Eke Out the Best IKEA Effect

The “IKEA Effect” refers to the consumer research finding that consumers are willing to pay substantially more for a product they’ve had the opportunity to customize. IKEA, like a number of other retailers, encourages shoppers to select among sets of options in configuring a purchased item. These are “mass customization toolkits.” Although the name is ironic in that an IKEA product is usually priced lower than a completely assembled corresponding item, the IKEA Effect has been seen in a number of studies.
     Some years ago, studies at Tulane University, Harvard University, and Duke University attributed the IKEA Effect to the reinforcement of self-identity experienced via the choice of options, plus the value to a consumer which comes from validating their competence in assembling the personally-selected components. That second prong has its own irony, highlighted by the use of “toolkits” in “mass customization toolkits.” Many jokes are rooted in the incompetence faced by many as they attempt to put the pieces together. Clearly, there are limits to that second basis for the effect. Don’t count on it.
     Researchers at SUNY-Oneonta, National Chiayi University, and National Kaohsiung University of Science and Technology explored limitations on the first basis, with implications for retailers getting the best from the IKEA Effect. They found that the exertion of time or effort in choice and assembly is not a significant factor in building value for the purchaser. This argues for keeping the processes simple.
     Important factors included a wide range of options, but not at the expense of simplicity. Provide ways the shopper can easily sort through the choices to fit their desired identity Researchers at University of Alberta and University of St. Gallen created and then evaluated a technique for this: Develop a limited number of combinations of the major item attributes, then encourage the shopper to choose one of them and personalize using the other attributes. A fit with the individual’s aesthetic preferences counts.
     In a set of nine studies covering the item categories of shirts, automobiles, vacation packages, jewelry, and financial products, the researchers identified clear benefits of this customization via starting solutions. The purchasers were more satisfied with what they ended up buying and found more mental stimulation in using the items. And the store or retail firm owners were pleased with how the purchasers selected a greater number of item features, which resulted in a higher-dollar transaction.

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