John is the Associate Director of Food and Retail at Mintel, providing in-depth analysis and insight across food and retail reports in the US.
In a rapidly changing and competitive grocery retail landscape, most major supermarket chains are making big investments in new technologies, implementing or expanding delivery and store pickup services, and adding restaurants, wine bars, and other attractions designed to keep store traffic flowing. One of the most successful chains is following a different path, taking a pass on most of these developments and keeping its focus on what made it successful in the first place.
The secrets to Trader Joe’s success are pretty simple and not all that secret: smaller stores with a limited number of SKUs, a friendly, playful atmosphere, helpful employees, aggressively competitive pricing, and most importantly, the food. It’s Trader Joe’s focus on food that makes the rest of it work. Without its unique, healthy, and tasty foods, all of the other quirky pieces of the Trader Joe’s experience would be, well, just quirky.
Bringing food into focus
As the frozen foods aisle at many grocery retailers devolved over the years into a wasteland of overly processed, unhealthy and not-so-imaginative meals and side dishes, Trader Joe’s turned the freezer case into a starring attraction. Trader Joe’s frozen meals allow time-starved, budget-conscious foodies to explore a world of cuisines. While other retailers and marketers have significantly improved the quality and variety of frozen foods in the last few years, Trader Joe’s is still way ahead of the pack. An internet search of “Trader Joe’s frozen foods” yields not just food items, but expansive lists of favorites from food writers, bloggers, magazines and more.
Source: Medium
Trader Joe’s primary marketing vehicle, The Fearless Flyer, is a non-digital catalog containing must-read articles, ideas, and long-copy product descriptions. While Trader Joe’s official Instagram account now claims two million followers, the real strength of its social media presence is the army of influencers who have established themselves as Trader Joe’s experts and curators, sharing ideas and products, and enhancing Trader Joe’s mystique.
As most other major grocery retailers move aggressively into e-commerce, Trader Joe’s announced in early 2019 that it would discontinue its grocery delivery program in New York City and that it had no plans to introduce delivery into other markets. The company positioned the move as a way to focus resources and maintain its value positioning: “Instead of passing along unsustainable cost increases to our customers, removing delivery will allow us to continue offering outstanding values and to make better use of valuable space in our stores.”
What we think
While discontinuing home delivery might seem to put any grocery retailer at a competitive disadvantage, for Trader Joe’s, it’s a sign of strength. Trader Joe’s compelling food offerings give it flexibility that others don’t have. It’s a reminder to other retailers struggling to compete in a changing marketplace that some things don’t change. Success in the grocery business still begins and ends with the food.