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At Trader Joe’s, there’s a lot of method to the madness

“Trader Joe’s may be off-beat and casual in a laid-back, Hawaiian sort of way. But behind that madness is a buttoned-up formula for success that has simple lessons for all of us.”
“Trader Joe’s may be off-beat and casual in a laid-back, Hawaiian sort of way. But behind that madness is a buttoned-up formula for success that has simple lessons for all of us.”

I’ve checked out of many grocery stores. But I’ve never met a cashier like Marissa. She’s a “crew member” at Trader Joe’s brand-new location in Miami Beach.

For Marissa, bagging groceries is like playing a 3-D, real-world game of Tetris. A jumble of shapes go into a grocery bag in a tightly ordered block. Heavy, noncrushable items at the bottom, delicate fruits and vegetables on top, with hardly any wasted space.

“I may need another bag,” I fretted, assessing the number of items still to pack.

“You’re fine,” she said, clearly enjoying the challenge in front of her and pleased I appreciated her mastery. “I pack your bags the way I’d like my bags packed,” she told me on a recent Sunday morning while magically fitting my groceries into only two bags.

Crew member Carrie, who staffs the free-sample station, told me she was tickled to be back in the workforce after 28 years as a stay-at-home mom. At 60, she’s thrilled that her 20- or 30-something colleagues call her “Mama Carrie.”

Marissa and Carrie aren’t just well-trained, enthusiastic and passionate people: They’re brand evangelists, and they’re a big part of what makes the company such a financial success.

Trader Joe’s earns average sales of $2,000 per square foot. That’s 60% above Whole Foods, and more than double Fresh Market and Publix, according to grocery market analysts.

Trader Joe’s may be offbeat and casual in a laid-back, Hawaiian sort of way. But behind that madness is a buttoned-up formula for success that has simple lessons for all of us.

▪ Lesson No. 1: Hire the right people. Marissa and Carrie weren’t the only happy and helpful employees in the store. Crew members Dawn and Jake were equally passionate and proactive.

▪ Lesson No. 2: Dare to be different. Sure, Trader Joe’s sells bread, milk, eggs, apples and bananas. But customers flock there for beloved, one-of-a-kind items. You just can’t get Philly cheesesteak bao buns, cinnamon bun spread, sweet corn, burrata & basil ravioli, or ketchup-flavored spud crunchies anywhere else.

▪ Lesson No. 3: Less is Much more. The typical grocery store sells over 50,000 products. Trader Joe sells around 4,000. Publix has a dozen varieties of dishwashing liquid. Trader Joe’s has two, lavender and lemon. The result: Trader Joe’s stores take up less space, reducing rent and overhead, particularly in high-priced urban places like Miami Beach.

And having fewer goods actually drives more sales according to psychologists who study consumer behavior. They’ve have found again and again that more choices confuse us and make us less likely to buy.

▪ Lesson No. 4: Show your wares. Everyone likes free food. So, Trader Joe’s has a permanent free-sample station strategically located at the back, encouraging customers to walk the full-length of the store and hang out just a few steps from — and in full view of — the produce, meat and dairy sections.

Trader Joe’s stocks their frozen food in open freezer bins, with the boxes neatly arranged in tiers making it easy to lean in and find what you’re looking for — no foggy glass, no blasts of cold air and no guilt that the longer you hold the door open the more damage you’re doing to the ozone layer.

▪ Lesson No. 5: Low prices rule. Trader Joe’s is cheap, all the time. No sales. No coupons. Customers always feel confident in making a purchase. And those low prices are no accident. Eighty-percent of the company’s products are private labeled and come straight from the supplier, simplifying operations and cutting out middlemen.

True, not many of us will raise our brands to the cult-like status of Trader Joe’s. But behind all that whimsy are great lessons from a well-run business.

Adam Snitzer is a revenue strategy expert and president of Peak Revenue Performance, a consulting firm that specializes in helping companies attract more, high-paying customers. He can be reached at adam@peakrevenueperformance.com.

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