Costco (COST) – Needs Customer Focused Perspective

Before attending yesterday’s Chicago Cubs game upon a surprise invitation from my friend Pat Cunningham, I went to Costco. Before I talk about that though, the Cubs played the San Francisco Giants and Barry Bonds hit his 728th home run, he is now only 27 shy of Hank Arron’s record. You will notice that the ball thrown back on the field was not the actual home run ball per this ESPN Video, you wouldn’t have noticed it if you were at the game though.

During this Costco visit, they had recently redesigned the store layout, so much so that I simply gave up on a few of the items I was trying to find. As I waited in the checkout line I wondered if my actions were signing the death warrant for these items I skipped because all the buyers for Costco never look at these issues when they make their decisions. It’s clear that the company is moving away from its’ roots, providing excellent value. Every time I turn around something is being replaced with a “superior image product” that costs significantly more. The membership isn’t as valuable to me as it once was due to this continuous series of actions. The constant brand swapping can drive any serious food lover to near insanity when they find a brand they really like and then it’s replaced by an inferior brand by Costco’s buyers. 

Two examples: 1. Earlier this year the Costco Lincoln Park Chicago location had these awesome Palmiers (somewhat like these) for several months, they moved them around the store no less than four times and they are no longer stocked – I firmly believe this was due to the movement factor affecting sales.

2. For what seems like forever, Costco carried New York Style Texas Garlic Toast in large economy sized boxes. Then a few months ago it stopped and replaced with a package of garlic bread in loaf form, not useful for sandwiches that was a fraction of the size and cost more! OK, one this one it’s clear the buyers have no clue how and why they choose certain products.

On my way out the door, I stopped and talked with the store manager, Brian. We talked about how the Customer’s viewpoint is never taken into account by the buyers. In fact, I showed him sympathy because he isn’t empowered to fix these issues or even experiment with such things as express checkout.

Costco is an example of an organization that would benefit greatly from blogging, but blogs should be the last and not the first step I now believe. The first step is to change the organizational focus so that customer’s voices are heard as loud if not louder than Wall Street’s voices.  Without this dramatic top-down culture change of action, not words in regards to customer focus, then they would be a great blogging candidate to put the effort on steroids. I pitched to Brian the idea of having the buyers come into his store on a Saturday to actually listen to customers for a full day preceded by a 4-week period of pre-announcement – I told him that the store would likely have its’ busiest day ever and that this would be a very eye opening event for the buyers. I asked him to escalate my request for such an event internally so that this could occur and offered to e-mail him my blog post to save him time in explaining and communicating the idea during our brainstorming discussion. Maybe one day Costco might even create the role of Chief Customer Officer, I would love that!

Good Luck on creating that buyer visiting day, Brian. The blogosphere and customer champions everywhere will be routing for you.