The ‘IKEA Effect:’ Behind the Company’s Unique Business Model | WSJ The Economics Of

Dear WSJ, please do more of these "The Economics of" videos! They are great!

Actually IKEA is moving away the “maze” concept. I work a at a newly built store in Sweden that instead of forcing people through a specific path has an “organized shortcut” that allows you to go to any department directly. You don’t have to go through check-out to pay, the staff carries smartphones that can be used to pay. The the warehouse is automatic, robots picks the items for you. Also, in some bigger cities IKEA has smaller inner-city stores where you can only order the items for home delivery, skipping the warehouse concept completely. While this has been the IKEA way for a long time, it might not be the future concept of IKEA.

i love the maze concept. i get why it could be annoying, but it honestly just feels like an adventure. a huge factor for me is also how the rooms are the way items are displayed. i loved it when i was younger and i still love it now bc you can visualize what something will look like in real life. also, the stuffed animals are so cute!!!! idk if that’s a huge selling detail for most but oh my golly that is one of my favorites and i don’t even buy stuffed animals anymore

If someone ate a cake like that in front of me, I think I would go insane

I think the secret to their success is through having cheaper products then everyone else. While they feel much cheaper than other products with a premium price tag it still holds the value you get with it. I also think that having a modernized look also helps sell their products rather than going for one specific look like rustic or antique.

What's really frustrating is saying the store size in imperial units and then converting it to football fields for the Americans.

As an avid ikea hopper. I'm always surprised that people get confused by the maze and most people don't know that they have built in shortcuts that lead you straight through the department store. You can clear an Ikea in under 10 minutes start to finish including picking up your item and go through the register.

I work at IKEA's restaurant so this hits close to home, and no, I can't navigate through IKEA without getting lost either

Ikea is like Zara, you can mix and match with your expansive goods. And never goes wrong.

i know a guy who runs one of their german stores and said they even have their own forests that grow their wood, their own mills to process it and the trucks to distribute it. its probably one of the most efficient companies on earth

I've built all of my kids' beds with ikea (among lots of other things), I do relish the opportunity to build something for them by hand with love. I like the new fresh cut timber smell of their product, always signifies to me a new phase in life. I own really expensive furniture, but I also love my ikea pieces in equal measure.

Ah yes, the american football field, a classic unit of measure.

Another thing IKEA does is decoy pricing. They present an item in three styles, for example; white, black, and in oak. While the white and the black appear to be of similar quality (same materials, only different paint), the one in oak appears to be more upscale. So they price it like this: White: $40 Black: $60 Oak: $65 What customers intuitively think is that the White item is an unusually good deal, or that the oak item is an unusually good deal. Or both. In reality it's just the black item that's overpriced, and it acts as a decoy to put the other two items in better light.

Here in France they do include maps of the departments so you can take short cuts in the store to get to the bit you want to quickly. We love it shop there quite often for things for the home.

Ah yes, I always measure using American Football Fields.

Its pretty simple tbh, good products for the price, they last a long time and look nice, great customer service, clean and fun to walk around stores, and good meatballs haha.

Fact: The world’s largest IKEA store is opening in the Philippines 🇵🇭. Construction is still undergoing.

OK, but I would say the fact that most people can transport the furniture themselves, the fact that the furniture is generally much lighter than others, and the fact that most of the furniture can typically be disassembled without damage all mean that people will be more likely to buy something that doesn't require several people for transport and can be moved to another residence easily. The price is also nice.

I'm surprised this didn't talk about Ikea's complicated corporate structure that makes it a technically non-profit entity. I think the flat packing has nothing on not paying taxes. Seems like an important aspect of its economics.

we move to different cities every 2-3 yrs and ikea has been best for us, compact packaging, good utility and functional features and amazing quality.