Inside Costco's Success & their 'Treasure Hunt'

As of 2015, Costco was the second largest retailer in the world after Walmart and its stock had soared more than 5,000 percent since going public in the mid-1980s.

However, this store doesn't install signs in its aisles. It rather lets it's customers wander in the store, looking for the things they intend to buy while browsing through stuff that they "notice" on the way. 

Poor customer experience, right?

Wrong! Costco, in fact, has mastered the psychology behind shopping. 

Costco constantly changes the location of its top-selling products - such as light bulbs, detergent, and paper towels - forcing the customers to search storewide. And as logic dictates, the more time consumers spend ambling around the store, the more likely they are to spend.

Costco rotates upward of 25% of its hard-goods and its products. The result is that, of the 3,600 items for sale, a full 1,000 may be offered only for that particular moment and may not be available for a future shopping visit. These non-repeated, limited period offers are hidden among its standard inventory. Thus, shoppers are treated to a "treasure hunt" every time they visit Costco. 

This sense of excitement and urgency, also, creates a need for customers to visit frequently. Obviously, the more often a customer visits, the more "treasures" he or she discovers.

In 2012, Costco had 64 million annual members with more than 90 percent renewing each year. Costco's No. 1 seller is toilet paper. They sell more than a billion rolls of toilet paper a year. That is enough to wrap around the Earth 1,200 times!

Supplement with:
What Makes Costco so Successful? by Brian Woolf,


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