USA: How Trader Joe’s Is Embracing Technology, Human Interaction

Discount retail chain Trader Joe’s (owned by German Aldi Nord group), a brand synonymous with friendly human interaction and wildly popular private label available exclusively in-store, technology historically hasn’t been at the forefront of operations. Grocers today are as much in the technology business as they are purveyors of food, beverage and household goods. From Albertsons Cos.’ recent partnership with Google to Kroger’s KroGo smart cart and delivery drone testing to Walmart’s Intelligent Retail Lab, the pulse of grocery is racing in tandem with the latest technology.

Trader Joe’s Chief Information Officer Ron Glickman recently gave listeners to the first episode of "The Breakthrough" podcast a rare look into the Monrovia, Calif.-based grocer’s relationship with technology, as well as how to create powerful breakthroughs in business. With the notion that in the new paradigm, “all companies are becoming technology companies,” Theorem LLC, a software engineering firm, recently launched "The Breakthrough," a technology podcast featuring technology leaders across a variety of industries. The podcast is hosted by Theorem VP of Operations Alison Dean. Network Problems Though the company would begin to scale rapidly, when Glickman joined Trader Joe’s in 2013, the business was “a very small, boutique kind of an organization under the current CEO Dan Bane,” Glickman told Dean.

And while employees felt “quite comfortable” with the status quo of solid sales, adoring customers and good products, “there were still opportunities to think differently about how we might make IT services better and position us for the future,” said Glickman, who added that his job was to approach these opportunities in an evolutionary rather than revolutionary way. “When I got to Trader Joe's, a lot of the people in my group were saying, ‘Hey, we never spend money on technology. And that’s one of our biggest challenges,’ ” said Glickman. When he asked the team for an example, he learned the stores’ network switches were aging and causing a high number of problem tickets.

“The business implications of having network problems in a grocery store are your customers can’t pay with their debit and credit cards. If your network is down, right, your stores can’t order to get product on the shelves in order to be ready when the customers come,” he said.

At the time, added Glickman, about 85% of Trader Joe’s customers were able to pay with a credit card every time they came to the store. He went to the president of Trader Joe’s with this issue and the problem of store employees sometimes having to go to another store to place orders due to the aging network.

But with a company as devoted to the customer experience as Trader Joe’s, Glickman knew he had to present a narrative that would resonate with the president and company culture. “You know, one of our values is a 'wow' customer experiences. How do you feel about making that 'wow' even better?” he asked the president at the time. “And you know, what did you think the answer was? Of course, ‘How do we do that?’ Well, now let’s talk about what we need to do to, you know, invest in technology to deliver that business outcome,” Glickman explained.

The decision as to whether to replace aging, obsolete equipment and software or not shouldn’t be proposed to a business as if they’re optional, said Glickman: “Those should be technology-driven decisions.” Trader Joe’s president agreed and the company’s systems were updated.

Transformational Leadership Later in the podcast, Glickman shared his philosophy on breakthroughs and being a “transformational leader.”

“When somebody tells me, they think it’s impossible … that’s how I know I’m in breakthrough land,” he said. “When we think something’s impossible, fear sort of takes over … so the first thing you have to do when you’re going for breakthroughs is get people to a place where they cannot feel fear and think more broadly about what we’re trying to get done,” Glickman told Dean.

If people know they can’t fail—that they won’t get fired or be destitute as a result of decision making, continued Glickman, the floodgates to creativity open.

“And once people think what you want to do is possible, then you can start thinking about options and implications for making that happen. So for me, transformational leadership is about the conversations that are required to get people from impossible to possible—to get nailed down a nonnegotiable outcome. That’s big. And then work with people to figure out what is required.”

Technology Breakthroughs in a People Business At Trader Joe’s, which Glickman describes as a “super humble” culture that is “all about the brand,” including the stores, the crew members and the customers, language like "breakthroughs" isn't bandied about.

So what does a “customer-facing breakthrough” look like at Trader Joe’s? “The breakthrough is getting people who have been doing the same thing the same way for a long time to think differently,” and creating wow experiences as a result, said Glickman.

While building a portal to help its buyers purchase differently and get to an in-stock position, was “game-changing for Trader Joe’s,” he said, “for another company … an Amazon or a tech-oriented company, that might be considered very mundane and sort of everyday, sort of blocking and tackling.

“We don’t lead with technology. We want a human interaction. We want our people to spend as much time talking to customers about products as they possibly can,” continued Glickman.

As to customer-facing breakthroughs, Glickman pointed to Trader Joe’s transition from paper to computerized ordering.

“We’ve replaced 7 million pages of paper with a tablet and we’ve given the people making orders more insights to get that done effectively and quickly so they can put the technology down and spend more time with customers.”

But don’t ask about Trader Joe’s “digital transformation.” Glickman, who has been using modern technology to improve businesses’ performance and profitability for 30 years, doesn’t want to answer that question. Instead, “ask me, ‘How am I helping my business to deliver wow customer experiences, have amazing products in the stores at the lowest possible cost, give our crew members what they need to engage in really awesome experiences and relationships with their customers?’

“Now, if there’s technology that can help to drive that, we’re going to do it.”


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