What is the IKEA Effect? The psychology of IKEA explained
“Give me something to assemble, I won’t look at the directions, I’ll try to figure it out by myself. It’s why I love Ikea furniture.”
As a business, you know you’ve arrived when your company name becomes part of everyday language.
“Cheeky Nandos?”
Those in the UK will be salivating when they hear this ubiquitous question for a quick chicken dinner (unless you’re vegan/vegetarian).
“Get an Uber”
Another commonly heard phrase pre-pandemic.
In the UK at least, it has become the go-to way of quickly saying “Why don’t you order a car service through a smartphone app?”
“Photoshop it!”
Now we’re talking! This is the next level of cultural acceptance, where your famous company name has been transformed into a verb!
Again, it’s the shortcut way of saying “How about changing your image with image editing software?”
Another notorious example of ‘business becomes verb’ is…
“Don’t Tase me, bro!”
It’s difficult to name another brand that produces electroshock weapons, isn’t it?
Yep, Taser is actually a company with its own normal website with About Us, social proof Reviews and Shopping Cart.
However, the epitome of a global brand becoming part of everyday language has to be: “Google it!”
How much would Yahoo or Bing pay for this kind of cultural kudos?
Not even the monster players like Apple, Coke, Amazon, Facebook and Nike have managed to achieve the holy grail of their name becoming a verb.
The psychology of the IKEA Effect explained
The IKEA Effect was first coined in a Harvard University study in 2011.
Whilst The Ikea Effect is not quite up there in popularity with “Google it!”, the phrase is gaining more and more ground, especially for those interested in psychology and Behavioural Economics.
IKEA is so omnipresent in our lives, operating in over 50 countries around the world.
And with their expansion into India and South America underway, pretty soon, what’s known as The IKEA Effect will be a global phenomenon.
Is The IKEA Effect a phenomenon where shoppers will follow arrows on the floor, creating a designated route that must be obeyed?
Well, that’s a small part of it, as well as the sunk cost bias of enormous time and effort you invest in a shopping expedition to IKEA.
The effort is the key thing.
A product that is inexpensive in relation to other alternatives in the same field may have an air of ‘cheap and nasty’ about it.
A sofa from IKEA is definitely more affordable than other furniture brands.
However, when you have expended great time, energy and effort in lugging the flatpack boxes home and building the furniture yourself, you are a victim of The IKEA Effect.
Now, you value the inexpensive object a great deal more because of the emotional attachment the building process has created.
“I made that!” is an extremely personal and powerful psychological attachment.
But who else to explain it better than Rory Sutherland?
And in this great video below from the Wall Street Journal, the IKEA Effect is simplified down to the bare bones and a catchy alliterative phrase: Labour leads to Love.
The IKEA Effect - online learning
The IKEA Effect is one lesson in our Behavioural Economics course with Rory Sutherland.
In 9 chapters with 39 short lessons, you’ll learn all about key behavioural principles such as nudging, framing, social proof, scarcity, commitment devices and even the ethics behind it all.
On completion, you will be equipped with the power to look at the world from a new perspective.
