How IKEA Grew 11.4% YOY Using Coffee Cup Emojis

In the early days before becoming the global enterprise it is today, IKEA was a 9-figure brand just trying to find its way in the world. Business was booming and IKEA stores around the world were teeming with eager shoppers, each seeking the perfect build-it-yourself addition to their homes.

But IKEA had one very large problem…

Even with their flatpack packaging, wide range of products, and reduced cost structure, customers were still miffed about the price. Complaints were being made, customers weren't filling their carts as much, and AOV was dropping.

IKEA needed a way to help customers realize just how cost-effective, yet high-quality their products really were, and fast.

So they decided to do the smart thing and revolutionize one, seemingly insignificant aspect of the shopping experience to radically boost their sales.

• They didn't increase prices or start frantically bundling.
• They didn't run more sales or increase their advertising.
• They didn't give away free gifts or build more offers.

They did something else that was absolutely genius...and 100% based in psychology...

Increasing AOV Like a Boss

In the past, IKEA customers would have encountered ordinary, mundane price tags—a standard affair found in any mega retailer. Customers were seeing hundreds, maybe even thousands of price tags every day (often attached to things that were a much higher priority than a DIY plant stand with built-in alarm clock.)

Because customers were shopping for things that were familiar and comforting, IKEA realized that they could greatly benefit from link their prices to something familiar and comforting as well.

To achieve this, IKEA introduced a revolutionary change to their price tags. Instead of using the default numerical price, IKEA switched every single price in the store to an image. Each "price icon" was related to products or household items that customers knew well.

An IKEA coffee table that usually sold for $29.99 now had a price tag of "☕️☕️☕️☕️".

A plant pot running $8.99 now sported a price of "🍌🍌🍌".

And dressers that went for $87.94 now had a price tag of "🔨🔨🔨."

IKEA was able to capitalize on three preexisting psychology heuristics (mental shortcuts) to get this done:

1. Availability Heuristic: they used familiar and easily accessible associations to make it easier for customers to process information and form positive associations.
2. Anchoring Heuristic: they anchored customers' perceptions of value by associating price tags with desirable and familiar items.
3. Familiarity Heuristic: they leveraged the preference for familiar options by connecting price tags to products customers already knew well.

Customers would have an easier time mentally processing the prices since they would be attached to an image of something they already knew and loved.

This idea was bonkers.

It goes against everything we've been taught as marketers, namely that the prices need to be crystal clear and concise if consumers are going to receive them warmly.

But in IKEA's case, it worked. And it worked extremely well.

• In-store sales grew by 11.4% YOY.
• Nightstands sold at the equivalent of 1,000 tubes of toothpaste.
• A record 200 pizza's worth of wardrobes were sold.
• 300 coffees worth of tables were purchased.

All this...for the investment of just about 3 bananas.

This ingenious strategy not only made the shopping experience more engaging but also facilitated a deeper emotional connection with the products themselves. As a result, the price tag became less of a detached annoyance that customers had to interact with to be able to realize their goals, and more of a relatable entity, forging a bridge between the potential purchase and the customer's personal desires.

IKEA recognized the true power of human psychology and leveraged it to their advantage.

It's important to note that IKEA's approach goes beyond mere aesthetics. The visual appeal of the price tag contributed to their overall effectiveness, but it was the emotional connection that did the heavy lifting.

By evoking positive associations with products that customers are already familiar with, IKEA strengthened the allure of the items on display. Suddenly, the price tags weren't just promoting pieces of Scandinavian-inspired, build-it-yourself furniture; they were using psychology to make a connection.

The next time you find yourself strolling through the labyrinthine of aisles in an IKEA store, take a moment to appreciate the strategic brilliance behind those seemingly insignificant price tags. They are more than just numbers and symbols; they are gateways to a world of comfort, style, and personal fulfillment.

How to Use the IKEA Price Tag Hack for Your Brand:

1. Identify relevant associations that resonate with your target audience's desires or aspirations. If you sell climbing gear, build visual associations with the shoes, ropes, carabiners, or backpacks that are a staple part of your customer's experience. If you're a makeup brand, use lipstick, powder, brushes, or eyeshadow. Capitalize on what your customers know best, and give them context for just how affordable you really are.
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2. Design visually appealing representations of these associations, but keep it simple - symbols, emojis, or simple references to related products is best practice here.
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3. Integrate the associations into your brand's buy box. Here's where the magic happens! You don't need much to test this out. If you're really brave, do an A/B test using a numerical price on one LP and a symbol on the other. If you want to test carefully at first, try applying the symbol next to the numerical price. The power is in the process here.
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4. Provide clear and informative product information alongside the associations. As always, you still need a good product and a good brand to help boost your effectiveness. Make sure you're providing what your customers really want and you'll be golden.
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5. Continuously test, analyze, and optimize the strategy based on customer behavior and feedback.

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