Trader Joe’s Successfully Strategy

Case 3

Mengru Sun

Trader Joe’s successfully strategy offering highly selective products and private label products, providing a small and sophisticated store and also having friendly staff and delivering exceptional value for all customers. Trader Joe's makes buying food like a cultural experience. Unlike the general food supermarkets, messy goods are placed so that customers cannot calm down and pick the products they want, Trader Joe's places goods in a way that stores wine, so the food is looks like a treasure in soft light.

Trader Joe’s is a private company, so the gross profit margin data is not available. However, from the data of its competitors Whole Foods, its gross profit margin is maintained around 35%, and their own brand (365 everyday) is only occupy about 15% (By PYMNTS, 2017), which could be inferred, Trader Joe's gross profit margin will not be less than 40%.

Therefore, Trader Joe’s should maintain their current differentiation advantages. Including their product philosophy, culture, service and the cooperation model with suppliers. I suggest that they can add some promotional methods and start their e-commerce. For example, post some activities on social media, provide loyalty card can be used to attract more customers or to cooperate with the large e-commerce platform like amazon to motivate more opportunities. Although they are very successful in their operations, the lack of electronic sales will still lose a lot of opportunities. I am also recommended that Trade Joe’s can develop more unique products of their own brand and also develop the market. For example, open more stores in the United States and try to expand overseas.

Reference:

PYMNTS, Whole Foods Private Label Brand Gets Boost From Amazon.com, sourced from: https://www.pymnts.com/amazon/2017/whole-foods-grocery-sales-surge-on-amazon/