By: Chris Warren
If you’ve never shopped at a Costco, there’s a real good chance you know someone who has. The warehouse retail behemoth has over 76 million individual members (that’s roughly 25% of the entire population of the USA) and almost 7 million business members. The sheer volume of what Costco has in stock is a microcosm of the United States. Nothing is small there. The soap & detergent section alone is bigger than many entire retail stores. Pallets of produce, display freezers large enough to drive a truck into, and rows of electronics stacked so high, a fleet of forklifts are needed to keep them in order. Costco is one of the most profound business success stories of modern times and has a public image that is the envy of corporate world. It has a “This is America! Big! Big! Big!” vibe to it.
Not that long ago, Sears was the store everyone shopped at. Whether you needed a pair of shoes, a washing machine, or a power drill, Sears could meet every desire. It was the only place where you could get your teeth and your car and your watch fixed all under one roof, then pick up a new suit and a toaster on the way out. Their Christmas catalog was legendary. It would arrive around Thanksgiving, which seems quaint by today’s standards since Christmas sales now start on Labor Day. As a child I would eagerly pour over the pages checking out all the cool toys, trying to calculate how much I could get out of my parents.
Through a sad confluence of bad luck, a bad economy, and bad management, Sears is now a shell of its former self and barely squeaking by. Generations of American families filled their homes with Sears products. Now it’s hard to find someone who has even set foot in a Sears store lately.
Costco has become the new place for everything. Judging by the traffic outside, it seems everyone wants to go to there. All that is missing is a Statue Of Liberty in the parking lot calling all the huddled masses. As we enter, we must first stop at the Costco version of Ellis Island where the attendant checks membership cards and clears immigrants for entry. Formalities settled, we pass through a door and behold the amazing bounty opening before us.
It’s hard to think of a warehouse store as “cool.” They are warehouses after all, set up for utility and efficiency. There is nothing elegant or plush about the place. From the bare cement floors to merchandise displayed in the same shipping boxes it arrived in, to harsh bright white overhead lights, they’ve purposely omitted the frills to give customers, excuse me, members, a good deal. Even the food court has a certain generic cafeteria-esque quality about it with bench seating and plain stenciled menu boards.
After going well out of its way to assure an austere shopping environment Costco perhaps unintentionally established itself as a cool place to buy stuff. There is a catch: You can’t shop there unless you’re a paid member. It’s hard to wrap my brain around the twisted logic of paying for the right to shop, but there must be something to it because through membership fees Costco pulls in hundreds of millions of dollars every year without selling a single item. As a member myself for many years, I’ve been sucked into the vortex too.
Home Depot or Target would be laughed out of business within a week if they ever dared charge admission. It must really burn the nerves of other retailers that they struggle while Costco not only thrives, but consumers cheerfully fork over their cash just for the chance to walk through the door. There’s more to it than the simple concept of offering deals that offset the cost of membership; Costco has that certain unidentifiable something that makes shopping in a warehouse cool. Heck, they don’t even advertise or have a public relations crew. They don’t need it. Employees and customers absolutely love the place with a cult-ish devotion and it shows.
On a recent Costco run with a friend, our carts were piled high with canned vegetables, two pound bags of chips, bottled water, frozen stuff, everything. Oversized shopping carts and flatbeds are standard issue. There are no hand baskets. No one goes to Costco for just a few things. We never spend less than $100 each and need my pickup truck to haul it away. We don’t get to do this very often, so we load up while we can. Eighteen checkout lanes are open and every one of them has a long line behind it. Employees move everyone through with impressive efficiency. The crowds may be large but Costco has a way of making it less crazy than it appears. The system works and we are done quickly.
On the way out we hit the food court: $2.50 for a huge slice of pizza and a drink. Where else can two hungry guys chow on pizza good enough to make us forget it came from a food court, plus free drink refills, for five bucks? My buddy is not originally from the United States and thinks it’s the the most kickass experience ever. He loves this! If you ever want to impress a visitor from a foreign country, just bring them to a Costco.
Watching a famous symbol of Americana such as Sears slide into what is probably terminal decline is difficult. There’s no gratification when luminaries fade, especially when it involves a lot of paychecks. It’s certainly possible Sears will bounce back, and I hope it does, but the trajectory it’s on is not encouraging. There is something to be positive about: Fresh and new follows the old and flagging. It’s all just part of the cycle. The huge crowds of enthusiastic Costco shoppers provide the appropriate metaphor: There is always another big idea waiting in line to become the next business legend.