A viral TikTok post created by TikTok content creator Nicole Urban (@urbannic) reveals how grocery store chain Trader Joe’s tricks its customers into shopping more.
The researcher covers the company’s business model and lists various aspects of the store that make it a more pleasant shopping experience, from the enthusiastic and well-informed Trader Joe’s employees, to the structure of the market and parking lot, to the artistic price tags.
In her video, which is a follow up to another post about the psychology behind grocery store layouts, Nicole shares a detailed segment on the customer and business relationship model used by Trader Joe’s.
The clip has grossed over 4.6 million views and 626,000 likes as of this publication.
“A lot of you all were interested in a part two, so here are psychological tricks that Trader Joe’s uses to get you to spend more money,” says Nicole.
Nicole uses data from other researchers and interviews from the company’s lead directors to explain that “Trader Joe’s rejects a lot of core business practices of average grocery stores.”
But despite not following the norm when it comes to its business practices, in 2022, the company’s “peak revenue was $13.3 billion,” says the TikToker.
She goes on to point out some of the differences, stating that Trader Joe’s offers about a tenth of the items compared to average grocery stores, and that 86% of their products are Trader Joe’s brand products.
Nicole says that despite their success, Trader Joe’s does not offer gift cards, coupons, or run any major ads or sales. The chain also does not offer online delivery service through major grocery apps like Instacart.
@urbannic Replying to @eleni ♬ original sound – nicole urban
So how does the company turn a profit? Nicole says the supermarket’s success comes from it’s business model, which is “based around heavily investing in customer experience.”
To achieve this, the company uses various tactics. “Trader Joe’s employees are usually very charismatic,” and Nicole claims this is on purpose. The store also invests in the artistic design of the store to make customers feel as though they’re shopping at “some kind of local market.” But most importantly, Nicole says, the supermarket chain eliminates the ‘Paradox of Choice.’”
The “Paradox of Choice” is a book by American psychologist Barry Schwartz, first published in 2004. “To summarize: having too many options is not always a good thing,” Nicole explains. “To customers, having more choice is often paralyzing rather than liberating.”
“When confronted with too many product options,” she adds, “[customers] may get overwhelmed and experience choice overload,” leading to brain fatigue during the decision-making process.
Trader Joe’s eliminates this by limiting the number of items and the number of brands available to customers.
In addition, the store makes it easier for customers to browse through items by removing freezer doors and other physical barriers found in most other supermarkets.
“So, that is my breakdown of the psychology of Trader Joe’s,” Nicole concludes.
Many viewers agreed that shopping at Trader Joe’s has made their shopping experience more enjoyable and cost-effective, and they shared their thoughts about the supermarket in the comments of the video.
“Psychology or not, shopping at Trader Joe’s has brought my grocery bills down by $100 a month,” wrote one viewer.
“Their stuff is consistently good, if they have a new item I’m gonna assume it will be good,” said another.
But others still had some critiques to offer the store.
“Wish they would choose to focus on the customer experience by picking better parking lots,” commented one viewer.
“This video really had me thinking about how I never realized TJS doesn’t do coupons,” noted another.
“I didn’t realize until I did research for this video!” replied TikTok creator Nicole.
But regardless of tactics Trader Joe’s uses, it has proven that all customers want is good service with quality products.
As one enthusiastic user wrote, “I don’t even live in the USA and I wanna shop at trader joe’s.”
The Daily Dot reached out to Nicole via TikTok comment and Trader Joe’s via email for further information.
