“What if there were a store for stores?” NPR asked on episode 653: The Anti-Store. Yes, what if? Sit back, relax, and we’ll tell you the origin story of the weird, giant store (Costco) that doesn’t actually want to be a store at all.
It all started when the founder of Price Club, Robert Price (yep, that’s really his name), thought of a seemingly brilliant-but-disastrous idea: Make a store that sells lots of stuff to other businesses. The problem? Business owners just weren’t interested.
The desperate owners wondered what they could do to keep their store afloat, and so they opened the store to actual, normal people — not just business owners, who really didn’t want anything to do with it anyway. People started paying to shop. Maybe those people are you?
A deeply fascinating primer on how Price Club became Costco: The Price Company (which owned Price Club) merged with Costco in 1993 and became the not-so-catchy Price/Costco. In 1997, the name was changed again to Costco Companies. Now we just call it Costco.
In the episode, NPR brought up a pretty good point. Most retail stores follow a few universal laws: Be convenient. Advertise. Welcome people in. “And then there’s Costco,” NPR said. They don’t really do much advertising; in fact, they try to keep it super exclusive-feeling.
So what’s the deal? Why is it a club, and why are there no damn Costco aisle signs? Are they trying to make us go crazy? Is the food court worth it? (Yes).
To him, people feel super special when they have a so-called insider deal. A membership today ranges between $60-120 bucks, and to make that money back in deals, you’ve got to spend some money. Maybe Price had the right idea, though. Costco is doing well, even in an Amazon world.
Well, Price has an answer for that, too: “I was adamant that we would not have signs telling people where things were because it would make it likely they’d wander through the aisles and find other things to buy.”
At this, the NPR interviewer actually says to Price, “That’s a little devious.”
“I agree,” Robert Price responds. “It was manipulative.”
According to Price, they never really wanted people to come in all the time. It’s better, he explained, for the store to have people come in every once in a while (versus all the time) and buy way more stuff at a higher price point.
It’s also a giant store with a fairly limited selection, NPR pointed out. Price has an answer for that too. He says more selection equals more labor. For instance, if you go into the grocery department, there are a bunch of bulk options. That’s because the store pays less to have an employee just place a bunch of boxes down, versus setting up a bunch of different products on a display.
Oh, and they don’t have bags either. Because bags cost money — and if you have bags, Price says, you risk looking like a retail store. Again, they want to look like a speakeasy — a cement-floored, pallet-covered, charge-you-to-get in-but-not-give-you-direction speakeasy. Sexy, right?
According to Business Insider, Costco employees have some tips to navigate their not-store store: Go in with your membership card in hand, sales items tend to be at the end of aisles, similar items tend to be put together, items with asterisk-labeled tags are on sale or going away for good.
The front entrance tends to lure people in with expensive stuff, while the middle of the store offers more deals (so you have to actually walk around to find them). The back of the store is where groceries are kept (again, so you have to walk around), and the outside perimeters are where you might find household items like paper towels. You’ll get there after you walk around the entire thing looking for something and buying something else.
Well, we’ve got you now, Costco! And next time, we’re coming prepared. And by prepared, we mean prepared to play… arcade games?
Or maybe we’ll buy a massive amount of wine, and hope it doesn’t all explode in the middle of the store. Yikes!
Or a dozen bags of bread. Bread is yummy.
Costco even has sofas! After walking around the labyrinth of their store, it’s probably a good idea to have some out for weary shoppers:
But are you a member of this retail-cum-speakeasy. Get your membership cards ready at the door!
Look at this Costco grocery haul. Note the Godiva.
Is your dream to be surrounded by thousands of cheap donuts? Us, too.
And to make things even more ridiculous — or awesome? — Costco sells small race cars. Get your helmets on, kids!
They even make cake! (We swear this isn’t a Costco advertisement.)
Do you shop at Costco? And more importantly, have you mastered the store layout?
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