A case of the IKEA ef­fect: when labour meets love

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A cus­tomer places a much higher value on an ob­ject that he has cre­ated than its pre-as­sem­bled equiv­a­lents, purely since it is self-made, show stud­ies

The coun­try’s first IKEA store opened its doors in Hy­der­abad in Au­gust. It wasn’t what you’d call a peace­ful, or­derly event. There’s a video clip that shows a huge crowd cor­ralled be­hind metal bar­ri­ers, surg­ing for­ward when the doors open, shout­ing, push­ing and shov­ing. Some peo­ple take ad­van­tage of the chaos to el­bow ahead of oth­ers. A woman is seen turn­ing around to scold a man be­hind her. A few uni­formed IKEA em­ploy­ees try their best to con­trol the mob, but they are in­ef­fec­tive at best; one is ac­tu­ally pushed back­ward by the press­ing crowd be­fore he man­ages to move for­ward.

Luck­ily, I be­lieve, no­body was hurt. But that clip is un­set­tling nev­er­the­less. There are oth­ers like it too. Check stores in the US that open for post-thanks­giv­ing shop­ping. Or check stores that stock some par­tic­u­larly de­sir­able toy or knick-knack—in their time, iphones and Cab­bage Patch Dolls and Win­dows 3.1 have all prompted sim­i­lar un­ruly mobs.

You might won­der, why would peo­ple be­have like this just to get into a store? And I’m par­tic­u­larly puz­zled by why an IKEA store stim­u­lated such pas­sion. Most of what IKEA sells, af­ter all, is fur­ni­ture. Mean­ing, desks and cab­i­nets and beds and so on. Sure, they have built up a rep­u­ta­tion for el­e­gance. Sure, it is a fa­mous in­ter­na­tional brand. Is that re­ally enough for so many peo­ple to line up and shove their way into the Hy­der­abad store on open­ing day?

It may be a silly ques­tion. Brands do at­tract peo­ple, I know. But re­mem­ber that IKEA also has made a name for it­self be­cause its fur­ni­ture needs you, the cus­tomer, to put it to­gether. In other words, you typ­i­cally don’t buy a bed at IKEA. You buy a kit that, us­ing some ba­sic tools, you as­sem­ble into a bed. By ask­ing you to as­sem­ble it, IKEA elim­i­nates its labour costs. So it is able to of­fer you the bed at a lower price—or at least, it is able to per­suade you theirs is a lower price—than beds their com­pe­ti­tion pro­duce.

So, were Hy­der­abadis flock­ing to the store for this lower price, too?

Per­haps. But I’m go­ing to sug­gest that, just maybe, there was one more fac­tor at work in this case, one more thing that po­ten­tial IKEA Hy­der­abad cus­tomers had at the back of their minds as they joined that crowd. Call it the IKEA ef­fect, and it has to do with as­sem­bling some­thing rather than buy­ing it fully made. It has to do with what that process of as­sem­bling it does to the way you look at the thing.

An ex­am­ple or two might help ex­plain what I mean.

Some years ago, some­one vis­it­ing from France brought us a gift: the Eif­fel Tower in kit form. There were sev­eral hun­dred tiny gleam­ing pieces and a page of di­a­grammed in­struc­tions, so cryp­tic that I thought I’d never un­der­stand them. But one day I sat down to as­sem­ble the Tower. It took some time to com­pre­hend the in­struc­tions, and fit­ting the pieces to­gether was hard. Still, af­ter a while, I started get­ting the hang of it. A few hours of work later, I had a gor­geous minia­ture replica of the fa­mous Tower. I was de­lighted, proud of my­self.

Two days later, some­one in­ad­ver­tently knocked it over and it shat­tered. I was crushed. Around the same time, a nicely crafted metal model of the Tower, which we also had, started to rust badly—but that didn’t bother me at all. The model I had as­sem­bled and that was now de­stroyed meant far more to me.

I didn’t know it then, but you could have called mine an in­stance of the IKEA ef­fect, in which you value an ob­ject that you cre­ate much higher than it is oth­er­wise worth, purely be­cause you cre­ated it. In 2011, three busi­ness school pro­fes­sors pub­lished a pa­per (The IKEA ef­fect: When la­bor leads to love, Michael I. Nor­ton, Daniel Mo­chon and Dan Ariely, Jour­nal of Con­sumer Psy­chol­ogy, July 2012), which de­scribed this ef­fect.

They wrote: “In four stud­ies in which con­sumers as­sem­bled IKEA boxes, folded origami, and built sets of Le­gos, we demon­strate and in­ves­ti­gate…the IKEA ef­fect—the in­crease in val­u­a­tion of self­made prod­ucts. Par­tic­i­pants saw their am­a­teur­ish creations as sim­i­lar in value to ex­perts’ creations, and ex­pected oth­ers to share their opin­ions.”

Of course, this idea of value that comes of your own ef­fort—“am­a­teur­ish” as your creations might be—is not some­thing that we learned about only in 2012.

For ex­am­ple, Nor­ton et al write about in­stant cake mixes. When man­u­fac­tur­ers came up with the idea in the 1950s, they did not ex­actly set the mar­kets on fire. The gen­eral im­pres­sion among cus­tomers seemed to be that these mixes made the task of bak­ing a cake far too easy, and they didn’t like the cakes they pro­duced. In fact, were these even cakes? But then, some­body hit upon a bril­liant idea: In­clude, in the in­struc­tions, the use of an egg to be sup­plied by the cus­tomer. Sim­ply mak­ing cus­tomers break an egg into the mix was enough to con­vince them they were now ac­tu­ally bak­ing a cake. Voila: In­stant cake mixes be­came a hit.

Take an­other ex­am­ple: The phe­nom­e­non of “re­spon­si­ble” tourism, of­ten called “vol­un­tourism”. Cer­tainly, you can take one more va­ca­tion where you stay in a com­fort­able re­sort and oc­ca­sion­ally dip your toes in a pool. But maybe you want some­thing a lit­tle more mem­o­rable, in which per­haps you do some­thing while on va­ca­tion that you think ac­tu­ally makes a dif­fer­ence of some kind? Thus vol­un­tourism, where you vol­un­teer in some ca­pac­ity on your trip: Look­ing af­ter en­dan­gered an­i­mals, help­ing in sci­en­tific re­search, pre­serv­ing and restor­ing age-old art­work. First dreamed up in the 1990s, there are now plenty of op­er­a­tors who spe­cial­ize in such travel. One of­fers you the choice to vol­un­teer with mon­keys in South Africa or bears in Ro­ma­nia, or to help in re­build­ing homes on the is­land of Do­minica af­ter a hur­ri­cane (“come as soon as you can”), or to coach kids at sports in In­dia. An­other agency summed it up thus for Huff­post: “When trav­ellers re­turn (home), they have a deeper cul­tural sen­si­tiv­ity to the chal­lenges and the sys­temic is­sues” in the places they vis­ited. Voila: A va­ca­tion to re­mem­ber al­ways. Maybe even one for which trav­ellers are will­ing to pay a pre­mium.

The IKEA ef­fect, ev­ery time. Your sweat, your time, your pas­sion—you put those into a project, it’s no sur­prise you fall in love with it.

How did Nor­ton, Ariely and Mo­chon mea­sure the ef­fect? In one ex­per­i­ment, they asked their ex­per­i­men­tal sub­jects to take an IKEA kit and as­sem­ble it to pro­duce an item of fur­ni­ture. Once done, they put a price on it, as well as on the same item of IKEA fur­ni­ture that came pre-as­sem­bled. They found that their sub­jects were will­ing to pay, on an av­er­age, 63% more for what they had pro­duced than for the pre-as­sem­bled equiv­a­lents. Even if they had made mis­takes in the as­sem­bly, they still placed a higher value on their creations. That 63%, by it­self, can ex­plain why IKEA sells fur­ni­ture in kit form. In fact, it might ex­plain that de­ci­sion bet­ter than the pos­si­bly lower cost of the prod­uct be­cause of sav­ings on labour. In fact, it sug­gests this to­tally counter-in­tu­itive no­tion: Pass­ing on the re­spon­si­bil­ity of labour to the cus­tomer ac­tu­ally in­creases what the cus­tomer is will­ing to pay. In that sense, it has got to be an ex­cel­lent sales strat­egy.

Clearly, though, there are lim­its to how much labour you can pass on. You have to be pretty sure your cus­tomer can ac­tu­ally fin­ish as­sem­bling your prod­uct, or you’re likely to have an un­happy cus­tomer. I can’t think of too many peo­ple who would be pleased to buy a car in kit form, for ex­am­ple. As­sem­bling a car is too com­plex a task for most of us—which is why we don’t com­monly see such kits for sale.

Which raises the ques­tion: What are those lim­its? Leave aside a car; are some fur­ni­ture kits in IKEA’S line-up com­plex enough to de­feat the av­er­age cus­tomer? What hap­pens then? Would she buy a sim­pler kit just so she can feel that sat­is­fac­tion again? Or would she get mad at IKEA?

Mo­chon ad­dressed that once in an in­ter­view with Na­tional Pub­lic Ra­dio: “If con­sumers ever found out that IKEA was mak­ing them feel dumb just to sell more ta­bles, I’m not sure what the back­lash would be against IKEA.”

Maybe the IKEA ef­fect only goes so far. Still, some­thing an­i­mated those swelling crowds at the Hy­der­abad store on open­ing day. What was it? The quiet sat­is­fac­tion that as­sem­bling a new IKEA kit promises to de­liver? Or the quiet sat­is­fac­tion of shov­ing oth­ers out of the way?

Once a com­puter sci­en­tist, Dilip D’souza now lives in Mum­bai and writes for his din­ners. His Twit­ter han­dle is @Dea­thends­fun

Out­side the IKEA store in Hy­der­abad. The swelling crowds on the store’s open­ing day can be partly at­trib­uted to the IKEA ef­fect—the quiet sat­is­fac­tion that as­sem­bling a new fur­ni­ture kit of­fers.

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