"A critical—and often misunderstood—component of Costco’s business model is its erratic availability of products, especially higher-end, non-essential items. To some, the unpredictable stock levels may seem like a flaw, but for Costco, it is a feature designed to drive customer engagement and manage inventory risk."
Some of my favorite products at Costco are only available sporadically. You're right in that it generates a ton of excitement and a need to "stock up" while I can.
The sporadic products are often ones that can't be found easily in other stores so while I know the tactic is manipulative, I don't really care.
Thanks, Gad, for another insightful article. I'd be curious how much gasoline contributes to their loyalty, product mix, and profits.
I think there's a distinction between rural and urban Costco shoppers, especially those who use it for gasoline. For many urban drivers, Costco membership is worth it for the savings in gasoline alone.
Does Costco also contribute to the immense level of food wastage? When you buy food in bulk, especially perishables, at lower prices, you have less feelings about throwing the food away. Also, does it contribute to consuming more and thus leading to obesity?
"A critical—and often misunderstood—component of Costco’s business model is its erratic availability of products, especially higher-end, non-essential items. To some, the unpredictable stock levels may seem like a flaw, but for Costco, it is a feature designed to drive customer engagement and manage inventory risk."
Some of my favorite products at Costco are only available sporadically. You're right in that it generates a ton of excitement and a need to "stock up" while I can.
The sporadic products are often ones that can't be found easily in other stores so while I know the tactic is manipulative, I don't really care.
Nor should you! I think it works both for Costco and its customers.
Thanks, Gad, for another insightful article. I'd be curious how much gasoline contributes to their loyalty, product mix, and profits.
I think there's a distinction between rural and urban Costco shoppers, especially those who use it for gasoline. For many urban drivers, Costco membership is worth it for the savings in gasoline alone.
This article makes a similar point: https://www.thestreet.com/investing/costco-gas-price-near-me
I think unless you live near Costco, I am not sure it's worth the trip just to fill the tank, but it clearly pays for part of the trip.
Very interesting article! Congrats!
Does Costco also contribute to the immense level of food wastage? When you buy food in bulk, especially perishables, at lower prices, you have less feelings about throwing the food away. Also, does it contribute to consuming more and thus leading to obesity?