Something else you’ll likely see at play in Ikea is decoy pricing: when a retailer throws a less appealing option into the mix to make other products seem like a better deal.
Let’s say there are 2 cabinets for sale: a $40 budget unit, and an $80 unit with more premium materials. Ikea might create a 3rd unit — one that offers neither the low price of the budget unit, nor the premium materials of the pricier unit — to make the others look better.
Studies have shown that the decoy effect can increase retail sales by as much as 14%.
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