On a + note

Costco and Libraryland. #26: 2012

Posted in on a + note by flickfancy on August 6, 2012

Recently there have been a series of articles and documentaries about Costco.  

If you haven’t heard, Costco with over 600 stores (82 in Canada) is one of the world’s largest big box retailers. They sell everything from cases of toilet paper to high end wine. With no in-store signage and a central “race track” to access all merchandise, the bare bones warehouses are designed to encourage customers to explore every aisle and of course buy.  Most of Costco’s profits do not come from the sale of beef or glasses or toilet paper…in many cases they just break even. No, Costco profits come from the $50 or $100 membership fee their 65 million loyal customers pay annually. And amazingly they have a 90% membership renewal rate.

A critical part of the Costco success is their staffing model. In all stores there are lots of smiling, well informed staff to help the customer. All new Costco employees are paired with a buddy, they hire both young and old, plus they pay above the retail average. As a result, staff turnover is remarkably low. They also wrote the book on product demonstrations. Just go to Costco on a Saturday afternoon…or better yet, drop by and sample your way through lunch! Their unique staffing and customer service models comes directly from their amazing founding CEO and retail guru Jim Sinegal.

Costco also stands for quality and low prices. In 1995 they introduced Kirkland Signature an in-house brand that offers brand name quality at a discounted price. They also pioneered co-branding of products they do not produce. These Costco partnerships have paid huge dividends to sub contractors and service providers who work with the Costco marketing machine to provide services such as picture framing, hot tub installation and even garage doors.

Costco  rigorously tests everything they sell, and the most tested is their biggest selling item: toilet paper. Just sit in their food court and watch the shopping carts leaving the store, most have  meat, produce, prescriptions and yes, toilet paper all in large quantities.

So, what do Costco and libraries have in common?
►a loyal membership base
►great products
►passionate, well informed staff

Now, I am not suggesting that we in libraryland become Costco’s; there are many things not so great about the big box model. However, there are some things we can learn. For example:

►Costco makes it easy to buy…we need to make it easier for folks to use the library…from fewer stairs to more on-line resources, to more samples!

►Costco locations are easy to find and their parking is free and plentiful. For libraries parking is always an issue!

►Costco uses friendly folks at the door as you enter and leave…to give you that positive massage about shopping at Costco and being a member. Maybe we in libraryland should invest in a few folks at our doors…not just a snoozing/telephone chatting security guard!

►Costco is constantly studying their customers, their products and what motivates their customers. We need to do more of the same.

The Costco service model is really interesting and right now a model that seems to be growing expediential. However, nothing lasts forever. What will be interesting to see over the next 5-10 years is if the giant big box retailer can continue to change and morf as customer needs and motivations change.

In the mean time I will continue see if I can actually go to Costco and buy just one thing!

Have a great week.

Kitty Pope                                                                                                                                              #26 August  2012


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