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Strategy | 3 MIN READ
This month's Brands We Love series features Trader Joe's, a highly successful grocery chain that started as an idea of catering to a growing demographic of the higher-educated population (thanks to the G.I Bill of Rights).
Most of us probably know the brand from its Hawaiian shirt-wearing employees, smaller store sizes, and a wildly loyal fan base. All of that and more are actually part of an unconventional operations and branding strategy that works so well with their target audience. Let’s dig into 3 key ingredients behind their success recipe:
A primary tactic for offering low prices involves limiting their inventory range to allow more focus on ensuring products are sourced directly from suppliers, exceeds their quality standards, and are delivered to the right stores and the expected time. That means most of Trader Joe's products have the same quality as branded items but are not marked-up to reflect a more mainstream brand name recognition. These unbranded items provide the perfect blank canvas for the folks at Trader Joe's to insert their unique brand elements, like the playful packaging, amusing product descriptions, and clear association to the brand name.
Frequently touted as a model of branding success, Trader Joe's ability to cultivate brand loyalty is the subject of numerous news articles, podcasts, and even academic studies. And it all stems from a set of straightforward core values of delivering products that are of quality, affordably priced, and reflect changing consumer needs in an unintimidating, convenient and friendly setting. These values are demonstrated in earnest throughout its stores, product packaging, and marketing communications . In fact, the brand doesn't engage in a ton of paid marketing and primarily relies on its internally produced product catalog that reads more like a delightful food magazine. Besides that, the brand maintains a fairly simple website and email marketing program (for new product announcements, recalls, or company updates) and occasionally dabbles in audio promotion via podcasts and radio advertising.
Another little known fact that many would find shocking about the brand is that despite the intense competition and low margins of the retail grocery industry - coupled with the rise of online grocery shopping, Trader Joe's has maintained its comfortable position as the grocery chain with the highest revenue per square foot . How does a brand accomplish that with prices much lower than leading competitors (like Wholefoods, Safeway, and Krogers)? The answer lies within the brand's deep-rooted emphasis on customer satisfaction and feeling like they are part of a community. Instead of relying on cost-cutting measures like increasing automation and self-checkout lanes, Trader Joe's maximizes the spending potential of each customer by maintaining a high level of in-store employee presence. In addition to stocking shelves, employees also encourage customer interaction, discussions about their products, a sense of curiosity to keep exploring the store, and therefore making them more open to trying new products.