Recently, I met a former head chef at a fancy restaurant who decided, in light of the pandemic, to open a home-cooking business based on deliveries. She offers a variety of middle-eastern food: Shakshuka, arayes, spicy fish, and shawarma — all in DIY boxes. The client receives a box with the basic produce: sauce, spices, eggs, or chicken neatly organized and ready to be mixed, heated, and eaten.
“It’s a win-win”, Shiri Kraus, chef and co-owner of Maghreb told me. “I get to make and sell food. The client gets to eat a tasty meal, can feel satisfied, and later brag to others because he had a part in making it”.
I’ve tried it myself, and as long as you don’t burn the eggs, I think being part of the process actually makes the food taste even better.
The IKEA Effect
The Swedish ready-to-assemble furniture giant needs no introduction. I won’t waste your time explaining the significance and unprecedented commercial success of this world-changing, industry-leading, wooden-pencil-giving conglomerate.
In over its 400 locations worldwide, It sold products in over $45 Billionduring 2019. The company’s overall worth is almost $20 Billion. IKEA is huge, if you hadn’t known that by now — I welcome you to planet Earth.
The question is why. And while many would claim it’s the design, the variety, or prices — a team of researchers thought of another reason and backed it up with 4 different experiments.
“Labor leads to love,” concluded Michael Norton (Harvard), Daniel Mochon (University of California), and Dan Ariely (Duke University) in the fascinating study researching the magnitude of the IKEA Effect.
In this experiment, a random group of builders was asked to assemble a plain IKEA storage box. The participants received the unassembled box and the instruction leaflet. A second randomly chosen group of ‘non-builders’ were given a fully assembled box and the time to inspect it as they pleased.
After this first stage, the participants were asked to bid for the box they were handed. The results were incredible. Those who built the box by themselves offered an average price which was 63% higher than the that offered by the participants who received an already built box. The ‘builders’ also felt more attached to the box and liked it more.
In the second experiment, participants were divided into three groups: The builders were asked to create an origami frog, crane, or a bird by themselves and bid for it. The second group of non-builders was asked to bid for the builders' origami creations. The third group of participants was asked to bid for origami animals that were created by origami experts.
Once again, the results are very interesting. The builders’ bid was significantly higher than the non-builders’ for their own creations. As a matter of fact, the builders were willing to offer almost the same amount for their amateurish origami as the third group was offering on the expert-made origami animals.
In the third experiment, the participants were once again divided into three groups. Group one received 10–12 pieces of Legos and was asked to assemble a helicopter, dog, bird, or duck. Group two was assigned the same task but was asked to disassemble the Legos after building them. Group three received an already assembled Lego product. Different participants from different groups were then paired together.
All participants were asked to bid on their Legos and on their partner’s Legos as well.
Those who built their own Lego set and kept it assembled made the highest bid on their own creation. They were also the ones who had a greater difference between the amount they were willing to spend on their own creation compared to the amount they offered for their partner’s work.
The difference between the bids made by those who built and then unbuilt their Legos and the group who received an already built Lego set was not significant at all.
In the final experiment, two groups of participants received an IKEA storage box. One group was asked to assemble it, the other group was asked to only assemble half of it. Each participant was then asked to bid on the box they had received.
Those who were allowed to finish building the box, bid higher than those who were only allowed to assemble half. The product was identical, the effort required to build the second half was minimal, and yet there was a significant difference in the evaluation made by the two groups.
What Did We Learn?
- When we build a product we tend to value it more and will have a more positive feeling towards it.
- We believe that a product that we’ve built is equivalent to that of an expert and hold it in similar value.
- The successful completion of a task has a direct effect on the value we give to the product of the labor that created it.
- Merely receiving an object, touching it, or spending time with it is not enough. Building it will cause us to value it more.
- The product doesn’t have to be personalized or unique. The effect was seen after building a totally generic product with zero room for customization.
- Others don’t necessarily share our evaluation of our creations and might deem them significantly less valuable than us.
What Does That Mean in Real Life?
The IKEA Effect experiments help explain the unprecedented success of the furniture maker. Consumers who take an active role in assembling the products are more fond of them, they value them more than they actually worth, and might feel like they’ve made a bargain when examining the finished product.
Companies have started changing the way they view customers in light of the IKEA Effect. Consumers are no longer solely viewed as recipients of value but also as co-creators of value.
However, the process of creating a product must be easy enough. Only a successful task showed signs of increased value. If the creation process takes too long or is too complicated — there’s no increase in value for the customer.
An important thing to bear in mind is that the IKEA Effect is retrospective, meaning that the company would first have to convince the customer to purchase and assemble the product before the effect takes place.
Lastly, the IKEA Effect perfectly explains the problem with selling used IKEA furniture. Quite simply, the builder would be asking too much money for the product he sees as expertly-created and very valuable. The buyer, however, won’t understand why on earth a wobbly coffee table should cost that much.
2. ‘Kassett’ storage boxes by IKEA
3. Instructions for folding an origami used in experiment 2
4. A Lego helicopter