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Now I am an executive member at the Costco
Very Berry with extra berries.
We came for pumpkin pie, actually.
And the king crab legs.
I think some of their customer base is absolutely
addicted to Costco.
Welcome to Costco where everything is huge and
it's been like this for 30 years.
From the carts to the warehouses to the products
themselves. It's a store fit for giants.
It's designed as much for a forklift truck as it
is for people.
That sense of scale is part of what the Costco
experience and the warehouse experience is all
about.
And Costco has made billions in revenue from
its no frills model significantly more than its
U.S. competitors.
Nothing in a store is placed by accident.
Take for instance staples like milk and eggs.
You have to travel all this way just to find the
dairy. This leads to something Costco calls
"treasure hunting."
The more you see, the more you discover, the more
you end up putting in your cart.
You end up buying other things you probably don't
really need.
You almost have to go in with blinders on and
walk right past the things that you are tempted
to buy.
But buying in bulk isn't for everyone.
For me personally it would be a waste of money to
get a Costco membership because I can't use up 25
pounds of flour or, you know, some of the really
big bulk items.
It just isn't worth it for me.
The average Costco transaction is between
$130 and $140. But members have been known to
spend much more.
I thought I would spend about $25.
And I ended up spending over $700.
$187.65.
$221 and change. You can come in here and spend
about $250, $300 easy.
They have a very loyal membership base.
Ninety percent of their members renew their
membership.
Being a wholesale club member comes at a price.
The interesting thing about Costco is that when
you speak to a consumer, they go quite
frequently.
And I have spoken to people that go and drop into
a Costco three, four times a week.
It is a very frictionless experience.
Moving through a Costco is pretty seamless.
There's minimal signage,
the aisles are super wide, and the carts glide on
the concrete floors.
There are free samples and even the occasional
massage demonstration.
You're free nay, encouraged to wander and take
your time.
I have so many memories of being a kid with my
sister like running around the store playing tag
or like hide and seek because it's so easy to
hide in there.
My parents would leave me on the couch there and
I'd go through all the books.
They'd come back to pick me up when it's time to
leave. The longer I can hold you in the store,
the more likely I'm going to get more money out of
your pocket.
I'm a huge fan of the Costco food court.
The food court.
Food court.
I only went to Costco with my parents just to go
the food court.
That front snack bar is both a snack bar, but it
is also a parking lot and it's a parking lot for
your two-legged pets called often children and
husbands. This is my favorite type of samples.
What is it? Like the big
ones? The big ones, right? There's
a direct correlation between people who sample
and the amount of money you spend.
Aside from their famous $1.50
hotdog combo, Costco is well-known for its
in-house brand Kirkland Signature.
Kirkland paper goods, bottled water, and olive oil
are some of their most beloved products.
But Costco isn't all bulk toilet paper and coffee
beans. It also carries luxury items like this
engagement ring that cost nearly $28,000.
At first it seems asinine.
Why on earth would Costco be selling diamonds?
If you dig a little
deeper, it actually makes sense.
Costco's also built its franchise with an
older American affluent consumer.
It is the baby boomer generation that has the
money in their pockets and the incentive to save.
That baby boomer generation controls the
overwhelming majority of wealth in North America.
And you know what?
They're going to be around for a while longer.
Costco isn't just a store it's an ecosystem.
My mom's a master of Costco.
She even bought curtains there.
And she gets gas there.
She's embedded in the whole Costco ecosystem.
The most loyal consumers have been dedicating
more and more share of wallet towards Costco so
they might have started with household goods, and
then they went into grocery.
Then they started buying appliances, before they
know they were getting all of their furniture
from Costco.
And now you see a lot of people also
participating in their car and hotel programs,
for instance.
If I think about why people keep coming back to
Costco, there are three things that are part of
who they are as a brand that is very well known
which is value, quality, and consistency.
At Costco, you save money.
Members love Costco for their cheap, high-quality
products like peanut butter.
For New Yorkers it's clearly a better deal to
shop at Costco.
And let's not forget about the wine.
My favorite part of the Costco experience is
probably their wine section which I know sounds a
little weird.
Costco, it does obviously have some really great,
beautiful, expensive wines.
But it also gives you a lot of value-friendly
wines which are really, really nice.
Costco is the largest seller of fine wine and
expensive spirits in North America.
They make their money getting you to buy 200
garbage bags all at the same time.
They make money getting you to buy 10 pounds of
coffee rather than two.
But stocking all those garbage bags isn't free.
So how is Costco making a profit selling wholesale
goods? Costco runs about 4,000 items on average
per warehouse, which allows them to be extremely
efficient. Employees don't waste time restocking
shelves because of the store's design.
The other upside of having such a curated
assortment of fast-selling items shows up in
their balance sheet.
They're able typically to sell their inventory
before they actually have to pay it which keeps
the needs for working capital pretty low.
They have direct relationships with all of their
suppliers and then have a logistics setup where
they — the goods are delivered directly to their
warehouse. So that keeps the SG&A at a very
minimal level.
Costco plays by the Golden Rule.
You treat your suppliers and employees well, they
treat the customer well, and you make tons of
money. That's the Costco secret.
So how does this model hold up in the age of
Amazon.
The surgence of Amazon has not hurt Costco's
business and there are many consumer tests or
retail tests out there that compare if you're
buying bulk at Amazon versus buying in bulk at
Costco, where do you get the best deal?
70% to 80% of the time you're still getting the
best deal at Costco.
Almost all major big box merchants have some form
of online presence.
Having some form of physical place for us to be
able to do our drive by and pick something up is
going to be part of our consuming future for at
least the next 50 years.
It seems Costco nailed the formula when it opened
30 years ago, but it isn't perfect.
Costco has been traditionally a leader in looking
at how to improve the sustainability of their
supply chains.
They actually have done a great job at leading
the way toward sustainable seafood and I know
we're working currently on sustainable beef,
among other things.
One of the things that they could be doing to
improve their performance is respond to one of
the most pressing issues at the moment which is
how to reduce our plastic use and plastic waste
globally. So
anything they could do to to improve their
packaging, improve their their alternative
offerings to help customers eliminate the use of
single use plastics would be great.
Despite the criticism, Costco members remain loyal
for one simple reason: everyone loves a good
deal.
Are you a Costco shopper?
Do you think it's worth it?
Let us know in the comments below.
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Why You Spend So Much Money At Costco

89 分類 收藏
ayane 發佈於 2019 年 12 月 4 日
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