After observing that consumers are more likely to try new things when they are on vacation, he turned his store into an “oases” with a marine theme and cheerful employees wearing Hawaiian shirts. Trader Joe’s is differentiated with their innovative, one-of-a-kind foods priced well below their competitors. Trader Joe’s has an obligation to their employees, customers, and the community.
To start off, Trader Joe’s has an obligation to their employees, and employees have certain expectations about their job concerning the job itself, pay, benefits, promotion, co-workers, and supervision. Employees expect, or at least hope for, a pleasant work environment, reasonable compensation, benefits such as insurance, opportunities for advancement, friendly co-workers, and guidance when they need it and respect from their supervisors. Trader Joe’s seems to meet their employee expectations. They are surrounded by an exciting, friendly, fun, and happy environment every day.
They earn significantly more than employees at other grocery chains with managers making at least around $120,000 per year. Their starting benefits include medical, dental, and vision insurance, company-paid retirement, paid vacation, and a 10% employee discount. There are opportunities for advancement as they hire managers only from within the company. They even have their own university, Trader Joe’s University, where their future leaders enroll in training programs to ensure they will be able to meet company and customer expectations. The university also teaches them to instill the Trader Joe’s attitude.
Management spends their days on the floor with their crew and customers instead of in an office with the door closed. Trader Joe’s fulfills their obligations to their employees. Trader Jos’s also has an obligation to their customers, and customers also have certain expectations, such as, reasonable prices, availability of stock, correct information about products, a pleasant shopping environment and experience, and friendly and helpful employees. Customers definitely receive an enjoyable shopping experience from the theme to the employees. They have even come to expect a customer-focused attitude specifically from Trader Joe’s.
Trader Joe’s highlights “soft skills” as much as the actual retail experience. The employees are friendly, are customer involved, and have high product knowledge. The employees taste and learn about the products, share their experiences, and take the time to locate and recommend products. Trader Joe’s also has a philosophy of “every penny we save is a penny you save. ” They focus on natural ingredient, buy directly from suppliers whenever possible, buy in volume, contract early, do not give their suppliers a fee for putting items on the shelf, and drop items that don’t pull weight to keep costs down.
Their CEO does not even have a secretary to cut every possible cost so they can offer lower prices. They limit their stock while selling twice as much as other supermarkets by selling high quality products at lower prices. Trader Joe’s says, “Giving people too much choice can result in paralysis…the more options you offer, the less likely people are to choose any. ” Trader Joe’s then has an obligation to the community, and the community has certain expectations of Trader Joe’s.
They have an obligation to the community to be responsible, abide by rules and regulations, proved accurate information, provide safe products, and respect environmental concerns. They seem to be fulfilling their obligations to the community, but in 2010, Trader Joe’s was found selling 15 out of 22 red-list seafoods, those that are overfished and need to be conserved for their survival. This raised high concerns. They were quick to respond with a promise to remove the red-listed seafood, to improve product labeling with more accurate information about seafood products, and to only offer sustainable seafood in all formats by the end of 2012.
They started using the Seafood Watch list to focus their product development and other third-party, science-based information to help with their goals. They are responding to customer concerns and feedback to fit customer needs of food safety and taste and environmental concerns. Trader Joe’s did break obligations to the community, but they are confronting the situation and responding to concerns to fix the problem. If they keep their promise they can return to fulfilling all their obligations. Any obligation to the community is also an obligation to their customers.
Aside from the seafood situation, Trader Joe’s fulfills their obligations to their customers. If they fix the seafood situation and keep their end of 2012 promise, their customers will probably forgive and trust them. However, they need to make sure they do not pass any of the cost of their obligation to see through on their promise because this could then damage their reputation.