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Peak-End Rule & Loss Leader : The Marketing Strategy Behind IKEA's One Dollar Ice Cream

Think about the last time when you were shopping around at IKEA, which part will make you extremely happy? Perhaps lots of people will remember the one dollar ice cream after shopping. It shows that nearly 30% of IKEA customers are willing to return for the sake of that one dollar ice cream.

Psychologically, this strategy is based on a cognitive bias called Peak-End rule. When recalling the experience of a past adventure, people can only memorize several positive or negative moments at peaks and the final moment at the end. They will judge the experience mainly based on those highlighted moments. For other ordinary or negative experiences which may occupy most of the time during the adventure, they may be totally forgotten.

IKEA's one dollar ice cream is a good example to approve this bias. When you are shopping at IKEA, you may have a lot of good and bad experiences alternatively during the whole trip. For example, you may be extremely happy after finding a cup which can perfectly match the color of your table. Also, you may be sad when it takes a great effort to move furniture from the rack to your trolley etc. However, when you finish shopping and enjoy a one-dollar ice cream at the exit, you will get a positive moment at the end of your shopping journey. When you recall the past experience for the whole trip, most people will remember the last positive moment, the one-dollar ice cream, and thus consider the overall shopping experience as positive.

The key to success in IKEA's example is that one dollar ice cream is available at the exit instead of the entry point. If customers will get the ice cream before entering IKEA, the positive experience may be replaced by subsequent negative experiences, and thus the Peak-End rule will not work.

Another marketing strategy behind IKEA's one dollar ice cream is the "Loss Leader" strategy. It is a pricing strategy that sellers will lower the price for a specific product below its market cost to attract more customers, and thus stimulate the sales of other products. The one dollar ice cream will bring a good shopping experience to customers, and they are happy to come back from time to time, and thus more products will be sold. Moreover, the cheap price of the ice cream will easily make people think that the price of all IKEA's products are cheap as well, and thus spend more money on the furniture.

Attribution:
Image from Pixabay: https://pixabay.com/photos/ice-cream-...