this is a grocery store but not just any grocery store it is the wildly popular Trader Joe's and if you've been on Tik Tok or walking in the city streets or in your friend's kitchen you've probably noticed that Trader Joe's is everywhere but what makes Trader Joe's so special how does it maintain affordable prices and Garner a cult-like following I dug into it and in this video I'm going to tell you what makes the Trader Joe's experience so unique how their store economics and product offer Rings keeps consumers coming back time and time again and why it's winning over jenzy Shoppers while other Grocers struggle to do so this is how Trader Joe's became America's most cultish beloved grocery [Music] store okay starting with the Trader Joe's experience I recognize that a lot of y'all have not been since it is only present in the contiguous us so let me paint the picture for you though no two Trader Joe's are exactly the same each location is consistent with a few key things a very friendly staff in Hawaiian shirts handdrawn signs with a quirky font and fun slogans and a unique selection of creative private label items at competitive prices starting with the friendly staff I just talked to six different Trader Joe's employees inside each one of them nicer than the last summary points were that Trader Joe's is extremely picky in attiring process to choose folks who are exceptionally nice and have a customer first attitude one woman even said that kindness is free so if a customer ask them if they have any peanut butter retzel in the back because they've run out on shelves she'll happily just go check and that will make the customer happy everyone will be kind to each other and it just creates a positive feedback loop another man who's been with Trader Joe's for 17 years and who has done a lot of the hiring himself said that Trader Joe's treats his employees well and if you have happy employees you're a lot more likely to have happy customers and finally a lot of them said that the staff all just gets along with each other really well which creates for a more fun than usual work environment now let's look at the Fun branding so while the fun hand lettering catches your eye at every single location the fun part is that no two locations are exactly the same each location is outfitted with local art that you might find from this particular neighborhood so right now we're in the East Village Manhattan New York City location and look at this there is this map when you first walk in the store of all these little landmarks in East Village specifically they got a local illustrator Peter arle who's lived in East Village since 2002 pick and choose all these things in the neighborhood that caught his eye and then they have the corresponding numbers of the things in East Village Illustrated all throughout the store and these are the little things that you know the average person might not be looking out for when they go to their grocery store but pretty much every Trader Joe's that I know has something special like this that makes it really feel like a Neighborhood Grocery Store the attention to detail and customization of each location makes you feel like you're visiting a local Neighborhood Grocery Store not a national chain in fact Trader Joe's about us page on their website open with Trader Joe's is a national chain of Neighborhood Grocery Stores and that's exactly what you feel and finally the Crown Jewel of the Trader Joe's experience all the weird that they sell and not just weird but seasonal weird you see Trader Joe's is especially known for their seasonal products right now it's the Super Bowl and Valentine's Day more recently it was Christmas items and it's fall products specifically based off my personal experience it is especially known for pumpkins everywhere but truly in addition to regular normal staple items their funky creative product offering is something that gets people talking and makes them feel like they're discovering fun new products every time they visit Trader Joe's cookies and cream pretzel Slims hold the cone mini ice cream cones unsweetened almond cashew and macadamia nut beverage this is literally what I use in my smoothies dried baby bananas soft baked sunflower butter cookies with roasted sunflower seeds do I need this no do I want it and they managed to sell these staples and strange items at competitive prices I'm also not vegan or vegetarian but when I was doing my research for this video I was going on subreddits and apparently Trader Joe's really really shines in the vegan and vegetarian sections so pretty cool now Trader Joe's is famous for these funky items but they're almost as famous for discontinuing them and I have fallen victim you see I got addicted to their Aussie style cookies a couple years ago which is their version of the popular Australian chocolate biscuit Tims and all of a sudden one day I go to Trader Joe's to reup on 50 packs of their chocolate biscuits poof nowhere to be seen you don't think it'll happen to you and then it does and these days I try not to get addicted to things like chocolate biscuits but my point is Trader Joe's isn't just being cruel it is all part of their business strategy their limited selection their small stores their private label and yes even their discontinued products let's dive into it so let's talk Trader Joe's store economics because the Hawaiian shirts and groovy signage is all fun in games until you realize that the gross revenue per square foot of Trader Joe's is over double that of its competitors and sure there stores are smaller but they also carry significantly fewer products in their competitors and it is all by Design you see Trader Joe's deliberately maintains small storefronts at about 12,000 ft on average compared to traditional Grocers at 45,000 ft these small stores even though they can feel really tight and annoying as a shopper not right now cuz I came right at opening to film this with these smaller storefronts helps Trader Joe's enter denser urban areas with a lot of foot traffic that larger Grocers cannot access exhibit a even though there are only 608 Trader Joe's locations a whopping 11 of them are within a 3M radius of where I live which happens to be the most dense Urban population in the entire country and I like having 11 to choose from I'm not going to lie in conjunction with targeting urban areas Trader Joe's also deliberately targets yuppies young professionals with high paying jobs and this has been the case since day one day one being 1967 when they opened the first store in Pasadena California 20 M from where I grew up by the way when the founder Joe col col col when he noted a rise in the number of college educated people in the US partly due to the GI bill at the time which helped to subsidize world or two veterans education and other benefits the build did have its problems but that's a very different video but back to their products the most fun part and a huge component of what contributes to Trader Joe's cult-like following so Trader Joe's only carries 4,000 products while typical Grocers will usually carry 30,000 or more one of the main famous reasons that Trader Joe's doesn't stock as many products is because it eliminates the Paradox of choice which is when when we're presented with too many options we get lost in analysis paralysis and don't end up choosing anything there's a famous study that I first learned about in college in one of my behavioral economics classes where for the Shoppers who were offered 24 different kinds of jams 3% of those Shoppers bought a jam for the Shoppers who were offered only six kinds of jam 30% of the Shoppers bought one studies show that The Sweet Spot is between three and seven options so you still get a sense of variety without overwhelming the brain and this is exactly what Trader Joe's does see you don't have 30 different kinds of granola here like you do in most supermarkets I count 1 2 3 4 5 6 7 and this one is already off the shelves and it's early in the morning more on that in a little bit now other smaller selection of 4,000 products you might notice that almost all of them seem to be private label Trader Joe's brand 80% in fact are private label I've been looking around the store to try and find the 20% of the products that are not private label and a lot of it seems to be in the drinks sections obviously not private label not private label one of their te's Yogi tea the rest are private label here's a random one Lumberg rice cakes that must be a very popular type of rice cake for them to carry that wow okay after really looking around for non-private label stuff I would say aside from this beverage category it's higher than 80% private label and this brings us to a big reason why tjs is able to maintain affordable prices private label items helps tjs have more control over their own supply chain they buy directly from producers and manufacturers when they can instead of going through a middleman that eats into the profits and this helps Trader Joe's significantly reduce costs it also gives them more autonomy to make weird and to be more Nimble in their product offerings like offering seasonal items Trader Joe's creates a sense of fomo fear of missing out if you don't get to the store in the next month to check out their fall whatever then you'll miss out because it'll be gone and remember my chocolate biscuits that disappeared all part of their strategy kind of you see normal grocery stores are often paid what are called slotting fees by the manufacturers that they work with meaning the producer of those products will pay the grocer a fee just to keep their products on the Shelf whether or not they sell which helps financially drisk things a bit for the grocer since Trader Joe's is mainly private label they have to be absolutely ruthless with the discontinuing products that don't sell well enough so they can make space on these limited shelves for items that do and in turn this natural selection method helps Trader maintain a well-curated selection of high quality items at all times now before discussing why Trader Joe's is winning over the Gen Z consumer segment while other Grocers struggle to do so a quick peek into Trader Joe's most popular items so Trader Joe's has the funniest website of all time I don't know why I'm not surprised but I'm not don't be fooled you certainly cannot shop or order online no that would be so on Trader Joe but they have a newsletter called The Fearless flyer and some fun posts that I spent way too long poking through just now their annual customer Choice Awards just came out this year's overall pick was chili and lime flavored rolled corn tortia chips funny enough I see these everywhere but I've never actually tried them I assume they're good and then I found this breaking news story their product Hall of Fame for items that have won many times I cannot make this up whoever runs this website needs a raise so why is Trader Joe's winning over the Gen Z segment well Trader Joe's targeting of yuppies in urban areas and near universities plus that treasure hunt shopping experience makes for really great Tik Tok content my research did show that Trader Joe's is certainly not the most sustainable grocery store which is not very jenzy of them but just about everything else the must try products the social media appeal the quirky branding and the affordable luxury positioning the Trader Joe's offering aligns with Jen's preferences in a way that other Grocers have not been able to replicate now the very things that creates this cult following also creates Trader Joe's biggest challenges the small storefronts though intentional do create store capacity issues the New York City locations specifically the ones that I have the most experience with a lot of the times of the day the line is wrapping around the whole entire store and even though the line moves very very fast it is still not the most relaxing experience to have to push my cart between a lot of customers most of the times that I come in fact I have a friend who deliberately temporarily switched from Trader Joe's to Whole Foods for a more relaxing experience because they have bigger aisles and just it's less congested again I'm here at 8:00 a.m. so right now it looks empty it's not empty I'm filming among a lot of people and it's kind of awkward but usually it's more busy not only do they have physical space capacity constraints but also inventory capacity constraints it happens a lot where I'll go shopping at Trader Joe's during peak hours so at the end of the day when people just get off work and they'll be out of my cottage cheese or my Greek yogurt or vanilla almond granola cereal which I also buy finally even though Trader Joe's limited selection and private label items is a big part of what makes them popular it also lends itself to supply chain vulnerabilities they're dependent on a few specific manufacturers at least in the short term while other Grocers usually work with many different manufacturers and sell a bunch of versions of the same item so Trader Joe's can't easily switch between multiple suppliers and this happened during Co tjs had more significant shortages than other grocery stores and more recently they've had shortages with their Frozen Food suppliers so crowd favorites like the cauliflower and Yoki have been intermittently off shelves although here it is right now fully stocked so that's good despite these challenges the Trader Joe's business model is one that so many businesses look to as a blueprint of success and it shows Trader Joe's consistently ranks at the very top of customer satisfaction reports for grocery stores in the US and its unique product strategy quirky branding and warm welcoming Hawaiian shirt Cloud staff are things that other Grocers have tried their own version of with limited success so I think it's safe to say that no long line or tight aisle not even missing chocolate biscuits will keep me or millions of other people from giving Trader Joe's it's cult-like following leave a comment what business you want me to analyze next I've thought I would start with my favorite one if you enjoyed this please hit the Thumbs Up And subscribe for more videos like this one and until next time turtle out after years of Heartache pain I stopped looking cuz they were discontinued I swear what a great end to this video that's four nanners for under a dollar they called them nanners good