Building More Than Just Furniture: How Does the IKEA Effect Impact Consumer Needs on Generation Z and Millennials

• Main Authors: Mansukhani, Leisha R., Asencio, Juliana Lila R.
• Format: text
• Published: Animo Repository 2024
• Subjects: IKEA effect; generational purchase patterns; Generation z; millennials; valuable
• Online Access: https://animorepository.dlsu.edu.ph/conf_shsrescon/2024/paper_cli/8; https://animorepository.dlsu.edu.ph/context/conf_shsrescon/article/2427/viewcontent/PP_CLI_Mansukhani_Asencio___JULIANA_LILA_ASENCIO.docx.pdf
• Institution: De La Salle University

In the 1950s, Betty Crocker simplified cake preparation with mix, water, and bake, but consumers felt less valuable. By adding butter, oil, and eggs, they increased sales and fostered a sense of ownership, known as the “IKEA Effect.” This study explores how Generation Z and Millennials respond to this cognitive bias in purchasing, focusing on how the preference for partially handcrafted products impacted generational emotional needs. The research involved Millennials (1981-1996) and Generation Z’s (1997-2011). The study was limited by the lack of control over the assembly process and the different budget priorities of the two generations, especially products needing extra assistance during assembly regarding the personality traits and cultural influences influenced by the “IKEA Effect.” Using an experimental and observational design, of qualitative and quantitative approaches with two tasks—donut decorating and origami—data were gathered on Generation Z and Millennials valued and priced a product based on its state, whether pre-assembled or post-assembled. Results showed that Builders of both Generation Z and Millennials valued a product more as the participants of both generations helped to assemble it. Analysis of the collected data revealed differences in purchasing habits between Generation Z and Millennials. Businesses could use this manipulative cognitive bias to increase sales by selling pre-assembled products while reducing costs to create a sense of self-efficacy among shoppers.