Behind Costco’s Treasure-Hunt Shopping Strategy | WSJ The Economics Of

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Costco is one of the biggest and most successful retailers in the country. In this video, WSJ’s Sarah Nassauer dissects the wholesaler’s unique approach to doing business.

Photo: Qian Weizhong/ZUMA Press

The Economics Of
How do the world’s most successful companies generate revenue? In this explainer series, we’ll dive into the surprising stories behind how businesses work–exploring everything from Costco’s “treasure-hunt” model to the economics behind Amazon’s AWS.

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27 COMMENTS

  1. Let me tell you as a Costco fan, the reason customers keeps buying is cuz of the credibility in Costco products, they know those are never deemed as cheap even who doesn’t know about Costco.

  2. America hunger to consume products regardless to the actual need is what drives USA economy. None of these models will grow as big in Europe or other parts of the world.

  3. My husband and I live well over an hour away from a Costco. We only keep our membership because when we do make that treacherous drive every month or so we can buy quality items for an acceptable price. We also order some items from Costco online. But since we are senior citizens it is frustrating to have to “hunt” the huge warehouses for what we have on our list and it is never guaranteed that we’ll see our favorite items ever again. By the time we leave we are exhausted from the long walks, crowds, lines for returns, lines for customer service, lines to check out, lines to leave, and the many frustrations about not finding an average of 20-25% of the items on our list that we used to buy which may actually still be hidden somewhere in the warehouse but that we cannot find. Because of foot problems I cannot walk for miles but trying to use the motorized handicap scooters in these stores is even more difficult because of the crowds and very high shelves that I cannot see around from such a low position. For 20 years now Costco has been a love/hate relationship for us.

  4. When i go to Costco, i count that as a walk on my weekly exercise count.

    But Costco prices went up quite a bit last year and i no longer consider everything a good deal. So what i buy varies from each trip.

  5. Keeing things on pallets instead of stocking onto shelves is not a “little bit of saving” that’s absolutely huge. I work for Target and my entire day is spent updating shelf counts or restocking shelves, either directly from a truck or from the backroom.
    Costco doesn’t even have a backroom, you are shopping from the backroom. Completely understated how much more efficient that is.

  6. Here in Sweden when Costco opened, prices are not especially cheap by any stretch but often "ok" in bulk. Reason is many items are imported from US and our currency is super weak vs USD. So compared to stores operating only with EU products Costco is actually a bit more expensive.

    But customers still like it because it's interesting products and many things you can't get anywhere else. Feels very American and that is an experience in itself 🙂

  7. lol, they also will be taken over soon by online shopping. Their concepts are interesting but seem so outdated todays world. Who has time anymore, running around big hallways?

  8. Costco is life! Biggest thing you missed is the return policy, it’s why you can buy now and think about it later. I am never worried about getting stuck with something. Also their online selection for bigger items (like patio furniture for example) is really good and very high quality.

  9. Great video BUT completely missed the mention of supply chain integration. Costco buys entire vineyards' production or entite chicken farms in order to keep prices under its control. Second omission is mention of Costco's instore sampling which is pretty smart. Third omission is how they keep prices of hot dogs and pizza low in their in store restaurants to draw in shoppers.

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