Mark Price

PL Buyer: Joe's Trading Its Way to the Top

August 23, 2010

FROM RETAILWIRE:
While it's doubtful most retailers would want to copy Trader Joe's outright, they can learn some important lessons on how to make their private label lines as appealing to consumers. What lessons does Trader Joe's success offer those looking to develop their own private label programs?      [more...]

Anyone who has shopped at Trader Joe's recognizes the unique shopping experience. Not only is the customer service first rate, consistently, but the product assortment and variety makes the experience into an adventure as well.

Compare and contrast the product assortment to private label in a traditional grocery store in the US, and you find the exact opposite--the traditional grocery store stocks private label as a low-priced knock-off of an established brand, while TJ's has unique innovative products at a premium price. This is in contrast to private label in the UK, where the store version is usually more premium and distinctive than the branded version.

What can mainstream grocery retailers learn from TJ's product strategy?
* Private label is not required to be low-priced to be successful
* Stores with higher end private label become the brand, rather than relying on the same products as every other store
* Development of premium private label requires commitment and investment -- you cannot just rely on the manufacturers to produce the same product they sell branded, just under another label

Finally, the success of TJ's reflects the complete package of aligned customer service, culture and product assortment. There is no secret ingredient--it takes time and commitment to deliver a superior, distinctive customer experience.