The IKEA effect: discussing business strategy and consumer psychology

The IKEA effect β€” a B2 English lesson. Practise using the passive voice and expand vocabulary around business strategy and consumer behaviour.

The IKEA effect: discussing business strategy and consumer psychology

Summary

This ESL lesson for B2 English students explores Business and retail. Using a real video as the basis for discussion, students develop reading and listening comprehension, vocabulary, and grammar skills across a 90-minute class.

The grammar focus is The Passive Voice for Processes and Impersonal Statements. Key vocabulary includes conventional (adjective), retailer (noun), runaway success (noun phrase) and more, all drawn directly from the source material. The practical English section gives students useful phrases for real-life situations: You have recently bought a product or used a service and want to give feedback, either positive or negative..

Activities

00:02 You know they don't tell you, "Don't lay on the bed."
00:05 You're supposed to lay on the bed.
00:07 [Narrator] If you've ever visited an Ikea,
00:10 you've likely encountered
00:11 their store's endlessly winding floor plan.
00:14 This layout can be confusing, but that is by design.
00:19 Ikea may be the biggest furniture retailer on the planet
00:22 but it's certainly not conventional.
00:25 The Swedish furniture giant asks its customers
00:28 to build their own products
00:29 and it stores and distributes those products
00:32 in minimalist flat packed boxes.
00:35 So, how have these retail strategies,
00:37 as well as their famous Swedish meatballs
00:39 contributed to the company's runaway success?
00:43 This is the economics of Ikea,
00:46 a look at the innovative business practices
00:48 that have transformed modern life.
00:52 [Sarah] When you step into an Ikea,
00:53 you immediately sort of are put into this maze like
00:58 path of different rooms.
01:01 [Narrator] Ikea's store layout is a fixed path design
01:04 which means there's a designated road
01:06 that all customers must follow
01:08 that guides you through the store in one direction.
01:11 [Sarah] It's not a grab a carton of milk
01:13 and get out kind of store, it's the opposite of that.
01:18 It's very much set up to spend a day,
01:21 think about rooms you know, dream about what you really want
01:25 your bedroom to look like.
01:28 [Narrator] The floor plan of most Ikea stores
01:30 resembles a maze that curves about every 50 feet
01:33 to keep customers curious about what comes next.
01:37 Since an average Ikea store is around 300,000 square feet
01:40 or five American football fields,
01:43 that means a lot of walking.
01:44 An Ikea is to some frustratingly winding
01:48 but really it's laid out as an experience
01:51 to get you to buy more.
01:54 [Narrator] Ikea is famous
01:55 for putting its customers to work.
01:57 Unlike most furniture retailers
01:59 that sell products preassembled, many of Ikea's pieces
02:03 have to be built by their customers.
02:05 But why?
02:06 As many couples and their therapists will know
02:09 building your own Ikea cabinet can be challenging.
02:12 The big idea behind the Ikea effect is
02:15 consumers are more attached to have more positive feelings
02:19 towards objects or things that we've put effort into.
02:22 And that we actually think
02:24 that they're more valuable because of that.
02:28 [Narrator] The term Ikea effect was first coined in 2011
02:32 by researchers who noticed a similar phenomena
02:34 in other products and businesses.
02:37 When instant cake mixes were first introduced in the 1950s
02:41 they didn't sell well.
02:42 And then they said, "Let's add a fresh egg."
02:45 It was this idea that we wanna feel
02:47 like we're just participating enough to not feel guilty
02:50 about taking a shortcut.
02:52 [Man] When you make a cake from a mix which do you want?
02:55 A fresh egg cake or a cake made with dried eggs?
02:59 A higher, lighter, tastier cake, why fresh eggs of course.
03:03 The idea that we should love building products
03:06 isn't necessarily what Ikea intended.
03:09 [Narrator] If you've ever shopped at one of Ikea's
03:11 massive warehouse stores
03:13 you're likely aware of the unconventional product names
03:17 but what you may not realize is that in creating these items
03:20 Ikea sometimes comes up with the price tag first.
03:22 So we have a classic example that they could talk
03:24 about all the time is the $1 light bulb.
03:27 But they had this idea that a $1 LED light bulb,
03:30 you know this new type of light bulb
03:32 would be hard to achieve, but if they could achieve it,
03:34 lots of people would buy LED light bulbs.
03:36 So they just sort of designed backward
03:39 with the price point in mind.
03:41 [Narrator] That obsession with low prices
03:43 is a large part of why Ikea is the world's
03:46 largest furniture retailer.
03:48 Today, Ikea has 445 stores operating in 52 countries.
03:53 You know obviously if you go into a student dorm room,
03:55 you're gonna find a lot of Ikea,
03:57 but you'll also find some Ikea products
03:59 in a wealthy person's home.
04:01 And that's really what they're going for.
04:06 [Narrator] Today, Ikea is the very definition
04:08 of mass market appeal, but when the company first began
04:12 as a Swedish mail order business in 1943,
04:15 well-designed furniture tended to be expensive.
04:17 And as a result out of reach for most,
04:20 or seen as a serious long-term investment.
04:24 Ingvar Kamprad, who founded the company as a teenager,
04:27 pushed forward the idea that furniture could be flat packed
04:30 to massively reduce the cost of shipping and transportation.
04:34 So flat packing is really the largest arguably
04:38 Ikea invention that really led to the company's growth.
04:42 And the idea is that instead of buying, you know,
04:45 a piece of furniture I'll put together, it's deconstructed
04:48 into a flat pack, where you can fit more in a truck.
04:50 You can fit more in the Ikea warehouse
04:52 and you can also get it in your car.
04:54 And the trade-off is you know
04:55 you put it together at the end.
04:57 [Narrator] Flat packing is a practical aspect
04:59 of the philosophy that has long guided Ikea's success
05:05 called democratic design.
05:05 It's this idea that everything is imbalanced
05:06 both price, form, function, the aesthetic,
05:10 the sustainability.
05:10 [Narrator] This vision
05:11 to create a better everyday life for the many people
05:14 was sent forth more than 30 years ago by Kamprad
05:17 in a manifesto now presented to every Ikea employee.
05:21 And they talk about it almost religiously,
05:23 and fundamentally it's this idea
05:26 that when designing a product they think about
05:29 it can't just be really cool looking,
05:31 it can't just be functional,
05:32 it has to be all of those things.
05:35 [Narrator] So despite the long shopping trips
05:37 and the DIY, customers can't seem to get enough of Ikea.
05:42 Perhaps it's as simple as labor leaves to love.

Vocabulary focus

The vocabulary section introduces B2-level words and phrases related to Business and retail. Key terms include conventional (adjective), retailer (noun), runaway success (noun phrase), maze-like (adjective), flat-packed (adjective). Students practise using these terms in context through exercises drawn from the source material.

Grammar focus

This lesson focuses on The Passive Voice for Processes and Impersonal Statements. The passive voice is used when the focus is on the action itself, not on the person or thing performing the action. This is very common in business and academic English to describe processes, rules, or events where the 'doer' is unknown or unimportant.

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The IKEA effect: The psychology of building your own furniture
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