[Music]
you know they don't tell you don't lay
on the bed
you're supposed to lay on the bed if
you've ever visited an ikea
you've likely encountered their stores
endlessly winding floor plan
this layout can be confusing
but that is by design ikea may be the
biggest furniture retailer on the planet
but it's certainly not conventional the
swedish furniture giant
asks its customers to build their own
products and
it stores and distributes those products
in minimalist flat-packed boxes
so how of these retail strategies as
well as their famous swedish meatballs
contributed to the company's runaway
success
this is the economics of ikea
a look at the innovative business
practices that have transformed
modern life when you step into an ikea
you immediately
sort of are put into this maze-like
path of different rooms ikea's store
layout
is a fixed path design which means
there's a designated road
that all customers must follow that
guides you through the store in one
direction
it's not a grab a carton of milk and get
out kind of store
it it's the opposite of that it's very
much set up
to spend a day think about rooms
you know dream about what you really
want your bedroom to look like
the floor plan of most ikea stores
resembles a maze
that curves about every 50 feet to keep
customers curious about what comes next
since an average ikea store is around
000 square feet
or five american football fields that
means a lot of walking
an ikea is to some frustratingly winding
but really it's laid out as an
experience to get you to buy more
ikea is famous for putting its customers
to work
unlike most furniture retailers that
sell products pre-assembled
many of ikea's pieces have to be built
by their customers
but why as many couples and their
therapists well know
building your own ikea cabinet can be
challenging
the big idea behind the ikea effect is
consumers are more attached to have more
positive feelings towards
objects or things that we've put effort
into and that we actually
think that they're more valuable because
of that
the term ikea effect was first coined in
2011
by researchers who noticed a similar
phenomena in other products and
businesses
when instant cake mixes were first
introduced in the 1950s
they didn't sell well and then they said
let's add a fresh egg
it was this idea that we want to feel
like we're just participating enough to
not feel guilty about taking a shortcut
when you make a cake from a mix which do
you want a fresh egg cake or a cake made
with dried eggs
for higher lighter tastier cake why
fresh eggs of course
the idea that we should love building
products
isn't necessarily what ikea intended
if you've ever shopped at one of ikea's
massive warehouse stores
you're likely aware of the
unconventional product names
but what you may not realize is that in
creating these items
ikea sometimes comes up with the price
tag first sort of a classic example that
they could talk about all the time is
the one
one dollar light bulb they had this idea
that a one dollar led light bulb
you know this new type of light bulb
would be hard to achieve but if they
could achieve it lots of people would
buy led light bulbs
so they just sort of designed backward
from the price with the price point in
mind
that obsession with low prices is a
large part of why ikea
is the world's largest furniture
retailer today
ikea has 445 stores operating in 52
countries
you know obviously if you go into a
student dorm room you're going to find a
lot of ikea
but you'll also find some ikea products
in a wealthy person's
home and that's really what they're
going for
today ikea is the very definition of
mass market appeal
but when the company first began as a
swedish mail order business in 1943
well-designed furniture tended to be
expensive and as a result
out of reach for most were seen as a
serious long-term investment
ingvar comprad who founded the company
as a teenager
pushed forward the idea that furniture
could be flat-packed
to massively reduce the cost of shipping
and transportation
so flat packing is really the largest
arguably ikea
invention that really led to the
company's growth
and the idea is that instead of buying
you know a piece of furniture all put
together
it's deconstructed into a flat pack
where you can fit more in a truck you
can fit more in the ikea warehouse and
you can also get it in your car
and the trade-off is you know you put it
together at the end
flat packing is a practical aspect of
the philosophy that has long
guided ikea's success called democratic
design
it's this idea that everything is in
balance both price form
function the aesthetic the
sustainability this vision
to create a better everyday life for the
many people
was sent forth more than 30 years ago by
comprad in a manifesto
now presented to every ikea employee and
they talk about it almost religiously
and fundamentally it's this idea that
when designing a product they think
about
it can't just be really cool looking it
can't just be functional it has to be
all those things
so despite the long shopping trips and
the diy
customers can't seem to get enough of
ikea
perhaps it's as simple as labor leaves
to love