Trader Joe’s, originally a local Californian chain store that offers uncommon groceries at low prices and that focus on a niche market of cultured and urbane clientele had a cautious growth during its first years and after it was acquired by a family that owned one of Germany’s most successful grocery chains expanded to 414 locations nationwide by 2013. With all that success, some grocery business competitors arose trying to compete. Even though experts estimate that the company has a higher return of investment than other supermarkets, there is a question if the company will be able to sustain its expansion without losing its charm effect. After reading the article there are some key strategic issues that must be addressed to keep Trader Joe’s expansion and survival. 1. Since the company does not invest in technology and locate the stores in small shopping plazas, Trader Joe’s customers complain about crowded check-out lines and parking lots. One of the seven core values of the organization is to create a WOW experience in their customers. If the costumer end to end experience is not good at all, something bad they should be doing or can be improved.
I will recommend updating to the industry standards, for example self check-out counters and invest in technologies to avoid making line at the store, as well as relocating as much as possible any stores with small parking lots. Looking at the Los Angeles blogger complain, I will suggest to first try to relocate the worst 5 Trader Joe’s stores. 2. Trader Joe’s sales rely on 80% of private label products that tend to be 20% of the sales of a typical supermarket. Also, when costumers search for first necessity products, they have to look for other company options losing a sales opportunity. The niche market that is already established for its uptown products will only bring people that can afford or like that kind of products. Selling first need products could complement sales and generate profits. I will recommend doing a pilot program in a new store and see the result. 3. The company lacks of a social media strategy, missing a great opportunity to create loyal customers, boost sales, promote their products and well as their brand and share their customer’s shopping experiences in the stores.
People in our days spend much of their time using their phone or computers to access to different Internet platforms like Facebook and Twitter. The world is always technologically evolving, and those who don’t evolve are likely to fail. Every business in the world has some main purposes, to survive and create profit for their owners. Following the same line of logic, selling more profitable products generates more profit. On the other hand, a customer that has a very good shopping experience is more likely to come back and buy again at a certain store generating profits again. Trader Joe’s core value “the store is our brand” may need to evolve as well and look for a “the brand is our business” core value.
Trader Joe’s should try to establish a stronger brand using social media. Social media is considered one of the stronger word-of-mouth and more affordable marketing strategies to boost sales that will increase profits and creating customer loyalty. And the best part is that this marketing strategy can be tailored to target a specific age range, educational level, sex, interests, etc. since all this information is in the user’s profile. As a recommendation, the organization should join a social media marketing strategy. I will suggest to start using Facebook since is the biggest social network that has more active users and is the most well known.