Why Taking a Page From the Trader Joe’s Playbook Might Be a Key to Our Success
What is the paradox of choice?
It’s when you’re presented with too many choices or options, resulting in decision-making paralysis and anxiety, according to Barry Schwartz, the Dorwin Cartwright Professor of Social Theory and Social Action at Swarthmore College.
For example, the scope of options for something as specific as pasta sauce can be daunting to a grocery shopper. There’s a sauce for every palate, but when faced with every option at once, the decision can be paralyzing. The simple question, “Which pasta sauce is the right one for me?” becomes a source of stress.
In the hearing care space, a vast lineup of technology options is offered by an array of manufacturers. Faced with choosing among numerous devices that seem to be exactly the same, the patient might have no idea where to begin, save for advice from their audiologist. Further compounding the issue — especially for our Members — patients have to decide which is more trustworthy: the practice brand or the hearing aid brand.
Trader Joe’s offers an example of how to tackle this problem: Almost all the packaging in the store has only Trader Joe’s branding on it. Customers don’t have to choose between Tostitos and Mission — if you walk into one of Trader Joe’s stores, you’ve already made your brand decision. Trader Joe’s, in effect, eliminated brand-based decision-making paralysis for their customers. Instead of 44 pasta sauce options, their average store might only offer 8 or 10. With fewer products, their stores are much smaller than your typical Fred Meyer or Safeway.
Our Member practices can hurdle the paradox of choice in the same way by offering primarily AGX® Hearing technology. Similar to Trader Joe’s, we don’t manufacture our own products. Our suppliers manufacture and sell some of their product under their own brand, but they also allow us to sell that same product at our Member practices under the AGX brand. Member practices can eliminate the decision-making paralysis by offering predominantly AGX3, 5, 7, or 9 devices. Furthermore, by selling AGX technology only at Member practices, the practice brand and the technology brand become linked in the patient’s mind.
Offering fewer choices might seem like a bad idea, because every other grocery store focuses on the options game. But Trader Joe’s pulled in $13 billion in 2017 with this model. According to Packed Facts, a market research publisher in the food space, Trader Joe’s draws 10.5% of U.S. adults as customers, whereas Whole Foods draws only 6.5%. And Kroger, one of the largest grocery conglomerates in the U.S., has a 10-year compound annual customer-base growth rate of just 0.2%, whereas that of Trader Joe’s is 5.9%.
Our practices are in a different industry and focus on premium price points, whereas Trader Joe’s is cheap and accessible. But by looking at opportunities to build similarities, we can hope to find similar success.