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  • They just have those random little things that you didn't really

  • know you ever wanted and then can't somehow live without.

  • Today we are going to Trader Joe's.

  • Trader Joe's. Trader Joe's.

  • Trader Joe's. The gingersnap cookies.

  • The babka is unbelievable.

  • Coconut rolls.

  • Those are my favorite things I've ever had in my life.

  • The little signs with the corny jokes on them.

  • Is that crazy to say like it just has a better vibe?

  • People love Trader Joe's.

  • They really do.

  • Welcome to Trader Joe's, where super friendly workers help you

  • shop for things like kale gnocchi and vegan tikka masala.

  • Trader Joe's calls itself your neighborhood grocery store,

  • except it's grown way beyond your neighborhood to over 500 stores

  • nationwide.The late founder Joe Coulombe opened the first

  • location in Los Angeles County in 1967.

  • He then sold Trader Joe's to grocery giant Aldi in 1979.

  • The quirky grocery brand hasamassed a cult following among health

  • and value conscious shoppers.

  • It's so addicting.

  • Prices and quality put together is unmatched pretty much

  • anywhere else. Experts estimate Trader Joe's outsells all of the

  • competition when it comes to sales per square foot.

  • The company brought in estimated total sales of $13.7

  • billionin 2019.

  • I'm at Trader Joe's right now.

  • The fan fervor around Trader Joe's has consumers begging for

  • more, even starting petitions for new locations.

  • There are none nearby.

  • And I've begged and beseeched.

  • There are even Instagram influencers dedicated to Trader Joe's

  • products. In terms of overall customer satisfaction, Trader Joe's

  • was the highest ranking national brand in Consumer Reports' 2019

  • ranking of grocery chains.

  • Customers report high levels of satisfaction despite the fact

  • that Trader Joe's is not necessarily convenient or a one-stop

  • shop. It has a limited selection of meat, produce and toiletries,

  • and there's no deli, self-checkout, online shopping or delivery

  • service.Sometimes I feel like they're missing key things that you

  • need to like make dinner.

  • I get it.I know I could get a larger and more affordable

  • selection of my diet staples like meat and produce somewhere

  • else. In fact, I live right next door to another major grocery

  • store.But twice a month I travel 100 blocks to shop at Trader

  • Joe's on72nd and Broadway in New York City.

  • I wait in massive lines at what's officially the busiest Trader

  • Joe's in the United States.

  • Then I carry two heavy bags up and down four flights of stairs

  • between the subway and my apartment.

  • Trader Joe's may not be the very best all around grocery store,

  • but it's not trying to be.

  • The company does certain things so well, it's built one of the

  • most passionate fan bases in the grocery business.

  • Here's how. The thing that's preposterous, right, is it's the

  • anti grocery store.

  • I often say imagine that I was pitching to investors the concept

  • of a new grocery store.

  • And I said, we're gonna have virtually no branded goods.

  • Nothing's ever gonna be on sale.

  • There's no coupons.

  • There's no loyalty card.

  • No self-checkout.

  • We're going to have cramped aisles and small stores with limited

  • selection. No TV ads.

  • Would you invest?

  • And people of course go, "No.

  • That sounds crazy."

  • Trader Joe's doesn't draw customers in with wide shiny aisles or

  • high tech shopping.

  • The company does minimal marketing and didn't have a social

  • media presence until just a few years ago.

  • Trader Joe's presents itself as a quaint local store.

  • Everything is hand-drawn, handwritten, and that gives the store a

  • very kind of low-key personal feeling.

  • It also gives a feeling that you're kind of in a market or a

  • local store that is not overly commercial.

  • Trader Joe's has I think really captured the culturalzeitgeist

  • in a way as far as not only tapping into the foodie culture, but

  • then also kind of the movement away from traditional and

  • established national or global brands and overly processed or

  • produced food.

  • The neighborhood market atmosphere helps shoppers feel that

  • they're making healthy and environmentally friendly choices.

  • In terms of sustainability,people have this warm, fuzzy feeling

  • and it's kind of reflected in the packaging.

  • Mark Gardiner is a former marketing executive who became

  • intrigued by the Trader Joe's brand.

  • So he worked as a crew member, stocking shelves and ringing up

  • customers at a Kansas City, Missouri location for a year starting

  • in 2011.

  • Then he wrote a book about it called Build a Brand like Trader

  • Joe's. Gardiner says Trader Joe's might look like a local store,

  • but its environmental impact is not necessarily better than other

  • grocery chains.

  • When I worked there, we had a product that was naan bread and the

  • naan bread was baked and frozen in India and shipped frozen to

  • Trader Joe's stores.

  • That's pretty crazy.

  • You can bake naan bread anywhere.

  • Trader Joe's has made efforts to be more environmentally

  • friendly, sometimes when under public pressure.

  • Trader Joe's may not operate just like a local market.

  • But the experience of being at one helps us feel good about our

  • shopping decisions.

  • The unique products that are only available at Trader Joe's.

  • Zhoug sauce. Haven't seen that anywhere else except Trader

  • Joe's.Teeny tiny avocados.

  • I feel like nobody else has those little avocados.

  • Trader Joe's presents itself as a local store, but one with

  • worldly connections.

  • Founder Joe Coulombe gave the store a south seas theme, complete

  • with Hawaiian shirt clad employees who are called captains and

  • crew members. The theme plays upon the idea of merchants sailing

  • the oceans to bring home diverse foods from around the world.

  • Trader Joe's product developers travel the world seeking

  • inspiration for these recipes.

  • They discuss trips to NewZealand, Japan, the Republic of Georgia

  • and beyondin an episode of the official company podcast.

  • They present their products as if they are local discoveries,

  • something that someone found when they were, let's say, traveling

  • Italy and they're now bringing it to you.

  • The result?Trader Joe's products feel specially sourced, truly

  • unique, and like they can't be found in other grocery stores.

  • The products seem even more one of a kind due to a generous use

  • of descriptive adjectives.

  • They don't just have cheddar cheese.

  • They have Wisconsin farmhouse cheddar cheese.

  • Or, you know, their gummy bears aren't just gummy bears.

  • They are fish shaped.

  • And so they're called Scandinavian swimmers.

  • Customers want to feel like they are smart shoppers.

  • If you can make them feel like they are in the know or that they

  • have found something that other people haven't, then that really

  • increases the value perception that they get from the price.

  • When an exotic new product comes out, you might get your hands on

  • it or you might not.

  • What makes Trader Joe's products seem even more special is they

  • come and go.

  • Trader Joe's regularly introduces new products and then

  • discontinues others since the stores are relatively small and

  • shelf space is limited.

  • So there's also this issue of scarcity.

  • If I like the item, buy it now.

  • I'm not sure it'll be here next month.

  • There is an element of impulse shopping that's going on right

  • because of the treasure hunt.

  • There's a sense of discoveryof things that feel rare and

  • urgent.Sometimes when I come home from Trader Joe's, I find

  • myself telling my husband everything I bought.

  • And your favorite lava cake.

  • It's almost like I'm bragging to him, like, look what I found.

  • And the process of making those discoveries is fun, too, because

  • it's not too overwhelming.

  • Trader Joe's stores are typically 10,000 to 15,000 square feet

  • in size. The average grocery store is about

  • 40,000 square feet, while supercenters like Walmart or Costco

  • can exceed 200,000 square feet.Trader Joe's stores carry about

  • 4,000 SKUs or scannable units of inventory.

  • The average grocery store carries about 30,000 SKUs, while

  • supercenters can hold four times that.

  • Researchers say too many choices can lead to paralysis.

  • It's easier to decide what you want when choosing from a smaller

  • selection of items like at Trader Joe's.

  • What customers really want is they want the perception of choice,

  • but they want the experience of no conflict, of less choice.

  • They want an easy choosing experience.

  • Sheena Iyengar conducted a well-known experiment that studied

  • just that. In the study, Iyengar set up a jam sampling station at

  • a grocery store. She found that more people purchased jam when

  • there were less options to choose from.

  • Customers also feel more confident they chose the best of what

  • was here. So the entire experience makes them feel both more

  • competent as well as more confident.

  • What Trader Joe's doesn't want you to know is that you can find

  • very similar or identical products at other grocery stores.

  • The company sells more than 80 percent private-label goods,

  • meaning they're made by third party manufacturers and sold with

  • Trader Joe's branding.

  • And Trader Joe's is notoriously secretive, especially about who

  • their suppliers are.

  • That way you don't know where their products really come from.

  • They don't want customers to feel that they have an alternative

  • way to get the same thing.

  • But in some cases, they actually could.

  • Trader Joe's sources some of its products from major

  • manufacturers that make all kinds of familiar goods.

  • And some of those goods under different brand names may actually

  • be similar or identical to the private label version sold at

  • Trader Joe's. For example, a 2017 Eater investigation found that

  • Naked Juice, a subsidiary of PepsiCo, has provided Trader Joe's

  • with bottled smoothies.

  • And when you compare a couple of Trader Joe's smoothies with

  • their naked juice counterparts, the ingredients are nearly

  • identical.But Trader Joe's can also have exclusive supplier

  • relationships.

  • I know when I worked there, there was a frozen pizza from Italy

  • and it was a little family in Italy somewhere that made the

  • pizzas. And Trader Joe's was their only customer.

  • That is obviously not the case for most products.

  • Now Trader Joe's does prefer, if possible, to tweak the recipe so

  • that technically they can say, ok look, this is completely

  • unique to us.The media expected there to be some backlash towards

  • this idea that Trader Joe's was trying to pretend as if these

  • products with their own.

  • But I think that what consumers discovered is, you know what, I'm

  • going to get the same product at a lower price and a better

  • shopping environment at Trader Joe's.

  • After all, one of the grocery store's biggest draws?

  • The prices are amazing.

  • Joe Coulombe established Trader Joe's in the 60s with a certain

  • customer in mind.

  • Coulombe said he created Trader Joe's to cater to the increasing

  • numbers of people getting a college degree.

  • It's the person who has good taste perhaps, who likes to try new

  • things but doesn't necessarily want to spend a great deal of

  • money.So how does Trader Joe's keep prices down?

  • By keeping its costs down.

  • For one thing, Trader Joe's sells mostly private-label goods

  • which are cheaper than name brand goods like Haagen-Dazs ice

  • cream or Starbucks coffee.

  • Experts say Trader Joe's is also able to negotiate better

  • pricing from suppliers by purchasing goods in larger quantities.

  • After all, Trader Joe's offers a smaller selection of products

  • than traditional grocery stores and thus sells larger quantities

  • of each item. It's also possible that Trader Joe's has help from

  • a corporate parent, Aldi.

  • Aldi could leverage its relationships with suppliers to help

  • Trader Joe's get better pricing.

  • Despite all these cost saving measures, experts say Trader Joe's

  • isn't necessarily cheaper than other discount grocery stores.

  • It just feels especially cheap.

  • I'm not sure if it's so much the reality of a big price

  • difference as it is the perception that you're getting a better

  • value from Trader Joe's.

  • You're getting higher quality ingredients, you're getting a

  • better edited selection, you're getting a much more pleasant

  • shopping experience.In other words, you're getting more for your

  • money than at similarly priced rivals.

  • But the Trader Joe's shopping experience isn't just about feeling

  • that the products are a great value.

  • It's about feeling that you are valued.

  • At this particular location, there's several people that know me

  • by name. And you know, hey, how you doing?

  • Why are Trader Joe's worker so friendly and happy all the time?

  • They're always striking up conversation with you at the cash

  • register or when walking you to a product you're looking for.

  • When Mark Gardiner worked at Trader Joe's, he found that this

  • employee behavior is not an accident.

  • They barely showed me how to work the cash register.