Sneaky Ways Trader Joe's Gets You To Spend Money

Trader Joe's has developed a cult-like following over the years. Trader Joe's made $13.3 Billion in 2017. Trader Joe's is America's favorite, but have you ever wondered why it's so easy to spend money at Trader Joe's? The answer goes a bit deeper than you would think.

Following is a transcript of the video:

Narrator: Okay, so imagine yourself at the grocery store. You're hungry but you don't really feel like cooking. I guess pasta's pretty easy. Suddenly you're faced with this. That’s so many choices. Do you go for the classic tomato basil? How 'bout creamy Alfredo? But what exactly is the difference between these two or these three? Wait. Why is this so hard? Trader Joe's is the surfy, laid back grocery chain know for it's cheap prices and floral print clad staff. Data science professionals have ranked it number one in customer preference for two years running. The brand has held off on going high tech. They keep it simple with no online store, no loyalty programs, and no sales. When you break it down to square footage, Trader Joe's is actually selling more than double its competitors like Whole Foods. But how much money you spend at Trade Joe's ultimately comes down to what you are choosing to buy. But what about Trader Joe's makes it so easy to choose?

Barry Schwartz: I spent, I've spent the last 25 years studying how people make decisions.

Narrator: That's Barry Schwartz, a psychologist, a professor, and a Trader Joe's enthusiast himself.

Schwartz: I think Trader Joe's is the best example of how the world should be constructed.

Narrator: Whoa, take it easy there Barry. Barry coined the term the paradox of choice and quite literally wrote the book on it and it basically describes how you would think that the more--

Schwartz: Choice we have, the better off we are. That turns out empirically not to be true. When you give people too many options, they get paralyzed instead of liberated.

Narrator: The store has always focused on a unique selection of products rather than a large amount of them. I wanted to find out if there was choice-limiting going on at Trader Joe's. So I went to my local market to count some things. I counted 144 pasta sauces, 44 olive oils, and 172 cereals. That's a lot of choices. So then I went to Trader Joe's. And they had an approachable 14 pasta sauces to choose from. Same goes for olive oils, canned beans, and cereals. At Trader Joe's, there's simply less to choose from. So then I asked Barry if he thought Trader Joe's perhaps had inklings of the paradox of choice in mind when designing their shopping experience.

Narrator: Well then what exactly would explain why Trader Joe's practices a scaled down approach to shopping?

Schwartz: They probably did it as a way of controlling costs. Managing inventory, you know, simplifying the supply chain. And somebody thought that if you offered other kinds of value, people would be willing to forgo options. You can't have everything but anything we've got is worth having and we make your life simpler.

Narrator: In fact, when you look at Trader Joe's humble beginnings, the original Joe, Joe Coulombe, founded the business on quality over quantity. Trader Joe's made $13.3 billion in 2017 a number that's likely going up. The core of any business is the customer service which Trader Joe's excels at. The employees, or crew-members as they're called, are all extremely attentive and helpful. In short, they're there to make your life easier. This ideology is embodied in their food as well specifically their frozen food. And Americans have always had a certain affection for a heat-and-serve mentality. Frozen dinners are easy, fast, and little mess. However, about half the time, the frozen section aisle remains pretty empty. According to Phil Lempert, a supermarket analyst, this is due to the frosty barrier of the freezer section. Opening that icy cold door likely means you've already committed to purchasing something which doesn't tend to lead to much product discovery. Compare that to Trader Joe's open freezer bins and you can start to see the difference.

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Sneaky Ways Trader Joe's Gets You To Spend Money

[HululusLabs]

As a kid I had the misconception that Trader Joe’s was expensive because their stuff always seemed higher quality to me. I was surprised when my friend said their stuff is the cheapest. Learned a lot today

[flaminggorilla]

Not only all of this. As a trader joes employee. You should do an epusode on how they treat employees. It is the best company i have worked for. Regular raises based on performance every 6 or so months. Benefits are not too shabby. And they hire people i love working for and with. The job works well with my school schedule. Did i mwntuon they have a scholarship? We have an app we can use to trade and share shifts and ask for time off. I live in an area where a wild fire came through. I know someone who trader joes compensated $10000. And they did the same possibly more for others and did not make a big deal out of it. They did not have any legal reason to do that at all. Its really a good time. It is really that good.

[nofurtherwest]

Lower prices. Better quality. Friendlier staff. Easy returns. No brainer

[gracesquared]

Love Trader Joe’s! My car died in their parking lot and I was stranded for over an hour waiting for my husband to get off work and pick me up. Employees came out to check on me and make sure I felt safe as it was getting dark. We had to work on the car in their lot the whole of the next day. They came out and offered us free food and drinks and even tried to help how they could. Brought out their own tool sets from the store to let us use. I was already a fan of their cheaper healthier options but their customer service 100% won me over.

[BALTHAZAAR]

So, it's not so much "sneaky" as "research-based, good business practice"? Got it.

[houston]

Trader Joe’s is the lo-fi hip hop of grocery stores

[villainova]

I'll tell you how: the stores are on the smaller side so pretty easy to navigate, everything is within arm's reach so feels intimate, the product's themselves are very much quality over quantity and last but not least the prices are very affordable.

[SteezyMcEasy]

I spend less at Trader Joe’s than when I go to any other grocery store but I usually walk away with a lot more!

[MrUkielover]

Trader Joe’s employees looking at my item selection at checkout: “Oh these are great!”

Me thinking: “f*ck yes...I make the best decisions”

[Psche]

There’s a retired man that works part-time at Trader Joe’s near my house. He is the nicest, most pleasant person. He remembers us and always gives my son a lollipop. One day, he learned it was my son’s birthday, he pulled out his billfold, took a Lincoln out folded up an origami ring and gave it to my son. He then said, Don’t go and spend it all in one place, oh wait...maybe one place is the only option these days.” The man is a gem and we look forward to seeing him. Many of the employees there are also super friendly and wonderful people. Look closely at Trader Joe’s ingredients, there isn’t a ton of garbage and chemicals in their foods. The stores are laid out simple and small, you basically get everything you need in one swoop and it’s painless, the lines move quickly.

[cozetteeastman]

I am completely head over heels for my trader joes. Truly love the atmosphere and products from this brand. The BEST grocery store. I always tell people, "it's not a grocery store, it's an experience."

[briantobias]

Great products at a great price always wins

[eugenes]

Supermarkets don't limit choice because the manufacturers are effectively buying shelf space. The more competition on their shelves, the more they can charge for the space. It's a very different business model.

[Larry]

Trader Joes must be REALLY sneaky to get me to spend money, considering I live in another country and they don't operate here.


Very devious.

[rayray]

I thought this video was gonna show shady stuff on
Trader Joe's, was pleasantly surprised it was the opposite coz I love Trader Joe's

[lawrencefaiths]

Next: " Sneaky ways bussines insider gets you watch their videos every time"

[Curt_Randall]

one thing I hate about TJ's is that your favorite go to products tend to randomly disappear for months. you ask the staff what is going on and they have no clue (but with a friendly smile of course). if you wait patiently enough, eventually a product will usually show up again. but the store is generally unreliable if you expect to stock up on your your regular items each visit.

[FirstnameLastname-nngc]

At my Trader Joe’s they had a cat now owl that if you see and tell the cashier where you saw it you can pick some candy from a box,

one time I saw a lady accidentally drop a beer she was looking at and it broke, she said many times she’d pay for it but a employee said we don’t make you pay for stuff like that here.

They also offer sample of food and free small cups of coffe

Best store ever

[blumenseele]

Great video but the mainvoice makes me sleepy

[chipelliott]

Business Insider didn't say anything about the fact that Trader Joes was bought by Aldi Nord in 1979. Aldi does a similar type of marketing of a limited amount of products in their stores. Aldi started in 1946, so this wasn't a new idea that the original Joe was trying out it had already been tested in other markets for many years but his success was noted and he sold out to Aldi after only 12 years in operation. It was Aldi that really grew the company and turned it into what it is today.