Inside This Issue - Opinion
Costco connects with members
November 4th, 2013
by David Pinto, Editor
FORT WAYNE, Ind. – Costco opened a warehouse in Fort Wayne last month, one of a half-dozen the formidable club retailer unveiled during the third week of October. (Others debuted in Wisconsin; Kentucky; Washington, D.C.; and Canada.)
The Fort Wayne opening was the talk of this Indiana city southwest of Detroit, though it was the initial warehouse Costco had brought to the community of 254,555. Locals knew in advance of the event and were even familiar with the location. Indeed, the retailer had prepared the city for the opening, giving local residents ample opportunity to become Costco members and throwing a preopening night party at the warehouse. Several Costco executives, including chief executive officer Craig Jelinek and founder Jim Sinegal were on hand for the opening — one stop for them on a trip to each Costco unveiling during the week — stopping shoppers to solicit comments and opinions about their shopping experience, the new warehouse and, typical of retailers who truly enjoy the best part of their job, clearly enjoying the excitement, energy and activity a Costco warehouse invariably engenders.
Indeed, excitement is among the primary reasons for Costco’s unprecedented success (after just over 25 years in business, the retailer was able to generate $99.14 billion in sales out of 608 clubs in eight countries during its last reported fiscal year, while emerging as the retailer of choice for countless millions of customers throughout the United States).
The Fort Wayne warehouse clearly delivered on the expectations of Fort Wayne’s citizens. The usual Costco assortment was enlivened by new, eye-catching displays, a sprinkling of upscale beauty brands not seen before at Costco, a dramatically placed Christmas assortment, an array of grocery products that continues to grow while never failing to excite, ample opportunities for members to sample the Costco merchandise, and the reliance on value that induces members to spend hundreds of dollars where they had initially intended to spend less than $50.
Throughout the opening-day panoply of activities, Jelinek, Sinegal, the warehouse manager, her staff and the many associates Costco had brought to town for the occasion focused not on the throngs of members who eagerly snapped up merchandise. Rather, they sought to discover those flaws that every retailer is forced to confront at the opening of a new emporium. Though deficiencies were virtually impossible to detect, it was not for lack of trying. As Sinegal commented on a tour through the warehouse: "We don’t have an annuity. It’s easy for these warehouses to become dull. So we have to keep improving them, adding new products, new services, new inducements to buy."
That’s what Fort Wayne was all about.
What the Costco staffers did mostly at the Fort Wayne warehouse was talk to members. Or listen. In fact, mostly listen. They engaged the members in conversation, not specifically to determine the members’ impression of the warehouse — though that impression was clearly positive — but to inquire about the shoppers. Interestingly, but not surprisingly, the Costco staffers wasted no time identifying or talking about themselves. Rather, they wanted to know about their customers and, through them, about the community, one of the many Costco will enter in the coming months and years to fill in the gaps that exist between the two coasts that had once been Costco’s primary focus in the United States.
But clearly, the United States has not been Costco’s only focus. As stated, one of the warehouses the retailer has just opened is located in Canada. Moreover, over the past month Jelinek and Sinegal have visited Australia and the United Kingdom, the former to attend the openings of the retailer’s newest clubs in that country, the latter to celebrate the anniversary of its first club in that country.
On this day, however, it was all about Fort Wayne, a community once widely believed to be too small to support a Costco. As the opening proved, Fort Wayne is perfect for a Costco. And by extension, virtually no U.S. community is too small for this retailer.
Moreover, so long as Costco’s staffers expend this kind of time and energy planning and executing a single opening, no community will ever be too small to support a Costco warehouse. And in the end, as it should be, it’s the community that will emerge as the biggest winner.