So what exactly is the "Ikea Effect"…Essentially it revolves around the premise that if you make a product more labor-intensive for the end-user, buyers will ultimately come to prize that product more. Hence, when you order from Ikea you, for the most part, receive a box of pieces with a set of instructions and the occasional tool thrown in. It is now incumbent upon you to make this into something tangible and whole.
Why would this be a popular approach for companies to take…many are probably asking. In other words, why does having to assemble a bookshelf or sofa even, make the product more attractive? It could be that after having labored over the piece of furniture (in the case of Ikea/) you come to appreciate even more the result, as it did indeed come from your sweat equity. People tend to take pride in their own "creations" and thus assign them greater value.
Now this also has a flip side: for those who do toil over putting something together and ultimately fail at it, or it ends up taking way too long, then the opposite is true—they are less willing to pay for such an experience again.
Think about it though, if a company can get the consumer to buy the product, do the bulk of the heavy lifting and then feel ecstatic about having done so, well, this seems the perfect storm for any marketer. More and more companies are venturing into Ikea like territory. There are ready to cook meal kits popping up all over. And these are only gaining in popularity. So yes, in some instances customers are seeking ease and convenience. But more and more, we see that by making it just a bit more challenging, you may just up the overall appeal value of your products.
If you are trying to launch a new product or update one of your current offerings and need extra capital to do so, First Union Lending can certainly help! Our flexible business loan programs are designed with small businesses in mind. Call today!