Costco – Nightclub Marketing Strategy in Shopping

What makes people…

  1. Line up for 30 minutes to get into a store that is not having a stocktake sale?
  2. Pay a member joining fee to be able to purchase at the store?
  3. Spend a lot of money to supposedly save money?

Answer: Costco

I considered this phenomenon beyond my comprehension. Then it struck me – Costco is employing classic ‘nightclub’ marketing strategy and it’s working.

The Journey to Costco

It took two attempts. The first attempt took 15 minutes of waiting in a queue only to realize that it would be another 45 minutes before could enter the store. My attention span is about the same as a Jack Russell Terrier so we aborted our first Costco operation just before I was about to poke knitting needles into my eyes for entertainment. It became clear that Costco to a 9 and 12 year old is the equivalent of Melbourne’s Disney Land and an absolute ‘must see’. Hence we had a second attempt at visiting the land of food in big tins which proved a far more strategic operation.

What a way to spend a Sunday morning!

Shoppers wait for doors to open. What a way to spend a Sunday morning!

We Got In!

Melbourne’s answer to Disney Land. Enjoying one of the rides

Arriving Sunday morning about 20 minutes before opening, we easily found a park and shuffled into the queue behind other shoppers (who were crazier than us and had arrived even earlier). Our completed online membership application in hand, we were ready for the doors to open. The crowd’s excitement started to build at the 15 minutes to opening mark. I was reminded of the scene in Willy Wonka and The Chocolate Factory when the five lucky ticket holders were waiting behind the factory gates. There was no Gene Wilder to greet us but there was a Costco employee who was shuffling excited shoppers into queues of members and non members. Yes there was definitely a buzz. Maybe it was just shoppers’ anxiety.

Inside Costco the Surprises

  • There is an in house bakery
  • It is just like shopping in America and they had cooked buffalo wings
  • They sell digital grand pianos and kayaks
  • The choice of brands is narrow
  • The staff seems to enjoy their job and love Costco
  • Customers were verbalizing ‘what a good deal it was to be a member’ and were encouraging their friends to join.
  • The most popular purchase is humungous packs of toilet paper.

I guess people have big cupboards to store this!

Similarities between Costco and a Nightclub

  1. There is no interest in a nightclub that doesn’t have a queue
    Clearly the interest in Costco has been caused by people seeing the queue
  2. You expect to have to wait to get into a nightclub
    Shoppers are prepared to wait to get into Costco
  3. Gaining membership to a nightclub means you are in the ‘in crowd’
    Membership of Costco means you have a special queue
  4. Even though a nightclub might is rubbish you tell all your friends it was fantastic – to justify your investment in it.
    There is a lot of hype about Costco which I believe isn’t justified
  5. Upon leaving a nightclub you go and eat crap food
    Upon leaving Costco same – at their cafeteria
  6. Word of Mouth makes a nightclub
    Word of Mouth is making Costco

Yes shoppers continue to practise their lining up skills to leave the store!

The one big difference between Costco and a nightclub is that at a nightclub there is never any toilet paper!

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