Trader Joe’s has been named among the top 25 innovators on the 2022 American Innovation Index.
Trader Joe’s and Amazon have been named among the top 25 innovative companies on the fifth annual American Innovation Index (Aii) by the Fordham University, Gabelli School of Business’ Responsible Business Coalition and market research firm Rockbridge Associates Inc.
The Aii is the only survey in the United States that measures company innovativeness based on customers’ experiences. Conducted this past July and August, the 2022 survey covers 190 firms from 19 industries, including airlines, hotels, banks, TV and internet service providers, wireless phone providers, manufacturers, and retailers. The study surveyed 6,416 consumers and covered more than 30,000 customer-company relationships.
The report also identifies America’s top businesses by sector. Retailers that scored high on the Aii for the Supermarket and Drug Store Sector are:
- Trader Joe's
- Whole Foods Market
- Publix Super Markets
- The Kroger Co.
- Albertsons Cos.
- Safeway (an Albertsons Cos. banner)
- Rite Aid
Limited-assortment chains like Trader Joe’s and Aldi have built their success in private-brand innovation as this format continues to gain ground across the U.S. landscape.
During the past five years, companies were required to rethink their business models and meet ever-changing consumer needs and priorities. After a dramatic surge during the height of the pandemic, the Aii rose 5.6 points from 2018 to 2022. Food retailers with the biggest gains in company innovativeness over the past five years include Ahold, with +20.6 points, and Albertsons with +11.2 points.
The researchers at Fordham University and Rockbridge Associates have proved that a focus on innovation that benefits the customer directly links to higher stock returns for the companies that make this commitment. Companies with higher innovation scores on the Aii are rewarded with higher loyalty, ultimately leading to greater financial success. Customer loyalty didn’t experience a dramatic jump over the past five years, but is up an average of 3.7 points, showing that innovation that benefits the customer pays off.
“Top companies understand the effect of innovation on customer loyalty, and our research has proven it,” said Lerzan Aksoy, Ph.D., a professor of marketing at Fordham University’s Gabelli School of Business in New York, which is based in New York. “Companies that invest in customer-focused innovation are more financially successful, but it does take time for companies to reap the rewards of higher loyalty.”
Maintaining shopper loyalty has been a key strategy for grocers this past year. During a presentation at Groceryshop 2022 in Las Vegas, Yael Cosset, CIO and SVP at Kroger, noted that customer reaction to Boost by Kroger, the latest addition to the grocer’s loyalty platform, has been overwhelmingly positive. This paid membership program can save customers more than $1,000 per year on fuel and grocery delivery. The one-of-a-kind membership has contributed to growing digital sales in the company’s second quarter.
Ahold Delhaize’s banner Giant Food recently launched a new promotion to help its loyal shoppers save money during this period of high inflation while also boosting its store-brand performance. Through the Giant Flexible Rewards loyalty program, the grocer is allowing shoppers to redeem their rewards points for store-brand products at reduced point requirements.
Meanwhile, Albertsons recently expanded the use of a shopper rewards and consumer loyalty app from Fetch Rewards. The nationwide rollout allows shoppers across all Albertsons banners to receive personalized offers and savings.
In addition, Fordham University released its Social Innovation Index (Sii), which measures a company’s ability to create positive social and environmental change and the degree to which it embodies responsible business, also from the consumer perspective.
Social Innovation among American businesses also experienced a sizable increase during the past five years, likely due in part to the pandemic, the social justice movement and theclimate crisis, as well as the rise in focus on environmental, social and corporate governance (ESG) efforts by American companies. Sii has risen 5.9 points over the past five years. Ahold was among the companies that increased the most in social innovation.
“Customers have noticed the efforts of top companies to innovate for the greater good, and our research has proven that it matters to them. They reward companies with a focus on social innovation with higher loyalty, and this in turn, is reflected in the bottom line,” said Gina Woodall, President of Great Falls, Va.-based Rockbridge.
More information about the Aii and Sii and a full list of company rankings is available online.
Monrovia, Calif.-based Trader Joe’s is No. 27 on The PG 100, Progressive Grocer’s 2022 list of the top food and consumables retailers in North America. Austin, Texas-based Whole Foods is a wholly owned subsidiary of Seattle-based Amazon, which is No. 2 on The PG 100. Lakeland, Fla.-based Publix, Batavia, Ill.-based Aldi U.S., Woonsocket, R.I.-based CVS Health, Cincinnati-based Kroger, Boise, Idaho-based Albertsons, Deerfield, Ill.-based Walgreens, Philadelphia-based Rite Aid and Ahold Delhaize USA, a division of Zaandam, Netherlands-based Ahold Delhaize, are Nos. 12, 24, 7, 4, 9, 5, 21 and 10, respectively.