There is no official start date for the retailer holi- day season.;But retailers are starting holiday sales earlier and earlier and working hard to win your business.
A big key is increasing foot traffic. I went to a Los Ange-les-area Costco store in late August and was surprised to see
Christmas products prominently displayed. At the time, Halloween still seemed far away — let alone Christmas.
The store was crowded, and it is very obvious Costco retail is thriving. How can this be with all
the doom and gloom on the current state
of affairs for retail stores? A big reason
is that — for many — it is more enjoyable to shop earlier for special gifts at a
location like Costco. This creates more
memorable buying experiences. Costco
is very smart to contribute to customer
satisfaction and loyalty;with the simple
magic of timing.
A couple of weeks later, I returned to
the same Costco to find out more and
took the initiative to survey 50 customers with some questions. The graphic at
right shares the responses I received.
I was surprised to see 20 percent
of consumers start shopping for the
holidays in August and September.
But the survey result that really caught
my attention is the importance of the
membership card benefits to Costco
members. Costco has 85 million members worldwide and the
membership renewal rate is better than 90% in the United
States and Canada.
According to the American Customer Satisfaction Index,
Costco ranks first in customer satisfaction among specialty retailers. A major reason for the high ranking is money earned
toward future purchases. The Executive
Member annual 2-percent maximum reward
increased to $1,000 from $750 — providing
further incentive to spend. Costco recently
increased the Executive Membership fee to
$120 (from $110) and the Gold Star Membership fee to $60 (from $55).
On another front, Amazon’s Whole Foods
acquisition will provide major benefits to
Amazon Prime members, including improved grocery de-
livery and online order pickup in stores. Costco will be the
least affected by the acquisition among major grocery retailers
because Costco’s model works on small margins and large
volumes. It is fascinating Costco has been growing revenue
without a strong focus on e-commerce.
Consumerist notes, “Costco is beating the odds by offering
things that are impossible or annoying to order online. Most
of what people go to the warehouse club for is food, and
the top sellers in food are alcohol, deli
items, and candy. While other physi-
cal stores (except Walmart) complain
that foot traffic is down, Costco knows
that its members are visiting 4-percent
more often than they were last year.
Gasoline is an important thing that
brings customers back to the physical
store, getting customers into the parking
lot. While they’re there, they might
as well walk around the store and see
what special items are around that day.
Costco CFO Richard Galanti cited: the
‘treasure hunt,’ or finding special one-off
items that won’t be there next week or
even tomorrow. Costco is very slowly
expanding its online presence, running
fulfillment out of 19 distribution centers.
It comprises 3. 5 percent of the compa-
ny’s sales and increases modestly.”
Beyond Costco’s doors, expectations
remain strong for all retailers for the coming holiday season.
Online sales are expected to — again — grow powerfully, but
in-store sales will also rise. eMarketer details some key holiday
; U.S. retail e-commerce sales jumped 17. 8 percent during the 2016 holiday season, which helped push total
retail sales up 4. 8 percent.
; For the 2017 holiday season, e-commerce
is expected to climb 15. 8 percent, with total
retail growth slowing to 2 percent.
; E-commerce accounted for a record 10. 6
percent of total retail sales in the U.S. during
the 2016 holiday season.
;Maybe next year we will be talking about
Christmas in Spring?
Costco Shoppers Get a Desired Early Dose
of Holiday Fever
BY ANDY ARVIDSON
50 MEMBERSHIP CARD BENEFITS
25 30 25%
OCTOBER NOVEMBER DECEMBER
When do you start shopping for the
Do you prefer purchasing holiday goods
in-store or online?
Why do you shop at Costco?