It feels like just about anything can be delivered now. Whipping up dinner and missing a key ingredient? No problem — just press a button on your phone and you'll have fresh groceries on the doorstep within an hour. Can't function without morning coffee? Someone will be right over with your daily pick-me-up.
But one chain has refused to go along despite fierce competition from the likes of Target, Walmart, and Whole Foods: Trader Joe's.
Founded in 1967, the grocery chain has prided itself in catering to a niche market of low-key shoppers who value quality products and reasonable prices above all else. Its farm-to-table appeal and charm includes hand-drawn display boards, bell ringing, and an array of unique snacks and wines.
Investing in people
When asked about why the company hasn't jumped on the ecommerce bandwagon — particularly at the height of the pandemic — Trader Joe's vice president of marketing Matt Sloan said in a podcast in 2020 that it's complicated.
"Our main focus as a company has been doing what's right for our crew members and customers for decades," he said. "Creating an online shopping system for curbside pickup or the infrastructure for delivery, it's a massive undertaking."
"Customers are asking if we're planning on offering delivery or curbside pickup, but it's something that takes months or years to plan, build and implement, and it requires tremendous resources," Tara Miller, marketing director at Trader Joe's, said in the podcast. "Well, at Trader Joe's, the reality is that over the last couple of decades we've invested those resources in our people rather than build an infrastructure that eliminates the need for people."
"The bottom line here is that our people remain our most valued resource. While other retailers were cutting staff and adding things like self-checkout, curbside pickup, and outsourcing delivery options, we were hiring more crew, and we continue to do that," Miller said.
Staying the course
Retail experts agree that Trader Joe’s business model is poorly suited for delivery. But its resistance to evolve could lose shoppers who have grown accustomed to the convenience of online grocery shopping, they warned.
While the company offered delivery services in New York City for a full decade, it pulled the plug on the program in 2019 — citing unsustainable high costs and limited space.
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“Instead of passing along unsustainable cost increases to our customers, removing delivery will allow us to continue offering outstanding values … and to make better use of valuable space in our stores,” a Trader Joe's spokesperson said at the time.
But when the pandemic hit in early 2020 and social distancing became the norm, 20% to 30% of retailers switched gears to prioritize online shopping. By the end of 2020, consumers who were buying their groceries online accounted for 9% to 12% of the total market (a threefold increase from pre-pandemic days), according to consulting firm McKinsey.
It remains to be seen whether online shopping trends continue holding strong as pandemic restrictions fade. But Trader Joe's will keep evolving at its own pace, even if it disappoints some shoppers.
You do you, TJ.
Gallery: Surprising Facts About Trader Joe's
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