Saturday, January 5, 2008

Learning From Trader Joe's: Setting the Bar High For Fresh & Easy

Although Tesco's Fresh & Easy Neighborhood Market store's format stands on its own in our opinion, it does owe much of its inspiration and marketing strategies to Trader Joe's, the quirky, small format specialty grocer that's engendered an extremely loyal consumer following in the U.S.

A look inside a Trader Joe's market located in Hampton Roads Virginia.

Fresh & Easy stores are part small format, limited assortment discount grocery store and part fresh foods and specialty store. Sort of like low-price leader neighborhood grocery store meets Trader Joe's (TJ's), with a few of its own unique twists of course.

For example, the TJ's part is seen in Fresh & Easy's extensive private label grocery and prepared foods lines, its merchandising of fresh produce in plastic containers, it's Trader Joe's-like fresh meat departments, and a few other key areas like its specialty grocery selection.

The stores themselves have a TJ's look to them, both in size and design. Fresh & Easy stores are, like Trader Joe's stores, utilitarian, yet have a slightly upscale look in terms of graphics and colors. The stores also use warehouse-type shelves, similar to the style used in TJ's stores.

A look inside a Fresh & Easy Neighborhood Market in Southern California.

The Fresh & Easy format is set apart from Trader Joe's in that it offers a selection of private label and nationally-branded basic grocery items at discount prices, in addition to its prepared foods and fresh and specialty grocery offerings.

Trader Joe's has established an extremely loyal consumer following in the U.S. In fact, communities and neighborhoods regularly lobby the Southern California-based specialty grocery store chain, which is owned by German retailer ALDI, to locate stores in their cities, towns and neighborhoods.

These loyal shoppers love Trader Joe's format, product selection, wine and beer offerings, and everything else the retailer does and sells. The grocer's quirky, yet high-quality private label specialty, natural and organic grocery products also get rave reviews by the TJ's faithful. In fact, the stores sell few manufacture-branded items--and shoppers could care less.

So loyal to Trader Joe's are some shoppers, like blogger Stacybee who writes for the blog, that they not only write glowingly about the grocer, but even chart the locations of Trader Joe's stores when they take trips, like she recently did, stopping at a number of the stores along the way on her travel route.

In a piece in today's blog called: "Confessions of a Trader Joe's Junkie," Stacybee counts (and documents) the many reasons why she loves TJ's. (Read the full piece here.)

She isn't alone in her love of everything Trader Joe's either. Numerous posters comment on her story on the blog. Each one offers his or her reasons why they're hooked on TJ's.

Blogger Staybee recently moved to a part of the country where there is no Trader Joe's near her, and is having serious withdrawal symptoms, she says. So severe in fact, that when a friend of hers recently made a trip to a city where there is a TJ's, Stacybee made her take a huge ice chest with her so she could stop at the Trader Joe's, load it up with things on Staybee's list, and lug it back home for the TJ's lover.

The consumer loyalty that Trader Joe's has--and it is widespread and real--can't be obtained through mere marketing. It is something that's earned through a combination of store format, creativity, product selection, pricing, merchandising savvy (and marketing), and good timing, along with some good luck and a few other factors.

TJ's sets a high bar for Fresh & Easy in terms of garnering that same loyalty from its customer base. This of course takes time, and Fresh & Easy is brand new. But it also takes constant retail creativity and freshness. That ability to surprise shoppers with your stores, product selections, merchandising and pricing.

Trader Joe's has been able to do that, and thus create a national base of super-loyal customers--and even wannabe customers--throughout the USA.

This is the challenge for Fresh & Easy. To differentiate itself as a retail format. To create a culture that is embraced by both employees and consumers. And to create retail surprise and value daily.

With a popular competitor like Trader Joe's, which is loved by so many, Fresh & Easy has a high bar to reach. However, if the British grocer can reach that bar, its success in the U.S. will be fabulous.

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