These two Case Studies come from a National Center on Case Studies. I think that a case study approach is very useful in applying knowledge and this is what makes….
– What are the key sources of Trader Joe’s competitive advantage? Is their advantage sustainable?
Unlike another retail stores, Trader Joe’s aims to provide an extraordinary shopping experience unable to be found anywhere else in the perspectives of the following key sources.
Store operations: The Stores are small in old strip malls in suburban locations. There are no self-out checkout lanes so the customers had opportunity to talk to employees.
Merchandising: It sold mostly private label goods at reasonable price by stocking fewer items, but more line-ups with dynamic mix compared to typical retail channels.
Also, it doesn’t follow trends, but tried to sell new products that customers had not experienced previously.
Customers: Trader Joe’s had been targeting clearly and not doing one-way communication. Trader Joe’s really understands the characteristics of customers so it enjoyed a cult-like following. Many customers created Facebook fan pages, wrote cookbooks featuring meals prepared with the firm’s products, and waited in line for hours before a new store opens.
The company has made consumers so loyal to it.
Marketing: Rather than offering any discount coupons, Trader Joe’s distributed a customer newsletter to provide information on certain products. Trader Joe’s doesn’t have its company-led social media strategy. Instead, the company finds a great deal of content generated by fans of the company. Therefore, credibility of customers has become very high because of such a fan base marketing.
People: Trader Joe’s has paid staffs more than they might expect at rival grocers whereas typical grocery stores have cut-off wages of their staff due to its decreased margin under strong competition. Also, the company wants its employees to become familiar with the company’s products so it provides funds to sample new food. Additionally, the company makes employees not bored about their job by letting employees rotate their jobs not only from day to day, but hour by hour. As the employees are satisfied with company, they always provide best service with customers so customers usually have good experience while shopping.
Trader Joe’s will thrive in success for the many years to come because it truly values its consumers. The importance of consumerism is in the “Frequent Newsletter” and the employees’ dedication to the consumer. Consumers will return to a store in which they feel valued and appreciated. Then, they continue to create a lot of fan sites to have a good impact on brand equity and reputation of Trader Joe’s. I think that there would be virtuous circle on this business for the future.