Music/Events/Other

And The Winner Is…Trader Joe’s!

Posted on January 30th, 2019 · Music/Events/Other

* And The Winner is…Trader Joe’s!

Just read the below press-release.

Something- you guys might want to peruse while in the bathroom.

January 09, 2019 08:00 AM Eastern Standard Time
CHICAGO–(BUSINESS WIRE)–dunnhumby, the global leader in customer data science, today released the second annual dunnhumby Retailer Preference Index (RPI), a comprehensive, nationwide study that examines the $700 billion U.S. Grocery market. The RPI study surveyed 7,000 U.S. households to determine which of the top 56 largest grocery retailers have the strongest combination of financial performance and consumer emotional sentiment. Trader Joe’s was again the top-rated grocery retailer. The grocery retailers with the highest overall consumer preference index scores are: 1) Trader Joe’s, 2) Costco Wholesale, 3) Amazon, 4) H-E-B, 5) Wegmans Food Markets, 6) Market Basket, 7) Sam’s Club, 8) Sprouts Farmers Markets, 9) WinCo Foods, 10) Walmart, 11) Aldi, 12) Peapod, 13) The Fresh Market.

“While consumer confidence in the U.S. is at a near 18 year high and the U.S. economic growth is outpacing the rest of the world, there are signs of turbulent times ahead and grocery retailers need to be prepared,” said Jose Gomes, President of North America for dunnhumby. “Because of pressures that grocery retailers are facing today, a common reaction is to think only of the short term. But by focusing on the customer preference levers that we have identified in this RPI to inform their strategies, retailers can buy an insurance policy for the future to ensure they can weather the storms ahead.”

The overall RPI ranking evaluates retailer performance on seven pillars: price, quality, digital, operations, convenience, discounts/rewards and speed. The retailers who focus their business on superior value perception – defined by the strongest combination of price and quality – tend to have the most financial success and the strongest emotional bond with consumers.

Key findings from the study:

Understand customer needs and be excellent at what matters most to win their preference. Trader Joe’s is a prime example of a retailer making trade-offs to deliver superior Value, and it has earned them the top spot for two years in a row. With its small format, lack of digital shopping and limited national brand offering, the retailer focuses on speed of in-store shopping and having a rich Private Brand offering. This bricks-and-mortar only, private brand approach minimizes costs and keep prices low, allowing them to reinvest in customer service, product quality and in-store experience. This strategy sacrifices reaching customers through a growing digital channel and breadth of assortment, and therefore losing on one-stop shop-ability and convenience. However, this loss is also their gain since it allows them to deliver what matters most to their customers.
Two needs rise above all others for most food retailers and have the greatest weight in determining RPI ranking, forming the core of value perception: Price and Quality. Retailers that rank in the first quartile overall excel in value perception and, as a result, have sales growth that is 2x greater than retailers in the second quartile and 9x greater than retailers in the bottom two quartiles. The other customer needs, like digital, speed, convenience or discounts/rewards, while still important, have a weaker association with retailer preference.
First quartile retailers are mostly non-traditional grocers, who have developed a highly targeted offering designed to maximize value perception for their specific customer base. More traditional, regional grocery banners with a long history are hurting because of it, having relatively poorer performing financials and/or emotional bonds. The reason: these traditional banners have inferior price perception and/or quality. The RPI’s top three overall retailers excel in these two factors (Amazon in price; Trader Joe’s and Costco on both).
For some traditional, regional grocers, discounts/rewards and promotions are contributing to sales growth, but for many, this is adding to financial difficulty. In the U.S., hundreds of millions of dollars are spent on discounts, rewards and promotions every year, but over two-thirds of promotions don’t break even. To maximize the success of a discounts/rewards program, retailers need to have at least average price perception and a highly relevant assortment, supported by a strong private brand.
Private brand is a common key to driving value perception and improving customer preference for retailers up and down the rankings. Six of the top 10 private brand performers are in the first quartile of the RPI overall. Additionally, many of the most successful traditional, regional grocers occupy the second quartile, and they complement a highly relevant assortment with a strong private brand, allowing them to maintain solid price perception. Lastly, private brand is a key element in driving both price and quality perception and thus overall value perception, where retailers in the bottom two quartiles are struggling the most.
Retailers who tended to see improvements in their digital rank also tended to see slips in their operations (i.e. out of stocks, pricing consistency, clean stores, right product variety). Retailers that ramp up investment in digital must be cautious not to take their eye off the retail basics.
Some retailers have achieved an excellent digital customer experience, but their financial performance has not benefited, while others with a focus on digital manage to thrive. Retailers missing any of the following are not maximizing the impact of digital investment: large scale, great price perception and a category DNA leaning toward center store items and non-grocery products.
The latest dunnhumby RPI is available for download today at: http://bit.ly/2C5LMqq. Retailers included in the RPI that are interested in receiving their individual banner profiles can visit dunnhumby’s booth (#2073) at NRF 2019 or contact us at https://www.dunnhumby.com/unitedstates.

About dunnhumby

dunnhumby is the global leader in Customer Data Science, empowering businesses everywhere to compete and thrive in the modern data-driven economy. We always put the Customer First.

Our mission: to enable businesses to grow and reimagine themselves by becoming advocates and champions for their Customers. With deep heritage and expertise in retail – one of the world’s most competitive markets, with a deluge of multi-dimensional data – dunnhumby today enables businesses all over the world, across industries, to be Customer First.

The dunnhumby Customer Data Science Platform is our unique mix of technology, software and consulting, enabling businesses to increase revenue and profits by delivering exceptional experiences for their Customers – in-store, offline and online. dunnhumby employs over 2,500 experts in offices throughout Europe, Asia, Africa, and the Americas working for transformative, iconic brands such as Tesco, Coca-Cola, Meijer, Procter & Gamble, L’Oréal.

Contacts
Media Contact for dunnhumby
Theresa Smith
Silicon Valley Story Lab
theresa@siliconvalleystorylab.com
+1-818-681-6456

8 Comments to “And The Winner Is…Trader Joe’s!”

  1. Kim G says...

    Jeff,
    My husband and I recently moved to an apartment building in Boca Raton. In the complex is a Fresh Market. We had never shopped in a Fresh Market before and I have to tell you that the store is absolutely terrific. Very upscale but it has very reasonable prices.

  2. Sharon Klein says...

    Interesting results.
    I love shopping in Trader Joe’s and in Costco. Both companies do a great job in presenting their products.

  3. Jane Kimmel says...

    Trader Joe’s is a fun place to shop. Terrific items and you can’t beat their prices.

  4. Give me Trader Joe’s, Costco and Walmart and I really don’t need to grocery shop anywhere else. I’ll bet that these 3 are putting a major hurt on Publix which is much more expensive for the same or similar items.

  5. Bosch The Clown says...

    Shopping at Trader Joe’s is like going to an adult amusement park. Terrific different products that others don’t have. Costco hot dog with a soda is a great item and you can’t beat its roast chicken.

  6. They definitely got it right.
    Trader Joe’s #1, Costco #2.
    I love both stores.

  7. Freddie Morgan says...

    Right here in Boca Delray Beach my grocery shopping is Walmart, Trader Joe’s and Costco. I use to be in Publix all the time, but I found that these 3 stores get the job done better selection and price wise. I’m also a gigantic Boys Market customer but that’s a one of a kind operation.

  8. I love Fresh Market. Much better than Whole Foods.

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