Discussion Board 2
While vacationing in the Caribbean, founder "Trader" Joe Coulombe, discovered a way to differentiate his 7-Eleven-style corner stores from those of his competitors. Joe observed that consumers are more likely to try new things while on vacation. With a nautical theme and cheerful guides sporting Hawaiian shirts, Joe transformed his stores into oases of value by replacing humdrum sundries with exotic, one-of-a- kind foods priced persuasively below any reasonable competitor. For over fifty years, Trader Joe's has competed with such giants as Whole Foods and Dean & DeLuca. So what is its recipe for success? The company applies its pursuit of value to every facet of its operations. Buyers travel all over the world in search of great tasting foods and beverages. By focusing on natural ingredients, inspiring flavors, and buying direct from the producer whenever possible, Trader Joes' is able to keep costs down. The chain prides itself on its thriftiness and cost-saving measures, proclaiming, "We run a pretty lean ship," "Every penny we save is a penny you save," and "Our CEO doesn't even have a secretary." "When you look at food retailers," says Richard George, professor of food marketing at St. Joseph's University, "there is the low end, the big middle, and then there is the cool edge-that's Trader Joe's." But how does Trader Joe's compare with other stores with an edge, such as Whole Foods? Both obtain products locally and from all over the world. Each values employees and strives to offer the highest quality. However, there's no mistaking that Trader Joe's is cozy and intimate, whereas Whole Foods' spacious stores offer an abundance of choices. By limiting its stock and selling quality products at low prices, Trader Joe's sells twice as much per square foot than other supermarkets. Most retail mega-markets, such as Whole Foods, carry between 25,000 and 45,000 products; Trader Joe's stores carry only 1,500 to 2,000. But this scarcity benefits both Trader Joe's and its customers. According to Swarthmore professor Barry Schwartz, author of The Paradox of Choice: Why Less Is More, "Giving people too much choice can result in paralysis. . . . Research shows that the more options you offer, the less likely people are to choose any." Despite the lighthearted tone suggested by marketing materials and in-store ads, Trader Joe's aggressively courts friendly, customer-oriented employees by writing job descriptions highlighting desired soft skills ("ambitious and adventurous, enjoy smiling and have a strong sense of values") as much as actual retail experience. Trader Joe's connects with its customers because of the culture of product knowledge and customer involvement that its management cultivates among store employees. Trader Joe's considers its responsible, knowledgeable, and friendly "crew" to be critical to its success. Therefore they nurture their employees with a promote-from within philosophy. Each employee is encouraged to taste and learn about the products and to engage customers to share what they've experienced. Most shoppers recall instances when helpful crew members took the time to locate or recommend particular items. Says one employee, "Our customers don't just come here to buy a loaf of bread. They can do that anywhere. They come to try new things. They come to see a friendly face. They come because they know our names and we know theirs. But most of all, they come because we can tell them why not all Alaskan salmon has to come from Alaska or the difference between a Shiraz and a Syrah. The flow of ideas and information at the store level is always invigorating." When it comes to showing its appreciation for its employees, Trader Joe's puts its money where its mouth is. Those who work for Trader Joe's earn considerably more than their counterparts at other chain grocers. Starting benefits include medical, dental, and vision insurance, company-paid retirement, paid vacation, and a 10% employee discount. Being a privately owned company and a little media shy, Trader Joe's has been keeping some of its financial information confidential these days, but would say that managers make in the neighborhood of $100K per year. Outlet managers are highly compensated, substantially more so than at other retailers, partly because they know the Trader Joe's system inside and out (managers are hired only from within the company). Future leaders enroll in training programs such as Trader Joe's University that foster in them the loyalty necessary to run stores according to both company and customer expectations, teaching managers to imbue their part-timers with the customer focused attitude shoppers have come to expect. So it came as a horrifying surprise to many of those shoppers that Trader Joe's had a new nickname: "Traitor Joe's." The usually environmentally friendly company fared the worst of the national chains on Greenpeace's recently released seafood sustainability scorecard. Greenpeace's study, Carting Away the Oceans: How Grocery Stores are Emptying the Seas, ranked 20 supermarket companies by assessing their seafood policies and checked to see whether they sold fish off the red list-fish that are over fished and need to be conserved in order to survive. Greenpeace surveys found Trader Joe's sells 15 of the 22 red list seafoods: Alaskan pollock, Atlantic cod, Atlantic salmon, Atlantic sea scallops, Chilean sea bass, Greenland halibut, monkfish, ocean quahog, orange roughy, red snapper, redfish, South Atlantic albacore tuna, swordfish, tropical shrimp, and yellowfin tuna. Customers who trust Trader Joe's to offer the most nutritious, sustainable, organic foods felt deceived. Trader Joe's was quick to respond and post this to the action alerts on their Web site: "We listen to our customers. Hearing recent feedback, our goal is to offer seafood options that fit customer needs ranging from food safety and taste, to concern over the environment." Now let's see if the company puts those words into action. As consumers are increasingly mindful of how and where each dollar is spent, Trader Joe's simply can't afford not to.
Discussion Questions 1. How does Trader Joe's design jobs for increased job satisfaction and higher performance? What are some of the factors that influence the relationship between job satisfaction and performance?
Why might some workers not find satisfaction working at Trader Joe's?
Please find at least one refernece to suppport your views.
Relevant WebLinks Fostering a Loyal Workforce at Trader Joe's Why Trader Joe's Stands Out From the Rest of the Grocery Business