Trader joe s case study

September 1, by Marty Lariviere At one point or another, we have mentioned nearly every major food retailer in the US. The company is privately held and generally prefers not to talk about itself.

Trader joe s case study

Email Last Updated Aug 26, 5: That would put it somewhere around on the Fortune list if it wasn't privately held. Well, after months of research into the famously secretive chain, Fortune just published a fascinating article that cracks open the Trader Joe's enigma.

Besides being a fan of TJ's, I'm always on the lookout for companies that somehow manage to take a boring, black and white picture of an age-old industry and completely redraw it using their own multicolor crayon set. That's exactly what Trader Joe's has done with the retail grocery store business.

So, from the Fortune story and my own observations, here's an analysis of this unique company's more or less counterintuitive approach to a mature industry, and insight into how its strategies may apply to other businesses. Consumers want fewer choices? Contrary to long-standing grocery store dogma, TJ's stores are smaller and the choices are fewer but consumers are happier.

I mean, who needs 40 varieties of peanut butter to choose from, anyway? Low prices for high-quality products. Amazingly, TJ's offers high-quality products at rock bottom prices. How does it do that?

Since it carries fewer products, its volumes are higher, giving it bargaining power when negotiating with its coveted suppliers. It's nothing new in business operations, but it's very new in the grocery business. The death of branding? Not at Trader Joe's. Customers trust the brand, which is one of the ways the company gets away with having fewer choices.

Some think TJ's secretiveness comes from Germany's Albrecht family which owns the chain, but that's not the case. TJ's is secretive because it doesn't want anyone to know who's making its products. It's a competitive advantage. And in many cases, suppliers feel the same way, since they cut TJ's a better deal on the same product than they do other customers.

Trader joe s case study

Take care of employees. Store managers can make in the low six figures while full-time employees start out at about half that; not bad for retail. Plus TJ's contributes No wonder the employees always seem so happy. An in-store experience that hails to an earlier, happier time.

Every employee knows the whole store and, instead of telling you where an item is, will literally guide you there. They'll offer you a basket or a cart if they think you need one and even tell you what they think of a product you're about to buy.

Don't follow trends, start them.

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TJ's was offering healthy foods before most consumers even knew what organic meant. They had the largest offering of California wines before anyone - and I mean anyone - thought they were worth a damn. Same goes for microbrewed beers.

If you want to see what grocery stores will be selling tomorrow, go to TJ's today. Know your customer and put your stores where they are. TJ's isn't all things to all people; it knows its customer and it maintains a laser-like focus on predicting and meeting their ever-changing needs. That includes knowing where to locate stores by paying attention to demographics like education and food and cooking magazine subscriptions.

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Trader joe s case study

Trader Joe’s has internally created a brand for its company using a different strategy as compared to other supermarkets. Its approach of effective relationship-building program pleases customers through unrivaled customer service.

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