There are lots of reasons why customers love Trader Joe’s, which recently “won” Dunnhumby’s Retail Perception Index study. So, what’s the secret? I see four elemental qualities of the TJ’s experience that all retailers really ought to be doing, but desperately few are delivering, and none better than the retail brand that customers most love.
Beautiful, Quality Cheapness
Customers find that Trader Joe's offers bargain-shop prices for gourmet goodies by having virtually no advertising budget, avoiding typical bad-habit back margin practices with vendors and silly promotions, and ruthlessly axing unpopular or low-selling products. TJ's sees itself as a “first-stop shop,” therefore willing not to carry everything and to reject high price volatility accordingly.
And it’s cheapness with quality. Over and above the obvious conversation about ingredients or composition of a product or service, let’s think about how stores give clues about quality and about how customers might interpret the messages.
Here are five things that customers experience in the store that can shape their perceptions of quality, and that Trader Joe’s is winning on:
1. Product packaging, display and presentation
- Simplicity; order versus chaos
- Abundance (especially of fresh foods)
- Physical condition and freshness
- Quality packaging that enhances the product’s natural characteristics, but never looks unnecessary
- Role of local, regional and ethnic provenance and range, which TJ’s is brilliant at
- Less is more—a curated range that is simple for customers
- Corporate brands of better-than national brand quality
3. Staff visibility and knowledge
- Crew attentiveness and care
- Training, expertise, physical cleanliness and confidence
- How they work: product handling, preparation, preconditioning and the degree to which staff take care, both in terms of ensuring the product is handled properly and in how staff ensure that the customer is getting good quality
4. Return policy: Best practice is no questions asked, return for any reason, and TJ’s is famous for this
5. Theatre / Romance
- Taste: sampling
- Teach me: provenance, how to cook, helpful hints, how to extend the life of this product
Love thy Customer
Most retailers really hate their customers. Consider how difficult it is for shoppers to navigate a large store to find the items they need, to choose between 45,000 or more SKUs, to dodge floor stacks and other impediments, and to wait in long checkout queues. In any given month in any given store, any typical customer sees, on average:
Trader Joe’s, on the other hand:
- Makes it simple and easy to shop with their limited, curated assortment. TJ’s stocks around 4,000 items.
- Trusts their customers: Their liberal return policy is evidence, along with the fact that any crew member can make it right for any customer.
- Have customers’ health and safety in mind. Hearing customer concerns about food safety, Trader Joe's has phased out foods imported from China and eliminated products that include spurious ingredients.
- Is culturally diverse. Trader Joe's presents its ethnic food products in ways that are easily understood. Plus, the company is seen as a good community and worldly citizen. Many of the company’s products are environmentally friendly, and they are noted for their donations to local causes as well.
The retailer acts as customer-obsessed about its brand and about keeping it very simple, and strives to avoid complication at all costs so customers get the best value. In short, Trader Joe’s demonstrates loyalty to its customer on many levels, and customers respond by giving more of their custom in return.
Trader Joe’s empowers its “crew members” and insists that they be amazingly friendly. Trader Joe’s connects with shoppers on a human level, and that’s why it wins hearts as well as wallets. The banner is offbeat and unusual, and demonstrates a sense of humor about itself (as seen in some of the brands mentioned above, with the famous “Two Buck Chuck” wine offers and in the Hawaiian shirts worn by crew members).
Can’t Buy Me Love?
Many undifferentiated mainstream retailers are delivering minimal value to their shoppers, because they’ve lost the customer plot, according to the RPI study. Neither clever marketing nor clever promotions are buying customer love; few retailers are standing out above the crowd.
In this age of “differentiate or die,” I passionately believe that the only answer to being agile at retail—and, indeed, to survival—is to follow the customer, to understand the consumer better than any of the competition, and to deliver on brilliant retail basics every day.
More importantly, I believe, is to create relationships and experiences that are deeply human. It is critical that we always apply HI—human intelligence—with profound empathy about people. That’s what Trader Joe’s does well, and why customers are showing the retailer their love.
David Ciancio is global customer strategist for Dunnhumby, a pioneer in customer data science, serving the world’s most customer-centric brands in a number of industries, including retail. David has 48 years’ experience in retail, 25 of which were in store management. He can be reached at David.Ciancio@dunnhumby.com.