PL Buyer: Joe’s Trading Its Way to the Top
By John N. Frank
Through a special arrangement, what follows is a summary of
part of a current article from Private Label Buyer, presented here for
While it’s doubtful most retailers would want to copy Trader
Hawaiian-shirt-wearing employee dress code or start putting grass huts in their
aisles, they can learn some important lessons on how to make their private label
lines as appealing to consumers.
Today, Trader Joe’s stocks a limited assortment — about
2,025 SKUs — and
roughly 85 to 90 percent of those are private label offerings, says Len Lewis,
author of The Trader Joe’s Adventure, published in 2005. Average
annual sales per square foot for all its stores are $1,372, double the industry
averages, estimates Planet Retail, the London-based retail research
Trader Joe’s delivers quality in its private label products at prices
below those of national brands. At the same time, it sprinkles in uniquely
sourced outside brands and products to cultivate the sense that shoppers are
in for a shopping adventure every time they step into the store. When it finds
branded products that click with consumers, the retailer often will create
a private label version with differentiating characteristics to help it stand
out on shelves.
But the overarching message for other private label retailers
in the Trader Joe’s
formula is the importance of maintaining a consistent image — from the look
and feel of stores, to packaging and product sampling, to its offbeat marketing
through the Fearless Flyer newsletter.
“They have a brand promise … and they have a brand personality
that is consistently brought to their marketing campaigns,” said Jim
Hertel, managing partner with Willard Bishop.
Its success also shows that stores
shouldn’t be afraid to create private label brands that have some quirkiness
of their own, noted Kirsten Osolind, CEO and founder of RE:INVENTION Marketing.
product innovation is another Trader Joe’s hallmark others
can emulate. The retailer’s website notes that 10 new products are rolled
out each week. Introducing new private label offerings and even limited time
ones create the sense of discovery common at Trader Joe’s and others
such as Costco, which employ rotating limited-time specials. Be the first in
a new category rather than a follower of national brands, advises Blair McCaw,
president of Constellation Management Group.
“For so long, retailer private label strategy was really about just
mimicking the national brands. It’s only been the last three to five
years that retailers have started to develop brand management functions in
their companies and think about building or licensing brands to differentiate
themselves. Trader Joe’s
was out in front of that for a long time,” Mr. McCaw says.
is to do whatever you can to make the shopping experience a fun one for consumers.
That doesn’t mean just making kitschy outfits
standard uniform, says Ms. Osolind, who was Whole Foods’ national marketing
director in the late 1990s and early 2000s. Rather, it can relate to store
flow and consumer education efforts in-store.
“In a hypercompetitive world, differentiation is really the holy grail
of retailers,” Ms. Osolind says.
Discussion Question: What lessons does Trader Joe’s success offer those
looking to develop their own private label programs?