Shifting focus a little bit from the previous topics, I want to analyze the marketing and business strategy that Costco is using to be the greatest retailer in the world. Although market dominator, Amazon, generates the most revenue, Costco is actually a larger retailer than Amazon and all other retail companies. Yes you read that right!Costco, not Walmart, nor any other retail companies in the market.
The best thing about this is that they aren't scrambling around looking for new innovations to reshape their business to keep up. Instead, Costco has been sticking to what they know and what has been successful for decades. Costco has been able to remain competitive by keeping a lid on costs and using membership fees to offer better prices than competitors. Costco has about 93 million loyal members, with about 90% of their members renewing their subscriptions annually. They also offer gas and an online shopping experiences for consumers that cannot be duplicated by any other competitor. They offer about 10,000 products on their website and app, including expensive items such as furniture, which you would not find in their brick- and- mortar locations.
Costco business model is set up so that they can be the last to raise prices, and the first to lower them. Although Amazon’s platform allows many consumers to save time and replace physical shopping through an online store or E-Commerce, Costco showed to be a retailer that customers are not willing to cut from their list of store visits. Suppliers also show that they want to keep a strong relationship with Costco by often negotiating for the best deals, even when prices(Inflation) rise, due to brands being able to trust that Costco will use the cost savings to keep price tags in stores down. Ultimately boosting their sales. Everyone is happy at the end of the day. It is a true win win for everyone. Business and Consumer.
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