Costco is coming with new strategies this year. Our favorite chain of savings and giant carts has found an unexpected gold mine in luxury products, yes, Costco, and yes, we are talking about Rolex watches, multi-carat diamonds, gold bars. Things that most people are not very used to seeing and that, of course, do not quite fit the image we have of Costco. But it is working, and very well.
The key is that they are offering premium quality at a fairly modest price, for a Rolex, so they never lose their essence.
Luxury also shops…
There is more and more difference between salaries, right? And it is strange, because while many people are cutting expenses and counting every cent, there is another group that can continue spending double or triple. High-income consumers look for value, trust, and a clear feeling of “I made a good purchase”, and Costco has known how to read those “needs”.
It turns out that a not so small part of its members belongs to that profile, loyal customers with high incomes, who enjoy finding something unexpected between toilet paper and cereal boxes. And when that “something” is a luxury watch or a diamond, they like it even more, of course.
The “treasure hunt” effect
Shopping at Costco means never knowing what you are going to find, and that is where its magic lies. It is a treasure hunt feeling, and when the treasure is a Rolex in a display case, you can imagine the excitement. And we are not talking about showing off, but about opportunity, because it is not just buying expensive, it is buying better, only for a few who can afford it, of course.
Rolex, diamonds… and gold bars!
Of course it has not gone unnoticed. Rolex watches with 10-carat diamonds sell out in hours. With this, they want to show that Costco is for everyone and that you can trust them even for big purchases.
“If someone wants to buy a $500 TV for $250 at Costco, we want to sell them a $1,000 one for $500. We are always looking for better items for our members, offering them great deals. We are not a one-dollar store, not at all”.
A more visible customer
It may seem like a radical change for the brand, but they are still the same. They just want to serve the “needs” and tastes of other customers with greater purchasing power. They want to recognize their membership as well and adapt offers for them too.
A sector that is watching
The retail sector is one of the most competitive. Many chains struggle to lower prices to maintain sales and serve their consumers, but Costco has decided to also adapt to the premium consumer, mainly because they can spend much more.
Can this strategy last?
Everything indicates yes, as long as high-income spending remains strong, but Costco cannot forget that the base of its business is those users who only go for the basics, because their salary does not allow for more. So they will have to find a balance between luxury and normality. They want any member to feel they get more for their money, whatever they buy.
More than luxury
They do not just want to sell expensive products, because they do not compete only on price, but on value. The economy is not going through its best moment, but they can reinvent themselves without betraying the brand, right? For some, selling luxury items and diamonds may seem like a contradiction, but it is just a logical evolution, capitalism really, so that the brand can adapt. After all, rich people also have the right to shop, right?