Costco, the $99 billion warehouse-style chain, is the third-largest retailer in
ID: 325756 • Letter: C
Question
Costco, the $99 billion warehouse-style chain, is the third-largest retailer in the United States With low prices, low employee turnover, and steady growth, the company would seem to be an all-around success. It even boasts above-average survey scores on the quality of the shopping experience and customer service in its more than 600 stores worldwide But Costco is playing catch-up online, a sector that's growing faster than in-store retailing and where nimble competitors like Walmart hope to gain most of their future expansion. A rarity in store retailing because it has been profitable since day one, Costco has big plans for boosting its e-commerce business, but it has also missed some opportunities Costco.com takes in about $2 billion a year with a broad assortment of products that are not always found in the stores. These range from electronics and lawn furniture to caskets and pricey diamond jewelry (delivered by Brink's). The convenience of free shipping and assembly are usually included. Most of Costco's online customers are a bit more affluent than customers of the warehouse stores, and their average purchase But despite being a brick-and-mortar presence in eight countries abroad, Costco currently limits its online operations to the United States and Canada. Critics have also found flaws in the company's online marketing efforts. Customers are not always aware of the product variety online, nor do they realize that the special offers outlined in the company's emails, which go to about 12 million registered customers, promote products unique to the website. Another problem is that products on the website don't readily turn up in shoppers' search engine results because of the way the website's pages are named, a condition Costco hopes to improve via the technical process of search engine optimization. The website also isn't as user-friendly as it could be, say critics, with "rookie mistakes" like visual clutter and poorly labeled photographs. One search engine consultant said the company's online division is "undoubtedly leaving some sales on the table." tend to be bigger tooExplanation / Answer
Costco, as mentioned in the case, has a good marketability and growth in US, however it is lacking its growth and profitability when it comes to globalisation. there are several reasons that why Costco should improve its online marketing, but the main reason to do this is higher profitability and bigger opportunities in these markets.
Costco, as it is already a successful brand in the States, it is easier for Costco to build credibility in different markets as well, however Costco priority should be to value its customers demands and satisfied them with the day to day needs.
Also Costco, have a concept of low price and offer low prices in global market, it should continue doing that for its online marketing as well to increase the demand of the product.
Costco should also, instead of going for a private club thing, where only members can have the benefit of it, should go for acquiring more customers in developing countries, where there are more opportunities to increase its revenue.
When talking about the promo shares of the offers with its customer, Costco needs to send a clear mails to its customers, so that one can not miss the opportunity to grab the offer and make use of it. And also Costco needs to make its site as robust as possible so that customers can easily access the site and make there purchase online.
In my opinion, Costco has good opportunities in global market, however it has a huge customer base in US and Canada, and the company does not want to loose its customer and so company should first focus on the improving sales in the local market first and then go for other markets.