Trader Joe's has a cult-like following. That's great for the brand's bottom line, but it also creates some heavy lifting for the company.
When people emotionally invest in a brand, the company must be incredibly careful to nurture and protect those connections. And when those fans don't get what they expect, the damage to the brand can be more severe than it would be for a corporate name that lacks this kind of loyalty.
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That happened to Target (TGT) -) in the days before Brian Cornell took over as chief executive. The retailer had lost some of its "Tar-Jay" magic and was no longer a destination for customers. Building that back was a massive challenge, which Cornell managed to pull off.
Similarly, Trader Joe's Chairman and CEO Bryan Palbaum and Vice CEO Jon Basalone are very aware of how easily the company can damage its relationship with its customers.
They also know that part of the reason people love their brand lies in how it differs from Target, Walmart (WMT) -), and their neighborhood regional grocery chain.
Both men showed that they would be very careful when considering any operational changes at Trader Joe's, even as their rivals all embrace money-saving technology.
Trader Joe's is built on people
Walmart and Target have both embraced self-checkout. At a time when the labor market is tight and wages have been rising, not having people operate a cash register saves money on labor (although it may lead to more theft)
Amazon (AMZN) -), which owns Whole Foods, has taken things a step further at its Go convenience stores by offering its Just Walk Out technology. That service eliminates any sort of checkout, and Amazon has licensed it to other retailers for use in high-traffic locations like airports and sports venues.
In a broad sense, grocery chains and food retailers seem to want to make cashiers a thing of the past. That's a move Trader Joe's doesn't plan to follow, according to its leadership team, who spoke on an Aug. 14 edition of the "Inside Trader Joe’s" podcast.
Basalone, who is also the chain's president, called the rumor that the chain was considering self-checkout as "false as false can be."
The company has two big reasons that it's not going to eliminate its cashiers.
"We believe in people and we’re not trying to get rid of our crew members for efficiency sake or whatever the -- I don’t know what the reasons are people put self-checkout in," Basalone said.
Palbaum also noted that self-checkouts are "not fun."
"I have fun bagging groceries and working at the register. Self-checkout is work," he added. "I don’t want that."
Self-checkout is becoming more popular
Trader Joe's isn't just a place where people get groceries; it's also a brand experience. That may not be as important to other retailers as it is to TJ's.
Kroger (KR) -), for example, recently converted one of its stores into an only-self-checkout location and plans to soon convert another.
“These allow our customers to scan and bag their own items,” Lauren Bell, corporate affairs manager for Kroger’s Nashville division, told WKRN. “It’s a fast, friendly experience."
Customers may differ about that. Many see self-checkout as added work that the store puts on them without lowering prices. In reality, consumers have pretty mixed feelings about self-checkout, according to the 2021 State of Self-Checkout Experiences survey:
- Self-service checkouts have failed for many consumers. 67% have had one fail when using it.
- Bad experiences are why consumers choose not to use self-service checkouts. 25% said they would choose not to because they’ve had bad experiences while 21% said in the past they were slower.
- Most believe self-service checkouts are faster than waiting in line. 85% believe strongly that they are typically faster.
Those numbers -- really all numbers around the service -- are likely to improve as the technology behind self-checkout gets better.
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