Narrator: Okay, so imagine yourself at the grocery store.
You're hungry but you don't really feel like cooking.
I guess pasta's pretty easy.
Suddenly you're faced with this.
So many choices.
You go for the classic tomato basil?
How 'bout creamy alfredo?
But what exactly is the difference between these two
or these three?
Wait.
Why is this so hard?
Trader Joe's is the surfy, laid back grocery chain
known for its cheap prices and floral-print-clad staff.
Data science professionals have ranked it number one
in customer preference for two years running.
The brand has held off on going high tech.
They keep it simple with no online store,
no loyalty programs, and no sales.
When you break it down to square footage,
Trader Joe's is actually selling
more than double its competitors like Whole Foods.
But how much money you spend at Trader Joe's
ultimately comes down to what you are choosing to buy.
But what about Trader Joe's makes it so easy to choose?
Barry Schwartz: I spent, I've spent
the last 25 years studying
how people make decisions.
Narrator: That's Barry Schwartz,
a psychologist, a professor,
and a Trader Joe's enthusiast himself.
Schwartz: I think Trader Joe's is the best example
of how the world should be constructed.
Narrator: Whoa, take it easy there Barry.
Barry coined the term the paradox of choice
and quite literally wrote the book on it
and it basically describes
how you would think that the more--
Schwartz: Choice we have, the better off we are.
That turns out empirically not to be true.
When you give people too many options,
they get paralyzed instead of liberated.
Narrator: The store has always focused
on a unique selection of products
rather than a large amount of them.
I wanted to find out if there was choice-limiting going on
at Trader Joe's.
So I went to my local market to count some things.
I counted 144 pasta sauces, 44 olive oils,
and 172 cereals.
That's a lot of choices.
So then I went to Trader Joe's.
And they had an approachable 14 pasta sauces to choose from.
Same goes for olive oils, canned beans, and cereals.
At Trader Joe's, there's simply less to choose from.
So then I asked Barry if he thought Trader Joe's
perhaps had inklings of the paradox of choice in mind
when designing their shopping experience.
Schwartz: I think it's completely inadvertence.
Narrator: Well then what exactly would explain
why Trader Joe's practices
a scaled down approach to shopping?
Schwartz: Probably did it as a way of controlling costs.
Managing inventory, you know, simplifying the supply chain.
And somebody thought that if you offered
other kinds of value, people would be willing
to forgo options.
You can't have everything but anything we've got
is worth having and we make your life simpler.
Narrator: In fact, when you look
at Trader Joe's humble beginnings,
the original Joe, Joe Coulombe,
founded the business on quality over quantity.
Trader Joe's made $13.3 billion in 2017
a number that's likely going up.
The core of any business is the customer service
which Trader Joe's excels at.
The employees, or crewmembers as they're called,
are all extremely attentive and helpful.
In short, they're there to make your life easier.
This ideology is embodied in their food as well
specifically their frozen food.
And Americans have always had a certain affection
for a heat-and-serve mentality.
Frozen dinners are easy, fast, and little mess.
However, about half the time, the frozen section aisle
remains pretty empty.
According to Phil Lempert, a supermarket analyst,
this is due to the frosty barrier of the freezer section.
Opening that icy cold door likely means
you've already committed to purchasing something
which doesn't tend to lead to much product discovery.
Compare that to Trader Joe's open freezer bins
and you can start to see the difference.
There's no glass door and the low level of freezers
bring shoppers physically closer to the products.
It allows the freedom to check out the packaging
more leisurely and without the blast of cold air.
So tons of effort being put forward to get customers
to the product,
the products themselves have to be good, right?
Trader Joe's products are marketed as healthy
and the products aren't the same old things
we usually see in grocery stores.
No Lay's, no Heinz and it's mostly Trader Joe's
own private label.
They buy straight from the supplier
which ultimately cuts costs and leads to cheaper products
on the shelves.
The products themselves are colorful, quirky,
and have a consistent branding.
To find out a little bit more about the effects
of good branding, I called Denise Lee Yohn
who is a--
Denise Lee Yohn: A speaker, writer, and consultant on brand
building and brand leadership.
and brand leadership.
Narrator: She's done her homework when it comes
to Trader Joe's.
And I wanted to know more
about what goes into the packaging design.
Yohn: Okay, so it's usually kind of hand drawn
or it's not looking like it's computer generated, right?
There are usually caricatures
and then there's some descriptive copy.
And all of that I think helps the person,
the shopper,
kind of see how this product fits into their need.
There's an element of discovery,
like finding a new product you didn't know existing.
Narrator: In an interview, the former head
of packaging design at Trader Joe's
said that the hand drawn aesthetic
invokes feelings of the human touch and artisanal quality.
It can be easy to opt for takeout
when thinking about stepping into the grocery store
after a long day.
But the subtle combination of tactics employed
by Trader Joe's makes shopping
a legitimately enjoyable experience.
It gets you excited about something uniquely human,
cooking and eating your food.