. We’re now introducing new financial services. Affordability is the No. 1 challenge that we need to solve, and IKEA’s gonna do its part.
You’ve cut prices on about 1,500 products. How are you doing it—by reducing your margins or modifying the products?
I think one misconception is that IKEA is sitting on high profit margins. IKEA has always built on a foundation of simplicity. We work with small margins. For us, it’s about finding efficiencies, whether it’s in our supply system or finding ways here in the stores to be more efficient for our customers. We order more goods in higher volumes, so we can send fuller ships or fuller containers. We can source goods from our suppliers and have them shipped directly to our store, so it misses the middleman of our central distribution centres. It can be the way we look at more sustainable raw materials and lowering those costs. There are different ways that you can look at incrementally finding savings.
Anybody who’s bought IKEA products over the years has seen a gradual diminishment in the quality of the product. The particle board gets lighter, there’s less solid wood, the veneer is thinner, the metal connectors are now plastic. How much more can you squeeze out of the materials side of your cost equation?
I think what you’re talking about is how we’ve continued to revolutionize how we look at our products—especially the fittings—or our products themselves. So, I wouldn’t say that we’re diminishing our quality. If anything, our quality is higher than ever. I think what we’re doing is being smart about how we use our resources. Maybe on some of our bookcases, instead of having full panels of veneer all the way around, you look at the areas that have the surface contact. Those are the areas that we’ll protect, but do you really need full veneer on the sides, where you’re never gonna see or touch that? We’ve been smarter about how we designed our furniture, smart about our fittings. You’ll see many of our fittings not only fit the Malm dresser that I’m looking at there, but will fit others. So, we can actually reduce how many fittings we have by multipurposing. By doing that, we’re saving more of our resources, more money, and we give it back to our consumers.
This month, you raised the issue of the second-hand tax, by removing the HST on second-hand items in your “As Is” sections for 10 days. What was the thinking behind that?
If you shop at IKEA, there’s always been this “As Is” section where we have our product returns, and now we have “buy-back and resell,” where consumers bring back their gently used furniture that can be put into the second-hand economy. We believe those goods are great. We’re enticing a circular economy. Those products lose their value, they lose a little bit of love, but they never lose the tax. And why is that? Why should someone pay tax on the same article that’s already been taxed? For us, that’s an injustice. That 13% or so means a lot for some people. So, if we can introduce a way to find savings in a circular economy, then we want to have a discussion. So we hosted our initial One Home, One Planet event, called OHOP. We brought many different leaders from retail, government, academy, IKEA, to the table. Everyone wants to see a circular economy. But IKEA can’t do that by itself. So at Change.org, we put up a petition to leverage our government to look at the second-hand economy and how we can remove that second-hand tax for those second-hand goods. We collected over 30,000 signatures in two weeks, and we expect to have more.
Omnichannel is a big focus for IKEA right now. How would you describe the challenge that faces IKEA on that front?
I love the question. We’re investing more than $400 million dollars this year in omnichannel transformation. The middle part is where we’re transforming. How do we get goods to you when you need them and how you want them? If you imagine a grid, each one of our stores is a node in that network. Our website is a node in that network. Our remote customer meeting points are nodes in that network. We have a project in Richmond, B.C., where we’re looking at really expanding our distribution centre. We have work happening here in the GTA. Our Halifax location acts as a mini customer-distribution centre. It fulfills all of the e-commerce orders from that unit for Halifax, PEI and Newfoundland. We now have eight plan-and-order points in the country. We have partners like FedEx. We also have partners in our pickup points. And with that network, we’re able to get to areas where we didn’t think we could always go. So, one store can now support and help fulfill these orders from customers in these remote areas, and that’s all built off of that omnichannel transformation. So, how the customer chooses to shop with us shouldn’t feel any different. What they won’t notice is all the work in the background of how we move those goods, from the time you click the order to the time you receive it.
Canada’s a big country. Are there certain areas you just can’t reach?
There are difficulties in the outlying areas. So, if you talk about the Yukon or Newfoundland, there are challenges. But how do we make sure the deliveries that we make are done in a sustainable way? So, when we build a network, we’re making sure that we maximize energy efficiency and zero emissions. The challenge is finding the right partners, like GoBolt here, with electric vehicles, or RXO. Really, that’s the way of the future—partnerships.
Why does IKEA give its CEOs the title of chief sustainability officer?
I think it is a super cool title. For me, it’s really the balance of doing great for business, but also doing great for the planet. It’s my responsibility to make sure that every decision we make has an impact. We have to make sure that we continue to reduce the carbon. I’m happy to say here in Canada, with our solar panels, our two wind farms, we actually produce more energy than we consume. So we give that back. If we can find ways to make affordability and sustainability come together as a superpower, so you can live more with saving more, then it’s my responsibility to push that forward.
IKEA has taken some criticism over the years for sourcing some of its timber from protected areas. How do you balance that history with what you’re trying to do now?
I think conversations like this raise awareness. So, if we can learn, and we can understand different points of view, it’s great. But in this instance, I have to say the findings aren’t correct, because I believe we have the audits that actually show that we are not only achieving the standard that we need to be at; in many areas, we go beyond. We use FSC certified wood, and we know that almost 90% of our goods either come from certified wood, or recycled materials. We’re pushing hard for reuse, repair, diverting goods from landfill, and using more recycled goods. We have water saving taps, we have better cotton in our textiles. I love the opportunity to discuss things like this, but we need the facts.
Wade Hudson/The Globe and Mail
IKEA uses sustainability measurements as part of its unit performance scorecard. But they’re not tied into the bonus structure. So, what impact do they have?
When you have goals tied to your performance, it’s also about raising awareness. And sometimes it can be that you need to learn about a certain topic, you need to understand your impact, or the impacts by others. For me, it’s not about the bonus. It’s about the people we serve. If I can see my kids and their kids growing up in a world that took the time to really address these matters, that’s what pays for it. That’s the bonus that I will take any day. So for me, it’s not tied to a financial measure, it’s the right thing to do. And what’s good for people should be good for business.
There are 16 IKEA stores now in Canada. How many more will there be in a couple years?
I can’t tell all my secrets, but I am looking in many different areas right now. I think we will continue to explore in areas where we’re not, but we’re also gonna double down where we’re at. I have stores that are really digging into the markets that they serve. I’ll give you an example—the Calgary and the Ottawa stores are digging into their Indigenous people and their cultures. They have room sets that are really indicative of that customer. It’s about making sure that our units represent the markets. And when we have an opportunity, using our vast network, to get closer physically, that will happen.