As Amazon expands into the grocery business, we can learn great lessons from the companies which are competing effectively, especially Walmart and Trader Joe's. Walmart's success is mostly about distribution power, but Trader Joe's uses techniques which any retailer can copy.
The Trader Joe's approach to retail:
- Make it personal
- Make it enjoyable
- Make it easy to manage transactions
- Make us feel like we are supporting the community.
Harvard Business Review: What the Grocery Stores Holding their Own Against Amazon are doing Right, 2019-Apr-12 by Amit Sharma
The nature of customer loyalty is changing as shoppers get more comfortable buying groceries online — prioritizing convenience, choice, and ease over physical proximity to a store. As consumers become more sophisticated, retailers need to inspire lasting loyalty across their customer base. To do it, they should offer flexibility, proactively communicate about order status and other details, and build emotional connections with shoppers....
And people are emotionally connected to grocers, as utilitarian as grocery shopping may seem. For example, Trader Joe’s, which ranked highly in the C Space study, inspires loyalty by creating an enjoyable shopping atmosphere. A 2018 Forrester survey of 287 brands rated Trader Joe’s first in positive customer experiences, and the company regularly outranks other grocery chains in sales per square foot. Trader Joe’s fans closely follow new product releases, request stores in their towns, and have even created their own community on Reddit.
Trader Joe’s doesn’t offer grocery delivery, but it has created such a personal and enjoyable shopping experience that customers actually want to visit its stores. Everything at Trader Joe’s is designed to make grocery shopping feel more friendly, personal, and laid-back, including its flexible return policies, free samples, quirky product labels, fast check-out, and helpful employees....
Grocers need to offer their customers more than points-based customer loyalty programs, which are no longer a competitive differentiator. Most grocery chains offer similar benefits and do little to foster an emotional connection between a shopper and a brand. A study by Accenture found that 78% of shoppers abandon loyalty programs after signing up.
By investing in the factors that build long-lasting loyalty instead of transactional programs that most people ignore, grocers can attract repeat buyers and brand advocates.