How Costco Used Psychology To Become the World’s Third-Largest Retailer
The science of free samples and cheap hot dogs
What if I told you that the world’s third-largest retailer was a members-only bulk-buy warehouse?
It’s hard to believe, but according to Deloitte’s 2021 Global Powers of Retailing report, Costco is the third-largest retailer in the world, trailing only Walmart and Amazon. The brand brings in an incredible $152.7 billion every year, despite limited advertising and an annual membership fee of between $60 and $120.
Costco’s business model is counter-intuitive:
- It charges people to shop.
- The store experience is best described as “bare bones.”
- Most products are sold in laughably large amounts.
Nevertheless, as FastCompany put it “[Costco] succeeds because of its adeptness in breaking the rules of retail common sense.”It’s a brand that, as FastCompany put it “succeeds because of its adeptness in breaking the rules of retail common sense.”
Costco “succeeds because of its adeptness in breaking the rules of retail common sense.”
