#6: Everything at Costco is done to save money for the customer
235 000 sqft Costco store in Salt Lake City (Source: MG2.com)
Everything at Costco is big and designed to save customers’ money. Enormous shopping carts, products on pallets, only big wholesale portions of products, big out-of-town stores…
By doing all of these things, Costco makes it possible to save money and move those savings back to the customer. On the other hand, many of these choices are not ideal for creating a os-called perfect customer experience. Some of the choices do limit the amount of customers who are willing to driving further or buy in bulk or pay the membership fee.
Costco isn’t something for everyone, it is very good at serving a specific need for a specific group of customers.
“If that stuff (saving customers’ money) doesn’t really turn you on, then you’re in the wrong business.”
The quote is from the book Simply Significant.
Big stores, but less of them
Because Costco is very mindful of not spending too much money on anything that does not add value for the customer, Costco is also conservative in building out new stores. It does expand rapidly, but is mindful of how many stores it opens and where it opens the stores. This can be seen when Costco store efficiencies are compared to Walmart’s figures.
Costco has significantly less stores and they generate much more revenue per store.
