The ‘IKEA Effect:’ Behind the Company’s Unique Business Model | WSJ The Economics Of

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A large part of IKEA’s success stems from its policy requiring its customers to build their own furniture. Given how ubiquitous IKEA is today, it can be difficult to appreciate just how innovative some of its business practices were when they were first introduced.

WSJ explores some of the strategies the Swedish company has used to become the world’s biggest furniture retailer including the behavioral psychology behind the ‘IKEA effect.’

0:00 Build-your-own products
0:46 Store layout
1:53 The ‘IKEA effect’
3:08 Mass market appeal
4:23 Democratic design

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#IKEA #Furniture #WSJ

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50 COMMENTS

  1. "Despite the long shopping trips and the DIY, customers can't seem to get enough of IKEA" 

    Why are they presenting these things with negative connotations? Are those two things not apart of the appeal of IKEA? Does WSJ not realise some people love the experience, as well as the DIY part?

  4. OK, but I would say the fact that most people can transport the furniture themselves, the fact that the furniture is generally much lighter than others, and the fact that most of the furniture can typically be disassembled without damage all mean that people will be more likely to buy something that doesn't require several people for transport and can be moved to another residence easily.

    The price is also nice.

  6. Please do not use wood. Rule of extraterrestrial Gods who created this Universe and Earth: don’t cut down trees. Trees are the homes of birds and insects. Cut down the trees and take away the homes of other beings, and we too are revenged with no home.

  8. I think there could have at least been a reference to the Bauhaus here. The main concept of Bauhaus was to integrate art, craftsmanship, and technology to create functional, aesthetically pleasing designs for the masses. The precursor to Ikea's democratic design mentioned in the video.

  9. Yeah, IKEY is good. Their furniture is stylish, cheap, and most of the time even quite sustainable. Add the some of the delicious food they have and boom- geat brand right there.

  21. Ther's another key feature of the flat package, it makes transport much easier. Probably truer in Europe than te US, but in big cities, a lot of people don't have a car, regardless of income level. Only Ikea can sell you a king size bed which you can take home under your arm by bus/metro. Also applies to the people with tiny urban cars where regular furniture would never fit. I remember getting all the furniture for my first apartment in one single trip with a VW Polo.

  23. I just want smart table now, because all that methodology building furniture is old and I want to build that smart table myself and make it PC case with AIO Liquid cooling from the smart heating google assistant/alexa appliances I found at the same department, because I already have it with voice to text in my smartphone – that would be my precise answer as a robot after writing print_r or Console.Write() at copilot or other alternatives I already dream of having someday as Philips RGB light bulbs with integrated wi-fi, because it just don't have those few led control wires from them power outlet.

  24. 😬 at the screws spinning in the particle board

    (I get that it’s just building a prop, but just so everyone knows: it doesn’t really matter if you use a power drill even though some manuals state not to, just use it at a slow speed so you don’t tear up the particle board)

  29. Ther's another key feature of the flat package, it makes transport much easier. Probably truer in Europe than te US, but in big cities, a lot of people don't have a car, regardless of income level. Only Ikea can sell you a king size bed which you can take home under your arm by bus/metro. Also applies to the people with tiny urban cars where regular furniture would never fit. I remember getting all the furniture for my first apartment in one single trip with a VW Polo.

  32. It is very interesting to explore what strategies IKEA uses to attract more customers. One thing that I did not know is their "labyrinth" complex store layout. This deliberate layout often leaves shoppers pleasantly disoriented, subtly encouraging impulse purchases. Also, they have a good pricing strategy (they use lower prices compared to its competitors). Finally, they are using flat packs, which ease the process of loading packs into vehicles. Together, these elements contribute to IKEA's success in attracting and retaining a diverse customer base.

  33. As someone from Europe and with an IKEA nearby I would never ever (and have never) buy furniture that was already assembled. Doing it yourself is kind a part of the fun of buying new stuff.

  34. I mean, you don't have to go throught the maze. Taking the ones I know of (Two in Oslo, one in Bergen), you can skip quite a lot:
    – There are the normal shortcuts that cuts through a lot.
    – You can go from the entrance up the stairs and right by is the cafeteria
    – You can go straight from the cafeteria to the 1st floor.
    – You can go straight from the first floor "entrance" to the warehouse section.
    – You can go straight from the entrance to the first floor "entrance".
    + The usual shortcuts shown on the map.
    So if you go there a bit more often than once in a while, you can get where you want to go rather fast.

  37. I don't know why everyone leaves this out but for people who go there frequently, there are detours all over the store, if you know the map, you don't have to go through everything

  44. The Ikea effect is a really interesting concept to apply to businesses that don’t sell physical products. In those situations, businesses might have to find creative ways to find ways to have the “labour causes love” and to implement democratic design for B2B companies. I’m interested in how these concepts could be applied in different ways for different industries.

  47. Bruh, IKEA was literally a day out for me and my family when I was a kid. Watch a free movie, then walk around, have your dinner, buy a teddy bear, parents buy some stuff in a factory looking place, nooooo… home.

  48. There's a nonprofit that builds playgrounds called KaBOOM! that operates on similar principles. The kids in the neighborhood submit ideas, they try to integrate some of those, and then community volunteers are among those who help build/put together the playground. They've found that this leads the community to care for the playgrounds better (and probably gives them a sense of pride in what they were a part of).

  50. Well, compared to other furniture stores their layout isn't a maze at all! And if you've been to IKEA a few times, you know the layout, and you can always check the map for shortcuts. Also, you can skip the "exhibition" upstairs completely if you don't need bigger items like a couch or a kitchen!
    I love the ivar shelves, they've been my companions for 20+ years, through many moves, I've expanded them, split them to fit different rooms, gone from shorter sides to fit sloped ceilings to the highest sides, some old parts my kids scribbled on with markers when they were little now live in our garage, and some parts have moved out with the eldest when he moved out. I'm sad some parts aren't available anymore, but they have introduced some new things that are pretty cool, too. And the biggest plus is, they sell a variety of boxes and other storage containers that fit those shelves perfectly, while being super affordable. No other furniture shop I know has anything like it.

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