af Melissa Caruso 5 år siden
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Mere som dette
As brick-and-mortar retail is decreasing and, by some accounts, is 'dying' in the United States, Costco has over 75 million members paying $55 per year just to have the access and ability to shop in its stores and to receive discounted pricing when shopping online and in its app. That’s almost 1/5 of the US population! Additionally, of those 75 million members, there is a 90% renewal rate each year. How do they do it? By providing a memorable and meaningful customer experience, which is evidenced by a 2018 Customer Satisfaction Index in which Costco surpassed Amazon as having the top-ranking online service in customer satisfaction, a position which Amazon previously held for 10 years.
This does not come as a surprise to those who follow Costco, though, as the big box retailer is known for providing a memorable customer experience through its product offerings, the treatment of customers, the treatment of its employees, and the value it provides. This mind map will explore these four areas to show how Costco has created a legion of loyal customers known as "Costcoholics" and has not only survived, but has thrived, in a time when all retail categories are drastically decreasing.
Costco has a strict policy that no product can be marked up more than 15% which it refuses to be flexible on. It is known for selling rotisserie chickens for $4.99, and a sheet cake for 40 people for $30. Even when given the chance to raise the price and to sell the same amount of units of a product, Costco refuses as it would be contradictory to its values. For example, Costco was selling Calvin Klein jeans at the low price it had negotiated of $29.99. It was selling them faster than Costco could stock them. The next shipment had a negotiated price of $22.99. Costco could have easily kept the price at $29.99 and continued to sell out of the jeans. However, the savings was passed on to the customer. The CEO said that although it was ultra-tempting to charge the higher price and make millions of dollars in the process, “We pass the savings on to the customer, every time." He went on to say that, while tempting to make the extra $7 per pair, "[O]nce you do it, it’s like taking heroin. You can’t stop.” It is this commitment to value that has customers raving about their experience at Costco.
Costco is known for the range of products that they serve, with people joking that they can serve you from birth through death - literally, as they sell baby formula and caskets and everything in between, including food, furniture, electronics, gas, and even offer services such as car care, a pharmacy, and eye doctors.
While they do have an app which includes a large product selection, it does not have all of the same offerings as the store, and Costco relies on its brick-and-mortar locations for a large part of its sales.
Costco also takes advantage of its customers' emotions and their impulsiveness to buy by stocking new products every day. There is nothing "in the back of the store," everything is out for customers to see, and there is constant replenishment and replacement of products. The store is also re-arranged nightly after closing, and there are no signs or maps of the store showing where products are, requiring customers to wander around the store on each visit to find what they are looking for. This sends customers "on a journey" to hunt and find what they are looking for. When the customer does find it, it feels like a reward or a treasure. It also has the added benefit of customers discovering new items along the way (and adding those items to their shopping carts, increasing total sales).
Costco is known for treating its employees well, and they are known to be very happy at work. Employees who are more engaged and happier are more likely to improve customer relationships and result in an increase in sales.
Costco founder and former CEO Jim Sinegal once said, "Success is doing a million little things well over and over again." It is this motto - always doing well, no matter how small the task - that sets Costco apart from its competitors and guides them to always keep their customers happy.
Some of the "little things" that Costco does right over and over again are free samples, a generous return policy, memorable experiences from employees, and guaranteed value on its products.
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