I’m the sort of person who isn’t used to special treatment.
Despite having traveled all over the U.S. and globe, I’ve never gotten to fly business class. I’ve also never gotten upgraded to a hotel suite or anything of the sort.
So when I walk into Costco these days, it’s kind of a nice change of pace.
As an Executive member at Costco, my $130 annual fee gives me access to a number of perks regular Gold Star members don’t get.
For one thing, I now get a $10 monthly credit on same-day grocery orders of $150 or more. Granted, I’ve yet to use that perk, but I know it exists.
I also get to enter my local Costco warehouse a full hour earlier than Gold Star members, which, as a hater of crowds, is a big deal to me.
But as nice as that early shopping hour may be, a lot of Executive members are finding that it’s starting to backfire. That was my experience this past week, and I know I’m not alone.
Early shopping hours for Costco Executive members have pros and cons.
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Shopping early at Costco isn’t as convenient as it could be
The whole benefit of getting to shop early at Costco is having a smooth experience from start to finish. If there are fewer people in the store, it should mean smaller lines and not having to wait too long to check out, right?
Well, the last time I got to Costco at 9 a.m., which is when the store opens for Executive members, I was met with a huge line at the entrance of people waiting to get in. And it was cold, I might add, so waiting outdoors for even a few minutes was unpleasant.
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I wasn’t the only one who felt that way.
“The whole point of coming early is to get right in,” said George P., a fellow Costco Executive member from New Jersey who also wasn’t thrilled with the wait. “Instead, you’re just waiting with the people who pay more.”
Another problem with Costco’s early shopping hours? Executive members may get their run of the store, but the last time I went to check out at around 9:30 a.m., there were only two registers open. That meant – wait for it – another long line.
Costco’s strategy makes sense but needs adjustments
Costco isn’t wrong to take steps to please its Executive members. Those members generate the most revenue for the company, so retaining them is crucial.
But while Costco maybe gets an “A” for effort with all of the above, it gets a “B,” at best, for execution.
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This isn’t to say Costco’s early store hours have been a total failure. Data from Placer.ai show that the new hours have done a good job of spacing out crowds.
Following that change, in fact, the number of Costco visits lasting 30 to 45 minutes increased, while the number visits lasting 45 to 60 minutes decreased. This tells us that members are, on a whole, spending less time per trip at Costco.
But if Costco is going to take steps to cater to its highest-paying members, it really needs to see things through. That means opening up more registers earlier in the day and not forcing people to freeze outdoors when the store first opens.
As retail expert Warren Shoulberg told RetailWire, “This is yet another brilliant move by Costco…By treating its best customers best, it reinforces why you should be a best customer. Remember the supermarket chain that set aside a checkout lane for shoppers with more than 25 items while the competition was doing less-than-ten-item lanes? Reward your best customers and you’ll get more of them.”
And he’s totally right. But what Costco has done in practice is take checkout lanes away from Executive members who shop early, rather than take steps to get them out the door faster.
If Costco aims to treat its Executive members like royalty, it needs to finish the job. Otherwise, those higher-paying members may stop shopping early, leading to the same old crowds every Costco shopper dreads.
And, in a more extreme scenario, a perk designed to retain Executive members could be the one thing that actually gets them to churn.
Maurie Backman owns shares of Costco.