Tuesday, August 24, 2010

Trader Joe's Business Secret Recipe

Great article on Trader Joe's Business philosophy and history. (Saw it on Yahoo)

Some take aways from the article:

>> Strike a balance between choice and customer experience
"Swapping selection for value turns out not to be much of a tradeoff. Customers may think they want variety, but in reality too many options can lead to shopping paralysis. "People are worried they'll regret the choice they made," says Barry Schwartz, a Swarthmore professor and author of The Paradox of Choice. "People don't want to feel they made a mistake." Studies have found that buyers enjoy purchases more if they know the pool of options isn't quite so large. Trader Joe's organic creamy unsalted peanut butter will be more satisfying if there are only nine other peanut butters a shopper might have purchased instead of 39. Having a wide selection may help get customers in the store, but it won't increase the chances they'll buy. Read More Learn More about Choice - Go to blog post "Insight into choice"
>> Value pricing of product matters even if its the hottest trend

The success at Trader Joe's validates the behavior economics idea about "The Compromise Effect" - Customers rejecting the idea of shopping at higher priced Whole foods (and other gourmet retailers) or the lower priced Walmart products but end up finding value at Trader Joe Read More

>> Employee help in customer experience - take care of your employee
"An employee, noticing that he has his arms full, brings him a basket. At the register the perky cashier offers up that the mango sorbet Flickinger has selected is on her top 10 list of favorite Trader Joe's items.Read More
>> Manage and be deliberately careful in growth plan

Grow only after you worked out your supply chain issues and more importantly grow only after you can keep delivering the same customer experience that made you what you are. Read More

No comments: