Trung Phan Profile picture
Oct 20, 2021 24 tweets 11 min read Read on X
IKEA is the world's largest furniture brand. With annual sales hitting ~$50B+, it's the King of "buy stuff you never planned to buy".

Unsurprisingly, IKEA designs its stores with various psychological tricks to get you to spend more money.

Here's are 12 of them 🧵 Image
1/ IKEA's first psychological hack is the business model: sell furniture that requires the effort of self-assembly.

A 2011 Harvard study found people assign higher value to self-assembled goods (willing to pay 63% more vs. pre-assembled).

Shocker: it's named "The IKEA effect" Image
2/ Store locations

IKEA stores also require "effort" (and time) to get there, with many of the chain's 440+ locations outside of big cities and in suburban areas.

Once a shopper arrives after a long trek, they'll be motivated to buy something so as to not "waste the trip". Image
3/ Store flow

The "effort" continues in the store: first, you walk through IKEA's "showroom" (including 50+ inspirational settings.)

After travelling 1km+, you pick up furniture in the "market hall". Subconsciously, buying goods is a reward for all the distance you've covered. ImageImageImageImage
4/ Maze-like design

IKEA as a maze is a popular meme...but also true. Even though there are exits and shortcuts, the store is designed for a shopper to see everything on offer in the showroom.

And, again, the "effort" of solving the maze increases the perception of value. Image
5/ Guiding arrows

The maze-like design is complemented by floor arrows that guide shoppers.

This is another hack: you are handing over your decision-making (where to go) over to IKEA.

This is psychologically disarming and primes you for a later purchase. ImageImage
6/ Desensitizing environment

Like casinos, IKEA's showrooms and market halls don't have windows. Shoppers lose sense of time and space, staying focussed on the task of shopping. Image
7/ License to impulse buy

IKEA places small items everywhere:

◻️ Next to big-ticket items (eg. plates on a kitchen table) these look like a deal
◻️ Since it's a maze, you often pick up items "just in case you don't come back"
◻️ One purchase decision opens up the buying spigot Image
8/ Writing down a list

IKEA makes pencil/paper available to write down the item # you want to pick up. While it's a memory aid, the act of writing plays on a classic persuasion hack: consistency.

Once you've written down an item, you'll want to "follow through" on a purchase. ImageImage
9/ In-store dining

IKEA's founder Ingvar Kamprad said "You can't do business with someone on an empty stomach."

IKEA's have cafes where shoppers recharge, talk over potential purchases and -- crucially -- stay in the store longer.

Insanely, IKEA sells 1B+ meatballs a year. ImageImage
10/ Great value

IKEA has a "democratic design approach". It reverse engineers a product based on price first.

The Scandinavian aesthetic (simple, clean designs) lends itself to furniture that can be "flat-packed" for easy pick-up.

Also, self-assembly reduces cost (and price). Image
11/ Mirrors everywhere

It's no secret why: we're narcissists and can't keep eyes off of reflections of...ourselves.

IKEA brings out this positive emotion by placing mirrors literally everywhere. ImageImageImageImage
12/ The power of smell

Finally, IKEA's famous cinnamon buns are often placed near checkout.

Smell is extremely powerful for memory recall. IKEA is linking what should be the most painful part of the experience (buying) with the soothing scent of home baking. Image
13/ If you enjoyed that, I write threads breaking down tech and business 1-2x a week.

Def follow @TrungTPhan to catch them in your feed.

Here's a related one that might tickle your fancy:
15/ I discuss interesting topics like this once a week (with a healthy dose of dumb jokes) on the Not Investment Advice (NIA) podcast.

Check it out: linktr.ee/notinvestmenta… Image
16/ Also, never forget this classic *fake* viral story: "Man arrested for putting fake arrow decals on the floor of IKEA and creating a labyrinth with no exit" Image
17/ 😂😂😂 Image
21/ PS. I’m getting enough requests to do one of these threads for Costco, so will do that (but a real one, not the shitpost one @anothercohen did above lol)
23/ Thread dropping very soon (you made me do this @anothercohen) Image

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More from @TrungTPhan

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When the French captured the area in 1859, most economic activity in the region took place along the Saigon river.

The population built makeshift homes tightly bundled by the river banks. Outgrowth from this eventually lead to narrow alleyways between many buildings that is trademark of the city (the Khmer named the region Prey Nokor then French renamed it Saigon and then it was renamed to Ho Chi Minh City in 1976 after end of Vietnam War).

Over decades, the French created European street grids and built wide Paris-type boulevards in the city to funnel commerce to larger markets (also make the city easier to administer).

It was at these markets that French baguettes were introduced and traded.

Bánh mì bread is known for being flaky and crispy on the outside while fluffier on inside (so god damn good).

Two features of Saigon helped create this texture:

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▫️Ingredient: Wide availability of rice meant locals added rice flour to wheat flour imports (which were quite expensive). Rice flour is more resistant to moisture and creates a drier, crispier crust.

Fast forward to the 1930s: the French-designed street layout is largely complete. Now, the city centre has wide boulevards intersected by countless narrow alleyways.

The design was ideal for street vendor carts. These businesses were inspired by shophosue of colonial architecture to sell all types of goods as chaotic traffic rushed by.

Vietnam has some of the most slapping rice and soup dishes, but many people on the move in the mornings wanted something more portable and edible by hand.

Bánh mì was traditionally upper class fare but it met the need for on-the-go food.

Just fill the bread with some Vietnamese ingredients (braised pork, pickled vegetable, Vietnamese coriander, chilies) along with French goodies (pate).

Pair it with cà phê sữa đá (aka coffee with condensed milk aka caffeinated crack) and you’re laughing.Image
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Haven’t lived in Saigon for 10+ years but ate a banh mi every other day when I did.

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