The Reason There Isn't A Trader Joe's Loyalty Program
People use a myriad of factors to determine which grocery store to shop at. As Chain Store Age points out, the top two are overall cost and proximity, followed by product selection, online reviews by other consumers, and brand loyalty. That means that most people likely aren't wowed by their chosen grocer, but that it meets their criteria without an undue pinch to the pocketbook or time commitment related to travel.
Brand loyalty came in fifth in CSA's poll with only 34% of respondents putting it top of mind when selecting a grocery store. But for some grocery stores, it is a major factor behind their entire business model, from design and aesthetics to how they stock their shelves.
Trader Joe's has great brand loyalty. In a recent study of Brand Intimacy performed by MBLM, which looked at the personal relationship consumers have with retail stores, the chain got the highest marks, outpacing industry titans like Costco, H&M, and even Amazon. That's made even more impressive by the fact that, unlike its competitors, Trader Joe's doesn't offer traditional sales or coupons — though shoppers can redeem manufacturer's coupons in its stores.
When it comes to discounts and deals, Trader Joe's again is markedly different from competitors in that it doesn't offer a loyalty program, and it seems one isn't likely on the horizon.
The value of loyalty
Grocery store loyalty programs can take many forms, but typically they ask for some amount of customer information, track purchases, and, in return, provide savings on selected merchandise, explains Local Express. This can be huge for retailers as loyalty program members spend 18% more than other shoppers.
So, it might seem odd that Trader Joe's wouldn't follow industry norms and offer a loyalty program, especially given how well the brand is perceived on a brand intimacy index. On the store's podcast "Inside Trader Joe's," VP of Marketing Matt Sloan and Marketing Director Tara Miller dug into the reasoning behind the decision, with both exploring the realities of how loyalty programs work behind the scenes.
It boils down to discounts that manufacturers offer stores to pass on to their customers, which, to Miller and Sloan, drags customers around a store chasing elusive values. Trader Joe's on the other hand opts for a more transparent approach.
"And when you shop at Trader Joe's, you know what the prices are gonna be, we don't change our prices unless our costs change," Miller says. "Every customer who walks into the store has access to the same values on every product. We're loyal to all of our customers."
When asked by Frozen & Refrigerated Buyer Magazine about Trader Joe's lack of a loyalty program, industry experts were of the opinion that the store's value proposition and unique positioning were strong enough to render the need for one moot compared to competitors.