Welcome to the 14th annual HomeWorld Business Retail Champion edition (May 11, 2015), featuring the first two-time selection: Costco, which also was recognized for its housewares merchandising innovation in 2003.
A look back at the Retail Champion profile on Costco 12 years ago (see an excerpt on page 46) shows many parallels to the commentary on Costco featured throughout this issue.
Such strategic and tactical consistency commands a spotlight in a retail business that has urged many to explore dramatic change the past decade. Costco has twisted and turned to adapt to shifting market influences. But it has done so without straying from its longstanding course of curating a top-quality, right-timed, uniquely configured, value-priced mix of products and services.
That requires discipline, a word that comes up often when talking to Costco executives and vendors about why the membership club’s growth has been so reliable in an otherwise volatile retail climate.
When Jim Sinegal, the Costco lifer who cultivated its staunch quality measures and loyal culture, handed the CEO reins to fellow Costco veteran Craig Jelinek in 2012, few expected wholesale change. While the TVs that welcome Costco shoppers today are flatter and larger, the stores look, feel and act pretty much the same as they did when Price Club and Costco merged 22 years ago.
Despite the vast warehouse format, Costco’s scale doesn’t seem to engulf or daunt its members. They often feel quite cozy inside a Costco, as if they believe the selection was handpicked for each of them at that precise moment.
A good portion of Costco’s mix today, particularly in hard home, may be more programmed and with that more predictable. But it still tempts shoppers with the possibility of surprising discoveries along the way to replenishing the basics they’ve come to expect.
A road show for premium stainless steel cookware one week might be replaced the following week with a sampling of gourmet dumplings. Yet it seems to make sense.
Costco is precise and nimble, and the same is expected from its vendors. The leash is short when products don’t perform to Costco’s standards.
Even Costco’s online strategy, while wider than its in-store strategy, conveys the disciplined selectivity that underpins the entire Costco experience.
Costco is a standout store-centric merchant that has proceeded carefully through today’s digital detours. The late Sol Price, father of the warehouse club model, surely would approve how Costco has evolved into myriad product classifications, services and e-commerce platforms while keeping its supersized outlets vital, dependable sanctuaries for its members.
That Costco might seem like it hasn’t changed much since it earned its first Retail Champion nod 12 years ago is a strategic illusion, perhaps.
Retail progress is not always predicated on sharp changes in direction. Sometimes, the discipline to advance without straying off course is the mark of a true retail champion.