Hawaiian shirts, handwritten signs, charming staff, Everything But the Bagel Seasoning and a cult following — grocery chain Trader Joe’s has created a distinct brand and set themselves apart from competitors. Offering high quality products at affordable costs, it isn’t hard to imagine how the brand rose to popularity — but there’s more behind the success than the price point.
Established in 1967, the company describes itself on its website as “a national chain of neighborhood grocery stores”. Although 594 locations currently operate across the United States, Trader Joe’s has managed to maintain a similar energy and appeal to that of small, local businesses. Their unique brand philosophies and uncommon practices, such as their hiring process and marketing tactics, have played major roles in the company’s success.
Anne Hamby, a marketing professor at Boise State University and regular shopper at Trader Joe’s, outlined the qualities prioritized in candidates during the recruitment process.
“The people that they hire are screened based on personality,” Hamby said. “They have to be people who are friendly and adventurous, who want to engage with people. And rather than having store clerks stock the shelves at night when no one’s there, they intentionally have clerks out there stocking during the day so that they can interact with customers.”
Trader Joe’s prioritizes the customer’s experience, not just once the food is home and cooked but during the process of grocery shopping itself. Sourcers for Trader Joe’s are constantly searching the world for new dishes for their customers. While the store consistently stocks a number of their staple products, new products that aren’t successful are removed from the shelves and replaced, offering clientele new and exciting options.
The company also sets itself apart from competitors with its promotional strategies. Hamby discussed Trader Joe’s unique approach to marketing — or lack thereof.
“They don’t pour a ton of ad dollars into promotions like many other stores do. In part because of this desire to keep to no-frills approaches to promotion and not spend money in that way, but also because they want to foster this feeling that they’re a small local business.”
Unlike many traditional grocery stores, Trader Joe’s runs no ad campaigns and offers no sales or coupons. Hamby spoke on how this approach has been effective for the company.
“The organic, consumer-driven word of mouth is not only a great way to save money, but it’s also a way to give consumers the reins,” Hamby said. “They’ve really leaned into this fierce advocacy that consumers have and let that do the talking for them, which is all the more compelling than if they were to go out and buy ads.”
Trader Joe’s also attracts their massive consumer base with, of course, their inventory. Their iconic products like mandarin orange chicken, dark chocolate peanut butter cups, cookie butter and cauliflower gnocchi don’t just taste good — the company utilizes psychological principles to create the ideal grocery shopping experience for their customers.
Choice overload is a common issue for the modern consumer. This phenomenon occurs “when an individual is overwhelmed by what appears to be similar options”, according to Psychology Today, and the numbers of products the average grocery store offers can easily trigger this.
Hamby discussed how Trader Joe’s stores combat choice overload with the inventory they offer.
“It’s counterintuitive,” Hamby said. “You’d think that more choice is better, but actually, more choices can be paralyzing. By streamlining the number of options, it makes it easier for people to make choices and also helps them keep costs down.”
The company stocks minimal name brands in their stores, and primarily offers Trader Joe’s label products. This means that customers have far less options to choose from, eliminating the stress that often comes with grocery shopping and adding to the store’s appeal. In addition, this practice allows Trader Joe’s to make a larger margin on profits, meaning prices are in turn lower for customers. According to a Consumers’ Checkbook survey, Trader Joe’s prices are on average 10-20% lower than most competitors.
Trader Joe’s grocery stores themselves are designed with psychological principles in mind. Not only are the buildings around a quarter of the size of the average grocery store, another factor in eliminating choice overload, the aisles are laid out in a way that allows for easy access and invites customers to interact with the products.
The freezer section, for instance, consists of rows of open top freezers, a very different sight than the average grocery store freezer aisle. Customers are more easily able to browse through and pick up products, meaning they are more likely to make a purchase.
Trader Joe’s success lies in more than just its low prices and beloved products. Through thoughtful hiring practices, a no-frills approach to marketing and strategic inventory choices, the grocery chain has cultivated an experience that feels personal, even on a national scale. The brand’s unusual practices continue to make Trader Joe’s the grocery store destination for lovers of whimsy, excitement, affordability and quality.
