Costco’s Success in Retail Business

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Costco has been a household name for the past 38 years, all due to their customer appeal.

Anjali Nadarajah

From food and clothing, to even funeral caskets and tickets to Disneyland, the reputable Costco we know and love has everything. With their exclusive membership, the admirable shopping experience, and obviously their rotisserie chicken, Costco has been a household name for the past 38 years, all due to their customer appeal. 

 “I love Costco because the people who work there are always super friendly,” eighth grader Ava Schmier said. “It’s nice to be able to buy in bulk sometimes, because it’s cheaper. My dad goes every week.”

Like Schmier, thousands of other Costco shoppers across the globe love them for their general environment. 

Aside from that, Business Insider states, “Costco enthusiasts love the low prices, the food court, free samples and the general atmosphere.” 

The dedication to Costco goes beyond raving reviews and recognition. John, the proud founder of the I Love Costco blog, says, “Costco relaxes my soul.” The I Love Costco blog was created in 2008, and is still up and running today. It features coupons, new products, and even a little sneak-peak into John’s life. John doesn’t reveal his surname for privacy reasons, yet is still very recognizable in his work. 

Costco’s success is due to a multitude of reasons, including their membership aspect. They make very little of their money from selling goods; rather, a lot of their earnings come from selling their memberships. Costco annual memberships include exclusive offers, additional discounts and annual rewards from the brand, which are all very enticing to buyers, as they save money. 

Costco’s customer loyalty is like no other. With their inexpensive, exceptional goods, like their travel packages, fresh food, and gas, buyers always come back for more. About 11 percent of an average Costco shopper’s spending happens at Costco, says Business Insider. In addition, Costco customers take around 23 trips per year, visiting every two to three weeks. 

Forbes quotes, “Costco sells high-quality items at reasonable prices, which is enough to win over many customers.”

Furthermore, Costco’s advertising budget is as good as zero. Compared to many other brands, like Walmart, Costco’s products “sell themselves without advertisement,” says Investopedia. Because of their products’ great value, other retailers can’t match Costco’s prices and worth. Investopedia also states that if Costco spent even 0.5 percent of their revenue on marketing, it would eliminate 17 percent of their operating profit. It would not be worth it. 

In my opinion, Costco is a place filled with memories, and great products. As a child, I would love going to Costco with my family; sitting inside the cart, sneakily grabbing boxes of cookies, and taking an abundance of samples. Now, Costco to me is a place of quality products, comforting food, and above all, nostalgia. 

Costco’s membership, shopping experience, customer loyalty and advertisement budget all make up what this company is: a tremendous bulk store with a commitment to quality and their customers.