The Shopping Strategy Of Costco

1042 Words 4 Pages
When Costco opened in 1983, people assumed that because of its mundane decor and small selection of stock items, it would close its doors within a matter of years (Cottrell 37). Yet, little did they know, Costco’s innovative design and layout has been envied by retail businesses around the world because they offer items for a short period of time and often change their products. Today, Costco is the third leading retailer, according to the National Retail Federation, surpassing retail giants such as Target and Home Depot. Costco has successfully created a sense of urgency and offers a well designed layout, yet, its high costs of goods and services may limit the diversity of customers.
The shopping experience Costco has to offer is predominantly
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Therefore, Costco encourages people to stay on the “race track” to inevitably slow the momentum of fast-paced shopping and to analyze each product. As the result, the “race track” creates boundaries in which the customer is only allowed to enter and exit in separate areas. Some customers may not appreciate the layout of the store because it takes time and effort to go shopping. But, this layout has proven effective for Costco because, according to Market Watch, Costco’s total sales in 2015 was approximately 11.2 billion …show more content…
Memberships offer in store credit rebates based on the annual purchases in order to build customer loyalty and to encourage more spending. The costs involved with the membership fees, along with the average price of a single item ranging from $10 to $20, can limit the diversity of the customer base. It may not be feasible for every family to invest in the membership fee as well as for the costs of goods.
During a recent observation conducted at the Redding Costco, I concluded that a large majority of customers had at least more than half of their baskets full of items. The cost of an overall purchase at Costco can easily exceed $200 for a few large bulk items within one trip. Families with two to three people may not want to purchase bulk items due to the fact that items may expire or go to waste. Therefore, not only does cost of membership place barriers in order to access Costco’s services, the higher cost of a single trip can hinder families from shopping

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