Trader Joe’s has chosen to remain a brick-and-mortar business and has opted out of e-commerce, despite the increasing demand for online shopping and delivery services.
During an episode of its podcast, “Inside Trader Joe’s,” Matt Sloan and Tara Miller, two marketing executives at Trader Joe’s, highlighted the additional costs associated with e-commerce, and why Trader Joe’s believes that many retailers have underestimated the costs involved in providing services, including free shipping—and have framed these changes as disruptive without acknowledging the associated expenses.
“Over time a lot of the entities behind these marketplace changes have framed up those changes as moments of disruption, and the entities themselves as being the disruptors,” said Sloan during the podcast. “And what I think they’ve really upset is people’s understanding that there are actual costs from each of those things, and all of that work combined, meaning that free shipping doesn’t really exist. Tara, you said the store is our brand. Absolutely, and I think what we mean by that is the store is the place obviously where the business happens, our business, and it really happens through three different things: Our customers, our crew, our products. It’s our products in a place peopled with our crew and our customers, those three things have to be equally present.”
Trader Joe’s is also avoiding e-commerce because it’s concerned that it would disrupt the company’s focus on value and compromise the unique in-store shopping experience it has cultivated over the years. They believe that the “treasure hunt” experience that customers enjoy in their physical stores can’t be replicated online and argue that virtual shopping tends to limit exposure to products consumers may not be aware of, resulting in a less exploratory and serendipitous shopping experience. As a Trader Joe’s shopper, I agree. The serendipity of finding a Vietnamese dipping sauce at eye level has made me an impulse-buyer more than I would like to admit.
While many grocers have embraced e-commerce despite its challenges and costs, Trader Joe’s has remained steadfast in its decision to prioritize its in-store model. The company experimented with delivery services in New York City for a decade, but discontinued the service in 2019 and has not expanded to new markets.
While many grocery chains have embraced e-commerce and online grocery sales are projected to grow, Trader Joe’s has made a deliberate choice to prioritize its brick-and-mortar stores and maintain its distinctive shopping experience.
“One of the things that I think makes Trader Joe’s truly unique is that while we are solely a bricks and mortar retailer, we’re not a big box,” said Miller during the podcast. “We very intentionally have smaller footprint stores. It helps us to have a more personal connection with our crew members, with our customers, with the products that we sell. There are always going to be costs associated with running a business, we prefer that those costs be people, we’re familiar with our products, we’re familiar with our neighborhoods, we’re familiar with our customers. That small, more intimate setting really does set us apart from everyone else selling food.”