Driving Efficiency and Engagement

PGN Spring 2016 Pledge Class Case Competition Sunday, March 27th, 2016 Kevin Clark | Henry Cobbs | Elise Kletz | Maddy To

Industry Overview

Background Weaknesses Recommendation Results

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+

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_ Quality

Price

Regional grocery chain

Background Recommendation ResultsWeaknesses

Meet Julie and August• 35 years old• Live in Ballwin, MO• $85,000 combined

annual salary• Want to provide safe,

organic food for their toddler

• Value fair trade and labor

ResultsWeaknesses

Meet Addie• Single, recent college

graduate• Living in Chelsea, NYC• $48,000 annual salary• Loves experimenting in

the kitchen with different cuisines

• Health conscious

Background Recommendation

Trader Joe’s SWOT Analysis

Background Recommendation ResultsWeaknesses

Strengths

Opportunities

Threats

Weaknesses

• Walmart is cheaper and faster• Amazon Fresh is more efficient• Whole Foods is higher quality

• Authenticity and humanity • High quality foods• Use of space • Cult following

• Technology for cheap advances in efficiency

• Leverage public's love for the brand

• Building community value

• Lack of advertising • Dated interiors • Excruciating lines

Summary of Recommendations

Background Recommendation ResultsWeaknesses

Connect with

communities served

Harness technology to reduce

waits

Engage and inspire customers

Redesign store

aesthetic

Existing Store Aesthetic

Background Recommendation ResultsWeaknesses

• Redesign store aesthetic to be more thoughtful and elegant

• Reclaimed wood and shipping containers save money and the environment

• Local artisans craft and donate one-of-a-kind light fixtures and pieces

Background Recommendation ResultsWeaknesses

Local, Sophisticated, and Eco-Friendly

Background Recommendation ResultsWeaknesses

Whimsical Touches• Local children design

and paint murals for the store

• Creates fun, dynamic space, especially for families and children

• Stores feel less ”corporate”

• Integral aspect of the community

• Drives loyalty

Background Recommendation ResultsWeaknesses

Trader Joe’sCommunity Hub

Background Recommendation ResultsWeaknesses

Community performance space Community art on display

Trader Joe’sCommunity Hub

Background Recommendation ResultsWeaknesses

Community events bulletin Tables for community dialogue

Trader Joe’sCommunity Hub

Snap!by Trader Joe’s

Background Recommendation ResultsWeaknesses

No additional cashiers, kiosks, or square footage

Instantaneous checkout

Symbolizes trust and honor

Becomes viable competitor to convenience stores

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Recipe Traderby Trader Joe’s

Background Recommendation ResultsWeaknesses

App adds required ingredients to digital shopping list

Users submit and curate community of recipes

Fosters community and loyalty

Inspires culinary discovery using T.J. products

Harnessing Social Media

Background Recommendation ResultsWeaknesses

Begin official accounts

Beautiful, compelling photography; does not feel like an “ad”

Call to action: captions lead customers to Snap!, Recipe

Trader, and our stores

Inexpensive paid options push content to

more users

Promote seasonal and rare foods we stock

Background ResultsWeaknesses Recommendation

Financials and ResultsCosts for Implementation

Added Value(profit per year) at 2% profit margin

Brand Value Effects

Redesigning Store Interiors (457 Locations)

$5.5 million every 10 years

$2-3 million Gives stores artisanal feel and youthful image

Community Hub (457 Locations)

$2.3 million now, $0.5 million per year

$1 million Neighborhood entertainment place

Snap! $1 million now, $.1 million per year

$1-2 million, increasing over time

Increased convenience and ease-of-use store

Recipe Trader $.25 million now, $50,000 per year

$.2 million, not including brand value

Becomes a crucial part of recipe community

Joining Social Media $.15 million per year $2 million Increases recognition among younger audiences

Background ResultsWeaknesses Recommendation

Financials and Results$10B Annual

Sales$12B Annual

Sales10 Years

Social Media Outreach

• Current fan-made FB page: 185k likes

• Whole Foods/Aldi's: 2M likes, so 1500%+ growth of social media interaction feasible within 2 years

Community and Brand Equity

• Community Hub leads to longer stays and increased loyalty

• Community and artisanal events provide a free and unique entertainment experience, increasing Trader Joe's brand value

Convenience and Design

• Streamlined and more appealing interior emphasizes new product selections, increasing sales in this sector 40%

• Snap! self-checkout app prevents hundreds of customers per day walking out due to lines

Appendix Defining Place in Market

Interior Redesign

Community Hub

Snap! Recipe Trader Social Media