Decoded: The Tale of Two Drawers or How IKEA Uses The Decoy Effect to Increase Sales

A clever way IKEA nudges its consumers to change their decision process.

How could a product no one wants to buy help you sell more of what you want to? Discover the ins and outs of how to design offers and display them to create the decoy effect which has the power to change your bottom line.

In this article, you’ll find out:

  • The reason why IKEA happily keeps items that don’t sell well in their portfolio and even designs more of them.
  • How to actively use comparison to its full advantage in a way that boosts your sales online and offline. 
  • The effective properties of items or offers which few customers will buy, but that will still increase your total revenue.
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Navigating the world of infinite options 

If you have ever felt overwhelmed by choice when shopping you will agree: there’s a fine line between freedom of choice and choice overload. The consequences of too much choice can be severe -  author Barry Schwartz does a great job of teasing them all out in The Paradox of Choice. Choice overload can result in decision fatigue, sticking to the default option or even avoiding making a decision altogether.

Choice Overload

A result of too many choices being available. It can result in decision fatigue, sticking to the default option, or even avoiding making a decision altogether.

So if you are a retailer who, like IKEA, sells over 9,500 articles or offers 40+ versions of the same item, you might think twice about the impact it’s having on your customers. Wanting to avoid choice overload is a no brainer. It involves making comparisons and choices a little easier for your customers. But how can you be smart about it? Are there scientific methods that have been proved to work?

It helps to realize that our brains are pattern recognizing machines and that we navigate the world using context. If we – retailers, product designers, consultants and sales people – are aware of this, we can see opportunities more easily and can connect ideas we otherwise would not.

If we know our customers don’t assess options in a vacuum, we can use our understanding of their underlying psychology to design options and offers which can increase sales of other products – those we truly aim to sell.

Comparison helps people understand value. If we control that comparison, we help people understand the value. If we don’t, people will compare it to other things which aren’t under our control.

How can you create the decoy effect?

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