Trader Joe’s success is a matter of values

Discussion
Photo: RetailWire
Oct 03, 2018
George Anderson

There’s so much that goes into the success of Trader Joe’s, well beyond unique private label foods and friendly associates wearing Hawaiian-themed shirts. In fact, as a company podcast recorded earlier this year outlines, Trader Joe’s ability to attract its throngs of customers/fans comes down to a set of corporate values embodied within the organization, from the c-suite to the store-level.

On episode two of “Inside Trader Joe’s” released in May, chairman and CEO Dan Bane provided a list of seven values that all new crew members learn when they come onboard.

  1. Integrity
  2. Product-driven company
  3. Wow customer service
  4. No bureaucracy
  5. Kaizen
  6. The store is the brand
  7. We’re a national chain of neighborhood grocery stores

While most of Trader Joe’s values are self-explanatory, kaizen — a Japanese word that translates roughly to continuous self-improvement — may be unfamiliar to many.

“For us that means everybody in the company owes everybody else a better job every day, every year, in what they do,” said Mr. Bane. “Because of that, we don’t really do budgeting, which — as a recovering CPA is, you know, heresy — but we don’t do budgeting. We just expect our stores to do a little bit better every year. They create their own targets. And it’s really paid off some big dividends for us.”

DISCUSSION QUESTIONS: From the vantage point of a customer, which of Trader Joe’s seven values are most important and why? Do other retailers and their associates live their values to the degree that is displayed by Trader Joe’s?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"Trader Joe’s is quirky, original, delightful and designed to create an overwhelmingly positive customer experience, starting with the flowers at the entrance."
"I am going with #3 WOW Customer Service and #7 National chain of neighborhood grocery stores. How better can you describe Trader Joe’s than those two?"
"The store is the brand. The Trader Joe’s brand stands for all the other six values. Shoppers understand. It’s that simple."

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25 Comments on "Trader Joe’s success is a matter of values"


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Dr. Stephen Needel
BrainTrust

For me, it’s #2 – product-driven. They offer unique products that we think are really tasty at a very good price. Close by is #3 – their customer service is outstanding, but I go there for the products and enjoy the service.

Neil Saunders
BrainTrust

I don’t think any one value is more important than any other; the point is that they all work together to create a positive culture. If I were forced to pick, then Kaizen would be my choice — mainly because in its widest sense the principles and philosophy that underpin it encapsulate all of the other things listed.

Min-Jee Hwang
Guest

From a customer perspective, the values that make the biggest difference are the products and the customer service. Grocery and in-store retail as a whole will excel based on strong service and unique products. Trader Joe’s does that well and it keeps them competitive. Retailers and grocers that don’t are losing ground.

Bob Amster
BrainTrust

My take is #2, then #3 and #4 together. People seem to like the products, the no-hassle returns and knowledgeable and helpful staff who will drop whatever they are doing and walk you right to the item if you ask for something. Getting the culture down to the lowest levels of the organization (the stores) is the biggest challenge retailers have. It reminds me of the success of Starbucks. They drink their own Kool-Aid also (and I don’t even drink their coffee).

Brandon Rael
BrainTrust

Aside from these seven core corporate values, Trader Joe’s is simply a fun place to shop. Does it have the vast organic assortments of Whole Foods, or the vastness of a Kroger? No — but it offers an experience that is a bit different and its sales associates help to make the journey more interesting compared to other supermarkets.

It’s honestly the sum of the Trader Joe’s core values that help to drive customers to come back for more.

David Weinand
BrainTrust

I think a clear understanding of and focus on the fact that the store is the brand drives most of the others. Trader Joe’s was about creating a great experience before that phrase came out of every retailer’s, software company’s and analyst’s mouth. Knowing their stores embody their brand drives the customer service and the feeling of a neighborhood store. Of course the product has to be great (and it is) but that also represents who they are as a brand.

Patricia Vekich Waldron
Staff

Exactly! Each store is the brand — it’s the nexus of irresistible products and a pleasant shopping trip.

Mohamed Amer
BrainTrust
Mohamed Amer
Independent Board Member, Investor and Startup Advisor
10 months 22 days ago

It’s impossible to say that one value reigns supreme over the others – the power of each Trader Joe’s value is made all the more impactful by being part of the larger set in a consistent fashion.

Their “wow” customer service may be the one most suited to rise to the top. Trader Joe’s treats each customer as if they’re their only customer through high-quality products with clean ingredients, priced at superior value in an easy-to-shop store. The crew members are friendly, helpful and ready to answer any question or offer recipe ideas. Their checkout lines are numerous and move faster than any other store I’ve ever visited. Yes, as a family we’ve been shopping at Trader Joe’s for the last 25 years and would miss it terribly if it weren’t in our neighborhood.

Paula Rosenblum
BrainTrust

I think it’s Kaizen. Long before Amazon bought Whole Foods, I took the day trip down to Trader Joe’s to go shopping (there are none near my home). I had a long chat with our cashier who was formerly with Whole Foods. She said Trader Joe’s was much more interested in giving the store associates autonomy and the ability to change things than Whole Foods. She was very passionate about it.

You can’t beat that. I just wish there were more of them!

George Anderson
Staff

When I spent some time at Trader Joe’s in the early 2000s, current and former Whole Foods’ employees were probably the biggest group of people who applied for crew jobs at Trader Joe’s. To a person, they would say that Whole Foods talked the talk, but the walk was another thing altogether. One problem that a small number of former WF people had when they went to TJ’s was adapting to multiple jobs and not simply having one function. Most people thrive in that environment, but some do prefer to do the same thing day in and day out.

Seth Nagle
BrainTrust

If I had to pick one value it would be Kaizen. In today’s industry change is constant. The moment a retailer gets complacent there’s another one ready to swoop in and gain market share. This value I believe flows directly into the other six and has allowed Trader Joe’s to stay ahead of the local and low-price grocers of the world trying to enter their markets.

Trader Joe’s and all retailers know you are only as good as your employees. The seven values outlined above do a great job creating that one-of-a-kind shopping experience and also outline clear expectations for their employees before they even step out of the back room.

Jeff Sward
BrainTrust

#1: Integrity. Trader Joe’s sits up with Costco in executing private label product. And no I don’t mean #2, product. I mean the integrity with which they execute. The quality/value equation is right up there with Kirkland. No cheating or short cuts. Consistency.

Cathy Hotka
BrainTrust

I’ll go with #6 — the store is the brand. Trader Joe’s is quirky, original, delightful, and designed to create an overwhelmingly positive customer experience, starting with the flowers at the entrance. My only problem with Trader Joe’s is the throngs of customers it attracts.

Jennifer McDermott
Guest

I’ve always shopped Trader Joe’s for both convenience and value. However recent news items (e.g the respectful way they handled Geoffrey Owens being outed as working there) has made me take more notice of what I had been taking for granted as typical shopping experiences. The happy and helpful employees and quality product. For me “the store is the brand” is the leading value. The other six all seem to feed into this.

John Karolefski
BrainTrust

I vote for #6. The store is the brand. The Trader Joe’s brand stands for all the other six values. Shoppers understand. It’s that simple.

Bill Friend
Guest

It’s interesting that Trader Joe’s hasn’t muddied its go-to-market strategy with an e-commerce offering yet. Some of these corporate values might not translate well into digital retailing and not just “the store is the brand.” Being a neighborhood store online would be very challenging, for instance. Would they have regional sub-sites to provide market differentiation?

Of course, they may not enter e-commerce at all, which has its own challenges in an increasingly omnichannel and mobile world. Sure they want to be the friendly neighborhood farmers market of the 21st century. But their customers want more than just a place to shop.

Carl Van Ostrand
Guest

I find this interesting as well. Because while they absolutely have a unique set of values/products and are always staying creative, I wonder how they will enter (or if they will enter) an online marketplace. I also find many of their products strangely challenging to open properly, but that’s a different issue.

Shep Hyken
BrainTrust

I’m partial to #3, which is to “wow the customer.” It’s this simple. We must focus on the customer. Without customers, we won’t be able to deliver on the other six values — as we won’t have customers to deliver them to.

The best companies have their values and live them. It is the alignment of those values with every employee that create the experience for both employees and customers.

David Naumann
BrainTrust
David Naumann
Vice President, Retail Marketing, enVista
10 months 22 days ago

In my opinion, the value that stands out the most is the “wow customer service.” While we love their product selection and look forward to perusing the next Fearless Flyer, what make us look forward to shopping frequently at Trader Joe’s is the warm feeling you get with every interaction with store associates. Every employee is helpful and personable and they almost feel like family. We feel good about spending our grocery dollars at Trader Joe’s.

Not a lot of grocery chains have been as successful as Trader Joe’s in curating a cult-like following, but another one that stands out is Wegmans.

Ananda Chakravarty
BrainTrust

I think our responses are more reflective of the BrainTrust than Trader Joe’s. Ironically, Trader Joe’s parent company, Aldi has a smaller set of values: consistency, simplicity and responsibility. As many have already mentioned, it’s an aggregation of the values and leadership support to make values a real part of the culture. Enron, despite its great values of respect, integrity, communication and excellence certainly didn’t embed it into their culture. For customers, integrity — and building trust of the brand in terms of their products, pricing, handling, etc. — is what makes everything else tick.

I don’t know if Trader Joe’s (or other retailers) live their culture or not — it might seem that way, but most retailers don’t measure it well or aren’t transparent about it. It’s also something very fluid based on who is leading and circumstances the organization is in. A culture shift can happen quickly with an executive leaving or joining, m&a, or economic downturns.

Ed Rosenbaum
BrainTrust

I am going with #3 WOW Customer Service and #7 National chain of neighborhood grocery stores. How better can you describe Trader Joe’s than those two? Customer service is a given. It is comfortable shopping there. In some ways, we look forward to our Trader Joe’s visits. You don’t go there and think you are in a corporate environment.

Jasmine Glasheen
BrainTrust

One of the biggest challenges for retailers, from my vantage point, is getting employees to serve as brand advocates and treat every single customer in a way management would endorse. Employees making minimum wage who feels like they’re treated like a number by corporate simply won’t care about the furthermost of the company; conversely, when employees are valued and heard, they’re also invested and this translates into the customer experience. For this reason, “no bureaucracy” is the essential component of keeping employees engaged with customers on a day-to-day basis.

Cynthia Holcomb
BrainTrust

Shopping Trader Joe’s is an emotional experience! The stores are happy places filled with products made without nasty, unhealthy fillers, just read the TJ pledge mounted high in every store. It is so easy to shop TJ, I find myself bagging my own groceries as the cashier and I have a real conversation. Trader Joe’s 7 point value list, created the magic formula able to duplicate itself over and over again, in cities and towns across the country. The experience is truly authentic.

Harley Feldman
BrainTrust

The most important value to the consumer for Trader Joe’s is being a product-given company. Consumers are attracted to Trader Joe’s due to the unique set of SKUs sold in the stores. Having said that, what makes Trader Joe’s successful is the application of all core values. While other retailers have their lists of values, most of them do not live the values to the extent that Trader Joe’s does.

Trevor Sumner
Guest

Trader Joe’s shines because you can get products you trust at a reasonable price. That’s a combination of being a product-driven company with a Kaizen culture of continuous improvement throughout the lifecycle.

wpDiscuz
Braintrust
"Trader Joe’s is quirky, original, delightful and designed to create an overwhelmingly positive customer experience, starting with the flowers at the entrance."
"I am going with #3 WOW Customer Service and #7 National chain of neighborhood grocery stores. How better can you describe Trader Joe’s than those two?"
"The store is the brand. The Trader Joe’s brand stands for all the other six values. Shoppers understand. It’s that simple."

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