America’s Love Affair with Costco

by | 11 May 2021

During the pandemic, I spent some time in Southern California with family, and fell in love with Costco, again. You know, that multi-billion-dollar global retailer with warehouse club operations in eight countries? As a city dweller I would rarely shop at Costco for bulk groceries and always renewed my annual membership – but after spending time I have officially found my shopping utopia.

And I’m not alone, consumers from celebrities to retirees love Costco. In a survey conducted by the American Customer Satisfaction Index’s (ACSI®), Costco Wholesale Corp ranked first (for the fifth year in a row) in consumer satisfaction, followed by luxury department chain Nordstrom. The giant has maintained a 90% retention rate with members. Slowly catching up to Amazon Prime, its largest competitor, which grew to 147 million members in 2021; Costco clocked 105.5 million card holders by March of the same year.

What makes Costco special is their commitment to creating a culture dedicated to its members (and employees). One that they succeeded in maintaining throughout the pandemic. One Brooklyn shopper reported increased shopping at Costco during COVID-19 because of the retailer’s strict social distancing practices to reduce the proximity of people in stores.

Like many other retailers, Costco adjusted its returns policy and to stave off supply chain woes they restricted consumer bulk purchases on essential items but did so with compassion. According to one source, some locations would allow customers to shop limited items for their neighbors providing they had their neighbor’s membership card. What a great way to show community support.

Costco enthusiasts often talk about how they feel smarter about their purchases. Most customers have a strategy to the way they shop at the warehouse club, although some admittedly fall prey to the “featured” items, a circulation inventory of higher priced items targeted to frequent shoppers who like to go back and “see what’s in-store.” The Costco Treasure Hunt, as it is known to its members, attributes to Costco shoppers spending nearly 150% more per shopping trip than shoppers at the average retailer. Rumor has it that the latest featured items include fragrant plants and shrubs to beautify decks and patios.

During the height of the lockdowns, Costco expanded its partnership with Instacart to provide same-day delivery service to club members and to Instacart subscribers. According to Consumer Reports, shoppers who use Instacart Express specifically for Costco deliveries are better off becoming Goldstar members to cash in on value pricing. Now all of that may not make a difference, as Costco plans to increase its membership fees next year. The hike will help offset the cost of introducing curbside pickup to its members. The warehouse club is currently testing click-and-collect shopping in suburban markets out West. Buying online and pickup in-store (BOPIS) is a compelling idea for those consumers interested in avoiding delivery fees and getting merchandise quicker.

Will you renew your membership?

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