I intended for this post to be a self-deprecating one…about how my home is affectionately known as the mistake on the lake and how every sports season ends with a variation of the consolement, “There’s always next year.”
This guy knows what I’m talking about…
...But then I started thinking about Trader Joe’s, you know, the way I do. I always thought that Trader Joe’s finds upper-middle class, educated neighborhoods and marks its territory. The truth is, that the inverse is more characteristic: home values increase when a Trader Joe’s enters the neighborhood. In fact, “Homebuyers that live near Trader Joe’s have experienced - on average - a home price appreciation of 67 percent over the past five years” (Ledbetter, 2015). Many people attribute this to the fact that Trader Joe’s is a good barometer of the investment potential of the property you are buying (Ledbetter, 2015). Check out this video and chart which compare property value appreciation for Whole Foods and Trader Joe's; they like to call this the "Whole Foods Effect" in the industry, but we all know it should really be called the "Trader Joe's Effect."
Trader Joe's in Cleveland: Situational Influences
Let me introduce you to the (not-so) glamorous Woodmere, Ohio. This village is a small suburb of the greater Cleveland area and a five-minute drive from my home. In 2015, the area got its first...you guessed it, Trader Joe’s!
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| Woodmere, Ohio |
Reduce Fears
Woodmere has a population of 884 people with a median household income of $46,250. Woodmere is known for its crime and poverty. In general, large parking lots attract criminals who prey on defenseless shoppers (Babin, p. 247). A consumer who goes shopping in a fearful mood will tend to buy and experience less. In contrast, the parking lot at this Trader Joe’s is small, well-lit and surrounded by pedestrian traffic. These combined attributes increase the functional quality of the environment (Babin, p. 240). Its effect on increased home values decreases consumers’ security concerns as the neighborhood is less susceptible to crime.
Woodmere has a population of 884 people with a median household income of $46,250. Woodmere is known for its crime and poverty. In general, large parking lots attract criminals who prey on defenseless shoppers (Babin, p. 247). A consumer who goes shopping in a fearful mood will tend to buy and experience less. In contrast, the parking lot at this Trader Joe’s is small, well-lit and surrounded by pedestrian traffic. These combined attributes increase the functional quality of the environment (Babin, p. 240). Its effect on increased home values decreases consumers’ security concerns as the neighborhood is less susceptible to crime.
Job Security
Not only does Trader Joe’s mitigate fears but it also brings job security. The retail complex, Eton Collection, in which this Trader Joe’s resides brings “more employees than there are residents” (Cain, 2015). Trader Joe’s brought dozens of jobs to a community that direly needed it (did someone say corporate social responsibility??). Also, ever wonder who’s behind the private label curtain? Trader Joe’s sources many of its wares “from local farms and food artisans” (Kowitt, 2017). So not only is Trader Joe’s employing local residents but it also supports local businesses and suppliers.
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| Eton Collection, Woodmere |
Atmosphere
Given that the store is a stand-alone, that means the shopper makes an intentional decision to drive to the store. Thus, consumers are likely to participate in acquisitional shopping, since they have a specific intended reason for going into the store. Yet, once inside, consumers likely engage in impulse shopping if they are hungry and desire for immediate gratification (Babin, p. 233). The consumer’s perception of the elements in a given environment working together determines the atmosphere. Social settings make up part of the atmosphere. This store always has a mild degree of crowding, increasing the attractiveness and perceived quality (Babin, p. 244). This mild crowding attracts other retail stores to the complex, ultimately increasing the total attractiveness and property value of the project.
Given that the store is a stand-alone, that means the shopper makes an intentional decision to drive to the store. Thus, consumers are likely to participate in acquisitional shopping, since they have a specific intended reason for going into the store. Yet, once inside, consumers likely engage in impulse shopping if they are hungry and desire for immediate gratification (Babin, p. 233). The consumer’s perception of the elements in a given environment working together determines the atmosphere. Social settings make up part of the atmosphere. This store always has a mild degree of crowding, increasing the attractiveness and perceived quality (Babin, p. 244). This mild crowding attracts other retail stores to the complex, ultimately increasing the total attractiveness and property value of the project.
Overall, Trader Joe’s seems to be pretty good for our small Cleveland neighborhood of Woodmere, as the community reaps the benefits of this great shopping experience. So basically, if you had to choose between samples or increased home values, just pick both!
And as for the Indians: “There’s always next year.”
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| LeBron James mural gets a Betty White 'HOT in Cleveland' makeover |
Sources:
Babin. B., & Harris, E. (2016). Consumer Behavior 7. Boston, MA: Cengage Learning.
Cain, Brenda. “Standalone Trader Joe's Coming to Woodmere.” Cleveland.com, 30 Apr. 2015.
Kowitt, Beth. “These Are the Companies That Make Trader Joe's Labelled Food.” Fortune, 10 Aug. 2017.
Ledbetter, Carly. “Living Near This Grocery Store Could Increase The Value Of Your Home.” The Huffington Post, TheHuffingtonPost.com, 15 Aug. 2017.
Video and Images:
Browns Fan: https://goo.gl/images/dgS6Zf
Video: https://www.youtube.com/watch?v=njI_NeJ47s4
Graphic: https://goo.gl/images/it6qhV
Trader Joes, Woodmere: https://goo.gl/images/wCLSqL
Eton Collection: https://goo.gl/images/UE594P
Betty White: https://goo.gl/images/g1C7zT
Graphic: https://goo.gl/images/it6qhV
Trader Joes, Woodmere: https://goo.gl/images/wCLSqL
Eton Collection: https://goo.gl/images/UE594P
Betty White: https://goo.gl/images/g1C7zT
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