Trader Joe’s: Building Brand Loyalty One Customer at a Time

When you think of savvy brand strategies, grocery stores aren’t usually the first thing that come to mind. However, there is one store that outshines the competition by a long shot. California-based Trader Joe’s manages to outsell all other U.S. grocery stores with a whopping $1,734 per square foot, putting it ahead of Whole Foods’ $930 per square foot. So, as both a former employee and a marketing specialist, I’d like to share some insight into what they are doing right.

If you are familiar with Trader Joe’s, then you know that they don’t simply have customers – they have fans who have developed a deep loyalty to the store. If you shop there, then you’re a fan – no one goes there to just get groceries, people go there for the unique experience of “shopping at Trader Joe’s.”

Interestingly, Trader Joe’s takes an unconventional approach to branding. They do not follow best practices, yet they have still managed to maximize sales. Let’s take a look at what they do differently:

They Sell Unique House Brand Products:

Eighty percent of products sold in stores are their proprietary Trader Joe’s brand. Customers are attracted to the chain because they offer unique, quality products sold at a good price. Shelves at Trader Joe’s are stocked with products you would never find at another grocery store. Many of these products have unique ingredients, fun packaging, and even back stories. For example, the frozen food isle is stocked with goodies, but not the typical variety you would find at any grocery store. Instead, it’s full of their house-branded items such as Trader Joe’s Burrata, Prosciutto, & Arugula Flatbread Pizza, and their long list of Indian cuisine options like Tandoori Naan bread and Chicken Tikka Masala. They work with vendors from around the world to create authentic recipes from countries such as India, Italy, and Mexico.

They Spend $0 on Advertising:

Unlike other brands, Trader Joe’s does not pay for radio, T.V., or billboard advertisements. They don’t need to. The brand isn’t for everyone, and part of their strategy is actually trying to not appeal to everyone. They want to appeal to those who seek out healthy, high-quality, innovative food. They target audiences through their Fearless Flyer, a monthly paper that reveals new products and recipes, and set up food sample stations in the store. Up until recently, they didn’t even have a social media presence.

They Carve Their Own Path:

Trader Joe’s brands itself as a specialty grocery store. This means that the chain does not operate like a typical supermarket that sells anything from food, clothes, to cosmetics. Instead, their goal is to be the customer’s first and favorite choice, and not a “one-stop shopping” destination. They purposefully sell only a selection of groceries and seasonal products. While the average supermarket holds 35,000 stock-keeping units (SKUS), Trader Joe’s only holds 3000 – 4000 at any given time. They manage to do this by selling only one version of each product and carrying certain products only when in season. This allows them to get creative with seasonal foods, like their Trader Joe’s Turkey and Stuffing Seasoned Kettle Chips, Trader Joe’s Pumpkin Rolls with Pumpkin Spiced Icing, Trader Joe’s Pancake Bread, and Trader Joe’s Candy Cane Green tea, among others.

They Follow a “WOW” Customer Experience Approach:

The biggest differentiator between Trader Joe’s and a typical grocery store is the fact that they design and build the best experiences for their customers, which they refer to as the “WOW” experience. They do this by strategically hiring employees with the type of personalities they want to promote – those who love to interact with customers, and are chatty, helpful, friendly, and joyful.

As a former Trader Joe’s employee, part of my job was to walk around and look for people who may need help and offer to find products for them or even give them recipe suggestions. Finally, Trader Joe’s does not have self-check-out stations and doesn’t sell their products online. This way, a face-to-face interaction between customers and employees is guaranteed.

By developing their own unique products and focusing their efforts on providing an exceptional customer experience, Trader Joe’s has managed to turn grocery shopping from a boring errand into a delightful and exciting experience.

Frequently changing and bringing in new, unusual products makes customers feel like they’re going on a treasure hunt. They also introduce fun elements like hiding stuffed animals in grocery shelves and offering lollipops and stickers for little kids. They take the time to pay attention to little details and have successfully created a neighborhood feel that generates a personal, intimate atmosphere.

Trader Joe’s has built a fanbase of loyal customers obsessed with their products. I was and still am one of them! We can take away some helpful brand strategy lessons from their unorthodox approach of gaining loyal customers largely through word-of-mouth. My top takeaway: carve your own path and really get to know your customers. Trust me, they will thank you for it.

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