“Wow Items”

August 23rd, 2010

Trader Joes has a very different strategy than most grocery stores:

Trader Joe’s organic creamy unsalted peanut butter will be more satisfying if there are only nine other peanut butters a shopper might have purchased instead of 39. Having a wide selection may help get customers in the store, but it won’t increase the chances they’ll buy. (It also explains why so often people are on their cellphones at the supermarket asking their significant other which detergent to get.) “It takes them out of the purchasing process and puts them into a decision-making process,” explains Stew Leonard Jr., CEO of grocer Stew Leonard’s, which also subscribes to the “less is more” mantra.

Customers accept that Trader Joe’s has only two kinds of pudding or one kind of polenta because they trust that those few items will be very good. “If they’re going to get behind only one jar of Greek olives, then they’re sure as heck going to make sure it’s the most fabulous jar of Greek olives they can find for the price,” explains one former employee.

That’s a powerful strategy in any business: compete on your selections, not your selection.