From a modern marketing point of view, grocery business and its stores are in “maturity and saturated stage” of the market-product life cycle. The aging of the baby boomer generation and the rising trend of healthy organic foods made way for Trader Joe’s, a less traditional grocery store with many more “hip” brands and innovations. Trader Joe’s is a fascinating company.
It is privately owned and a sassy young company. It started off modestly with few small convenience stores in Pasadena, California.Trader Joe’s were differentiated from the local grocery stores with its tropical theme and its “exclusive” business style (naming the store manager “Captain”, the assistant manager as the “First Mate”, and the remaining staff as the “Crew Members) [1]. Trader Joe’s was named after its founder - Joe Coulombe. The combination of innovative goods along with great service has created a faithful and constant customer base that continues to grow all over the country.
As of today, Trader Joe's has approximately 395 stores [2], not including the projected in-coming new stores opening across the United States.Almost half of its stores are in California where many people with health conscience attitudes reside and where also the influence of the Hollywood movie stars is centralized. Present in thirty other states, Trader Joe’s is considered a successful chain of popular gourmet grocery. Trader Joe’s built their image as “YOUR neighborhood grocery” store with a wide and diverse range of selections from the exotic to the organic food and beverages with extra-friendly staff.
Their first target market and customers are the millennial young middle class generation with the average age of 20 – 60.These customers are ecologically and environmentally health minded people who want healthy alternatives and varieties from around the world. Trader Joe’s competes with Whole Foods (WF), Bristol Farms (BF), Henry Markets (HM), and local farmers markets. It is the world of specialty natural foods market and Trader Joe’s is found to be performing very well.
The success of Trader Joe’s is a combination of a unique “4P” business model with an outstanding strategy that many other companies would envy.In a tough economic environment and high competition, a company needs many great innovations to survive and be successful. Trader Joe’s understands that building a unique shopping culture is one of the keys for its success. It has promoted and advertised itself as a super friendly neighborhood store, meant that it shall be a fun and rewarding shopping experience for the customer. The stores have colorful decorations rather than the plain wall of traditional grocery stores. Product signs on the aisles look like hand written cards with colorful markers; featured or new items are written on chalkboards.
The ambiance of the store is also pleasant and different with internal communication in the store is by the ringing of a bell. Trader Joe’s does not provide or offer any discounts or coupons like the other grocery stores or supermarkets. It instead uses different types of promotions such as in-store billboards describing featured products, “Fearless Flyer” newsletter announcing new products that customers should be aware (and should try), online recipes that use its private label products, etc… The staff is friendly, energetic and customer oriented.They handle multiple responsibilities including cashier, stocker, and helper. Trader Joe’s marketing strategy is aimed towards the “educated” consumer group.
These customers are people who would want to try new thing; or the health-conscious, ecologically conservative people who are seeking organic and healthy foods; young and single people who are looking the great taste and convenience of TJ’s packaged foods, etc. Nevertheless, Trader Joe’s products are unique and in many cases, exclusive to its own private label. It has great merchandise mix.Beside their basic organic and “non-organic” products, their special and “health conscience” products include vegan, vegetarian, no gluten, fat-free, quick meals, low sodium, Kosher, etc. Customers can fall in love with Trader Joe’s Organic Mango Passion Granola Cereal or their special blended Strawberry Kiwi Juice or the Gluten and Dairy-Free Homestyle Pancakes or Tofu Edamame Nuggets or Thai Vegetable Gyoza (handmade in Thailand with no artificial flavors or preservatives) or marinated rack of lamb or Mushroom Risotto!Overall, Trader Joe’s currently now performs well. But things can change when Trader Joe’s quickly expands and the specialty foods market becomes saturated.
Would it be able to uphold its highly rated customer service and preserve its own special image as a great neighborhood grocery store, in favor of its expansion? In a fast growing natural and organic foods market, there will be more new and existing competitors who seek to be like Trader Joe’s style, will Trader Joe’s be able to maintain its differentiation?Trader Joe’s definitely should change and modify its strategy to fit into the modern marketing in order to continue its organic growth. There are new factors, such as the internet, E-commerce, mass customization, new wave of foodies introduction that would require Trader Joe’s to adjust its business model. Trader Joe’s would need to stay ahead of its competitors by making intelligent decisions and offering more organic, natural, healthy goods with exceptional great quality and prices.Trader Joe’s would need to collect more customer feedback on its product offerings via survey, product score, store ballot, or media reviews. It would learn from this feedback, especially the consumer index scoring so that it would not offer similar new products.
Its “Turkey Meatloaf Muffins” earned a worst stuff ever award with a score of 0 over 10 scale in one on-line consumer survey [3]. Trader Joe’s would strongly consider offering an online shopping service that would help to capture more market share and reduce costs.In a fast moving and busy world, people tend to look for convenient ways of shopping. Trader Joe’s stores are often in select locations around the country, the majority in larger cities. Some consumers, who live in rural neighborhood or smaller cities, have the problem of finding or locating one of its stores.
Offering online shopping would help to eliminate this issue. It would also help to introduce Trader Joe’s unique goods to a larger consumer base. Furthermore, this e-commerce type would be able to measure customer satisfaction and get instant feedback through the online service.By collecting this information, Trader Joe’s can actively engage with its preferred customers and business partners and therefore continue to build great relationship with them, leading to overall better products. Trader Joe’s stores are small and offer few checkout lines.
In rush hours, there can be a long waiting line to check out with impatiently and grumpy customers. Perhaps Trader Joe’s would consider introducing self-checkout stations where the customers who are in hurry can easily check themselves out? Some people say the self-checkout stations are impersonal but it would offer flexibility and convenience.Trader Joe’s would run some studies and surveys to identify the need of these self-checkout stations, perhaps vary from store to store, location to location. These suggestions are only few and might not well address all the obstacles and challenges that Trader Joe’s is facing now.
Importantly, Trader Joe’s would need to continue building and positioning itself as special top notch grocery store while maintaining its own brand. It indeed will be a hard journey and will depend on the leadership and future business strategy of its German parent company. We will wait and see.
