Costco’s hotdog is famous, and not just for the taste. It’s that juicy $1.50 price that’s remained unchanged since the 1980s. Although it’s a beloved product, there are many more strategies that Costco (COST) employs to turn people into diehard fans.
Fortune Editor-in-Chief Alyson Shontell is a self-proclaimed fan, telling Yahoo Finance Executive Editor Brian Sozzi how impressed she is: “The psychology that they use to turn you from a casual shopper…into rabid enthusiast that marches to their store and spends hundreds more than you ever anticipated.”
Costco is one of many companies holding strong on the newly released Fortune 500 list, including Walmart, Amazon, and Apple in the top three.
Watch the full episode here.
Video Transcript
Inside the cult of Costco.
Uh, this is a company that just makes a lot of money.
I mean, the amount of money they pull in for membership fee income.
And it’s so strange to see Costco still doing so well at a time where Walmart is killing it, which is something you could see because their number one company on your list.
Yeah, Costco is incredible and completely masterminded.
I mean, really the psychology that they use to turn you from a casual shopper who’s like, what is this Costco thing into rabid enthusiast that marches to their store and spends hundreds more than you ever anticipated filling your bathroom things.
You don’t even know what can fit in your car.
Um, it’s really simple and it’s all incredibly awful.
I mean, really they, um, their Kirkland brand, if it was a stand alone company would be on the list.
I mean, it, it’s massive in comparison.
They’re expert at picking just like one or two items for everything so that you don’t have kind of like analysis paralysis as you’re perusing the shop.
Like which of these 20 ketchup should I buy?
They’re like, no, we’ve got like two for you make it eat.
They also have no signs.
Yeah, they’re brilliant.
They have no signs on anything in the aisle so that you have to go around and look at every single thing.
Um, they’re just very thoughtful about it and it’s an executive team that’s like, you know, really into the numbers and really into the data and really into the enthusiasm of building this brand.
Um, down to how much inventory they will or won’t buy, they buy things early.
You’ll see flip flops there way earlier than you will in any other store.
Um, and they over January.
Exactly.
Exactly.
Um, so their inventory purchasing is an interesting strength as well.
It’s just a really brilliant marketing company.
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