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Jan25

The ROMNEYS shop at COSTCO, so do the HENRYs

Categories // The Luxury Market

Reports that the Romneys shop at Costco NOT news to PMP readers

The ROMNEYS shop at COSTCO, so do the HENRYs

Costco stocks many name brands and gourmet foods that appeal strongly to the wealthy

Apparently in an attempt to show that the Romneys are not all that different from average Americans, the presidential candidate's campaign has made an effort to let voters know that the Romneys enjoy shopping at Costco (a quick Google search of "Romneys Costco" bears this out).

However, PMP author and Luxury Market expert, Pam Danziger explains that Costco is consistently the only discount retailer that attracts more ultra-affluent consumers (HHI > $250K) than lower-income shoppers (HHI $100k-$249.9k).

According to Danziger, these affluent consumers are excited by the hunt for name-brand bargains. They will put up with long checkout lines and the big-box format in order to get access to such a wide variety of quality items at deeply-discounted prices.

The fact is the affluent customers that Costco attracts are about the only ones in this economy who can afford to invest in a six-month supply of paper towels or toilet paper. Households on tight budgets can't afford to tie up so much cash in stockpiling supplies. In addition Costco stocks many name brands and gourmet foods that appeal strongly to the wealthy.http://www.parexcellencemagazine.com/components/com_jce/editor/tiny_mce/themes/advanced/skins/default/img/middot.gif);">http://www.parexcellencemagazine.com/components/com_jce/editor/tiny_mce/themes/advanced/skins/default/img/middot.gif);"> 

Costco's shoppers are absolutely addicted to the Costco experience. They shop regularly and often in order to see what's new, what's on sale, what's specia.

When it comes to attracting the affluent shoppers, it is all about the "80/20 Rule of Luxury Retail," which holds that 80 percent of retail success is in the experience, with only 20 percent coming from product. Costco understands the experience its target shoppers crave. Their customer base is absolutely addicted to the Costco experience and they shop regularly and often to see what's new.http://www.parexcellencemagazine.com/components/com_jce/editor/tiny_mce/themes/advanced/skins/default/img/middot.gif);">http://www.parexcellencemagazine.com/components/com_jce/editor/tiny_mce/themes/advanced/skins/default/img/middot.gif);"> 

Costco knows that its affluent consumers are likely to be small business owners who are acutely attuned to the mark-up that typically comes at high-end stores. Costco consciously strips away the frills that mean extra expense to these consumers and offers a bare-bones environment that says "savings." The large format of the store also offers the ultimate in recreational shopping - no one goes to Costco to get just one thing, and often they walk out with a cart full of bargains.

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