Cobbs PGN Trader Joe's Case Competition
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PGN Spring 2016 Case Competition
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Cobbs PGN Trader Joe's Case Competition
- 1. Driving Efficiency and Engagement PGN Spring 2016 Pledge Class Case Competition Sunday, March 27th, 2016 Kevin Clark | Henry Cobbs | Elise Kletz | Maddy To
- 2. Industry Overview Background Weaknesses Recommendation Results + + _ _ Quality Regional grocery chain
- 3. 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
- 4. 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
- 5. 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
- 6. Summary of Recommendations Background Recommendation ResultsWeaknesses Connect with communities served Harness technology to reduce waits Engage and inspire customers Redesign store aesthetic
- 7. Existing Store Aesthetic Background Recommendation ResultsWeaknesses
- 8. • 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
- 9. Background Recommendation ResultsWeaknesses Whimsical Touches • Local children design and paint murals for the store • Creates fun, dynamic space, especially for families and children
- 10. • Stores feel less ”corporate” • Integral aspect of the community • Drives loyalty Background Recommendation ResultsWeaknesses Trader Joe’s Community Hub
- 11. Background Recommendation ResultsWeaknesses Community performance space Community art on display Trader Joe’s Community Hub
- 12. Background Recommendation ResultsWeaknesses Community events bulletin Tables for community dialogue Trader Joe’s Community Hub
- 13. 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 deletedelete
- 14. Recipe Trader by 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
- 15. 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
- 16. Background ResultsWeaknesses Recommendation Financials and Results Costs 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
- 17. Background ResultsWeaknesses Recommendation Financials and Results $10B Annual Sales $12B Annual Sales 10 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
- 18. Appendix Defining Place in Market Interior Redesign Community Hub Snap! Recipe Trader Social Media
Editor's Notes
- value in community
- ESPECIALLY IN URBAN AREAS: COLLEGE STUDENTS AND YOUNG ADULTS WHO CAN’T AFFORD WHOLE FOODS, BUT WANT TO EAT ORGANIC, HIGH QUALITY, LOCAL, INTERESTING FOODS MORE IN SUBURBAN AREAS: FRUGAL SHOPPERS WITH FAMILIES WHO WANT TO PROVIDE HIGH QUALITY FOOD, BUT CANNOT JUSTIFY WHOLE FOODS PRICES EDUCATED INDIVIDUALS WHO VALUE A STORE THAT PAYS EMPLOYEES FAIRLY, SOURCES FOOD FROM ETHICAL SUPPLY CHANNELS, AND DOESN’T SEEM AS “CORPORATE”
- do we still need this slide? ESPECIALLY IN URBAN AREAS: COLLEGE STUDENTS AND YOUNG ADULTS WHO CAN’T AFFORD WHOLE FOODS, BUT WANT TO EAT ORGANIC, HIGH QUALITY, LOCAL, INTERESTING FOODS MORE IN SUBURBAN AREAS: FRUGAL SHOPPERS WITH FAMILIES WHO WANT TO PROVIDE HIGH QUALITY FOOD, BUT CANNOT JUSTIFY WHOLE FOODS PRICES EDUCATED INDIVIDUALS WHO VALUE A STORE THAT PAYS EMPLOYEES FAIRLY, SOURCES FOOD FROM ETHICAL SUPPLY CHANNELS, AND DOESN’T SEEM AS “CORPORATE”
- generic yet organic(ish) lighting --> maybe get some cool light fixtures --> light bulbs in mason jars
- talk about using kids to make the store more unique and stand-out and individual to each community by allowing them to help redesign the interior by painting some of the wooden displays --> kind of like how the employees hand-write the prices by having the community contribute to the design and feel of the store people are more likely to be loyal --> families may be more likely to go because their kids helped to decorate part of the store if the painting is very poor or the store doesn't like it, they can paint over it gives each store a little more individuality and allows the community to feel connected to the store maybe have the liquor area look a little more sophisticated with just wood paneling but have the rest of the store look more 'whimsical'
- talk about using kids to make the store more unique and stand-out and individual to each community by allowing them to help redesign the interior by painting some of the wooden displays --> kind of like how the employees hand-write the prices by having the community contribute to the design and feel of the store people are more likely to be loyal --> families may be more likely to go because their kids helped to decorate part of the store if the painting is very poor or the store doesn't like it, they can paint over it gives each store a little more individuality and allows the community to feel connected to the store maybe have the liquor area look a little more sophisticated with just wood paneling but have the rest of the store look more 'whimsical'
- test in stand-alone stores where there is 'real estate' to do this; if it proves to be a significant driver then consider a shrunken down version for stores located in urban areas and in strip malls
- hit on how this increases value --> trader joe's is all about value --> a penny that Trader Joe's saves is a penny that the customer saves by saving the customers time in the store, especially for a minor purchase, they are placing a high value on the customer's time test in urban stores --> possible in Manhattan where the lines in the store are extremely long and wrap around the store will provide an opportunity to compete with other stores (NYC - Duane Reade) because it makes it easier for customers to quickly make smaller purchases meant to combat the line issue and demonstrate to the community that Trader Joe's is taking their needs into account
- fosters a sense of community once you have the app you can upload your own recipes or download others recipes recipes use Trader Joe's products
- Redesigning store interiors: Assuming 6 basic store sizes and layouts costing $150,000 each to plan for and additional costs of $10000 per store for implementation and modifications for the city, this costs $5.5 million but would increase sales by 15% annually on profit margins around 2% Community hub: Again using musicians and artists willing to perform for free for exposure, costs are a stage and upkeep of art galleries and management, around $5000 per store up front and $1000 per store annually. Profits from increased brand equity, customers staying longer and buying 5% more items in the store