05/04/03
Don't look for this place in your newspaper ad - or TV. They don't
even advertise using traditional media. But, if you haven't found
Costco, you're truly one of the unenlightened among America's
shoppers.
This Nordstrom's counter-culture is more like the high-scale retailer
than one might imagine - but with a totally different twist. Nothing
is marked up more than 14% - and you never know what you'll find. This
makes Costco shopping like a treasure hunt - where the treasure may disappear
if you walk on by.
It's all in the plan - a merchandising masterpiece that has the
company outperforming all of the so-called warehouse outlets. A
typical Costco store almost doubles the sales of a Walmart's Sam's
Club store ... and Costco sales surpassed that of Sam's for the first
time this year.
By mixing class with mass, Costco attracts some of the richest
shoppers around, with incomes twice the national average. Costco is a
rare hybrid, says Robert Thompson, professor of pop culture at
Syracuse University. “Its father is a Rodeo Drive boutique and its
mother is Woolworth’s.” And after Costco’s well-heeled shoppers
cram their treasures into their Beemers and Benzes, they can’t stop
bragging about their finds.
In the beginning, Costco was much like other warehouse
clubs—offering cut-rate merchandise to small business owners. But
the company recognized that its business shoppers had plenty of money
to spend on themselves, if only they’d offer them some indulgences
alongside pallets of copy paper and fax machines. So as Costco
expanded beyond its base in the Northwest, it relentlessly tested its
shoppers’ spending threshold. (They haven’t found it yet: last
year a Costco shopper dropped $106,000 on a diamond ring.) As Costcos
cropped up in affluent suburbs across the country, the buzz grew
outside the business community. And today, individual members
outnumber business members by two to one.
A typical shopping tour at Costco might start at their gas station,
where 16-20 pumps are furiously slaking the thirst of lines of cars -
all saving an average of 20 cents per gallon over stations "on
the outside." Without your Costco card, don't try to reap
the savings. They don't accept cash - and only your membership will
get you in.
With a full tank, it's on to the warehouse - always filled with the
consumables you'd expect, but also crammed with seasonal and trendy
items that won't be there for long. Before you start exploring the
miles of wide aisles (much wider than Walmart's or Sam's Club's), it
might be advisable to get some "fuel" of your own at the
Costco snack bar - serving carnival delights like polish sausage hot
dogs and a big refillable drink for $1.50. Don't eat too much, so
there'll be room left for all the food samples when you hit the
grocery sections!
Now it's strategy time. If you have only one or two items in mind, and
they aren't too big - skip the huge Costco cart. It's a certainty
you'll fill it up with "I can't miss this" bargains as you
roll through the store. If you find a "got-to have" on your
journey - there'll probably be a cart for you a short walk away. This
little trick has saved thousands - avoiding the purchase of things
like charmingly lit reindeer statues and the like. I once
succumbed to the Costco art gallery - buying a huge Diego Rivera print
- perfectly framed - even though my walls had no space for it. I got
it home and it just didn't fit - and back it went, going through the
swift "no questions asked" return line.
Be on the lookout for the Costco "house" brand -
"Kirkland Signature." Found on almost anything - like clothing -
food items - luggage - this means top quality goods manufactured to
Costco standards. It comes with extreme value pricing.
If there is anything that crashes in the Costco experience - it may
be the long check-out lines. Don't run with the Costco herds on the
weekends - pick a Tuesday afternoon around two. You'll thank me for
that advice.
You'll pay an annual fee for the delights we're describing - but at
the price of six movies, you'll find the savings well worth it. We
figure you'll break even at the $225 a year purchase level - so if you
don't spend that much on food and other goods - stay out. If you eat a
hot dog a week at Costco - you'll have saved the membership fee! This
membership pricing makes perfect sense for 100% of Costco shoppers,
who don't even blink at the fee to "belong."
Oh yes - there's Costcom.com
online - for those of you who would miss the excitement of a trip to
see the real thing.
PS: 04/21/04 We apologize to Costco for re-naming their house brand
in our original article - the correct name "Kirkland
Signature" is now shown. Our thanks to Costco Wholesale for
bringing this to our attention - one more example of this astute
retailer's awareness.
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