Costco, one of the largest and most successful retail chains in the United States, has just made an unexpected shift in its business strategy. While other supermarkets fiercely compete with coupons, flash deals, and free shipping, Costco has decided to break away from that trend. It has simply stopped following the crowd and has chosen to focus on what it does best: its membership model.
This decision may surprise many, but in reality, it's not something so new for Costco. Since its beginnings, the brand has trusted the exclusivity of being a member to generate revenue and build customer loyalty, but they've taken it a step further, renewing and strengthening their model. Although other supermarkets fight to capture the attention of new customers, Costco prefers to trust its members can keep its success.
A very profitable business model
Costco has been operating with the membership system for years, which means only members can access its products. Although some may consider this approach a barrier, the truth is that it creates a sense of community and belonging. This model not only generates revenue from product sales, but also from memberships, which in 2023 totaled $4 billion.
Costco's business isn't just about offering low prices. In fact, it focuses on the customer experience and on making shoppers feel like they're part of something bigger. Memberships give them a sense of exclusivity that turns them into loyal customers.
Once you pay the $65 or $130 annual fee, the competition loses its appeal. You won't look for the same product cheaper somewhere else, because the value of belonging to the Costco club makes it worth it.
Memberships: The key to success
Not just anyone can shop at Costco; you need to be a member to access its products and deals. The store has different types of memberships, tailored to each customer's needs. The most basic is Gold Star, which costs $65 per year, but there are other options, such as the Executive membership, which costs $130 and offers 2% cashback on purchases.
If you're one of those who prefer to shop online, Costco also has a digital membership for $50. This system is ideal for those who don't go to physical stores, but still want to enjoy the club's benefits.
The best Costco stores in the U.S.
Costco has some iconic stores in the U.S. that have earned a place in the brand's history. In Issaquah, Washington, you'll find the flagship store, next to the corporate headquarters. Las Vegas and Honolulu also stand out for their high sales volume, with an extremely high product turnover.
Salt Lake City is another city where Costco keeps growing. There, the product turnover and the speed at which inventories are renewed make the store a resounding success. Without a doubt, Costco keeps betting on a simple business model: building customer loyalty through exclusivity and quality.