Real Costco Shopper Costco Shopper

Real Costco Shopper

Costco Shopper Analysis

In the case study, Will the Real Costco Shopper Please Stand Up? The merchandising, pricing and promotional strategies of the world's leading mass merchandisers are compared. Costco is unique in its approach to a more targeted, streamlined of product selection relative to its larger, more diverse competitor Wal-Mart. From the case analysis it can be inferred that the entire value chain of Costco is significantly different than competitors, beginning at the supply chain level. While Wal-Mart's core shopping base is the Price Value Shopper that has an average income of approximately $45K and is the most loyal segment of their customer base (WalMart Investor Relations, 2013) the other 84% of shoppers at Costco's largest competitor are higher income and more eclectic, even selective, in their retail store loyalties. Costco has been able to capitalize on this higher-end segment by streamlining their supply chain while also concentrating on a broader mix of higher-end products as well (Serpkenci, Tigert, 2006). This strategy has given Costco the ability to attract an upscale customer base that has incomes significantly above Wal-Mart's (WalMart Investor Relations, 2013).

Analysis

The Costco customer base is upscale, more educated and has a broader cross-section of ethnicity compared to WalMart. WalMart's won internal competitive analysis has shown the mass merchandisers sees Costco as a threat for the aspiring buying segments that the global retailer is just beginning to attract with higher-end electronics products (WalMart Investor Relations, 2013). WalMart's low price everyday value proposition is one that attracts the Price Value Shopper and makes them exceptionally loyal as this segment looks to WalMart to help them makes ends meet on a periodic basis (Cascio, 2006). This same value proposition isn't working as well with the Costco shopper who seeks higher-end more unique products. This can be seen in the case, and gaps in the product strategy at WalMart (Serpkenci, Tigert, 2006).