Everything comes to Costco stores in pallets, they don't do shipping boxes.
With the exception of certain times (e.g. Christmas) or certain books (e.g. Spare), they don't sell enough of any given book to have a pallet in the store for that book.
Mixing items/books on a pallet is a dumb idea. With single product pallets, you replace the pallet once its empty with another pallet. If you have two items in a pallet with one sold out and another barely sold any, what do you do?
If you are a fan of the business side of companies, I highly recommend The Acquired podcast. They go deep into the history of (mostly tech) companies and analyze the strategic choices made along the way. If for nothing else, the enthusiasm the hosts bring to the discussion is infectious.
Unlike advertising in other places, where you're often getting something for free, sadly that's not the case in retail media. Consumers gain nothing from it. It doesn't make products any cheaper, actually makes products more expensive. Manufacturers are pitted against one another, and whomever pays the most gets the most prominent ad placement and higher placement in search results. Manufacturers pay for it, and pass that cost onto the consumer. Then search results are skewed in favor of the manufacturers who pay the most. The only winner is the retailer. Everyone else loses.
Really? If I saw an ad for a product that is 20% more expensive than the organic result, I wouldn't click on it. Price is way more important than page placement for most consumers.
Completely annoying. I can't imagine any legitimate reason for disabling paste, and I work in cyber security. (There are poorly thought out reasons for disabling paste such as trying to discourage bots, but those sorts of attacks can easily work around such "security" measures.)
I have their CC shop there every now and again. Don't most stores either do this themselves or sell the data to bigger data brokers? Not saying its not an evil practice in general, but their actions don't seem to be an outlier?
It's definitely not uncommon but Costco has a reputation for being pretty pro-consumer so many probably find it surprising. As far as I'm aware Trader Joe's is the only big US chain not selling customer data at this point.
Just about everyone does, and has for the decade since store "rewards" cards became ubiquitous.
I am stupefied to find out Costco is this late to this party. I don't even like the party, but it makes me worry about their leadership's awareness of...the entire world? Without some principled reason not to have done this sooner, it's just an awfully big ball to have dropped.
I’ve heard anecdotes about Costco’s leadership being principled, especially relative to what you’d expect from corporate execs.
I may be misremembering but iirc during a call with investors they were asked why they hadn’t been raising prices like everyone else is and the response was basically “because we don’t need to, so we won’t screw people over just because we can”.
Eh, they probably aren't that principled, but rather they are just very aware at what their brand is. Costco makes it's money on people thinking the big business loves them as they pay $40 for a bottle of turmeric pills, while the gallon jug of turmeric costs $20.
Meanwhile Costco's entire business is based around negotiating a large profit cut for name brands, and letting the consumer in on a tiny percentage of that profit cut. For most things, Costco isn't even that significant a discount anymore.
There's the famous story of the Founder in a meeting supposedly telling the CEO "If you increase the price of the hot dog I will fucking kill you"
If this actually happened, it's because the CEO knows that the $1.50 the hotdog costs is essential to the brand, and not because he has any belief about how much a hotdog should cost.
Check out Costco’s stock performance over the last 10 yrs, compare to Target, Kroger, Walmart, let me know which you would rather have owned. Hard to complain about dropping a ball while wildly outperforming their competitors.
Maybe selling user data to third parties is a short term profits at the expense of long term strategy?
I think they're kind of damned if they do, damned if they don't now, from my perspective. If they had a principled reason not to do it, I'll think less of them for doing it now, and if they don't, I'll think less of them for not doing it as soon as possible, since they can't go back in time and do it sooner.
Granted, they probably don't care at all about my opinion, and they shouldn't, given that I'm one random person who doesn't live near a Costco and doesn't have the space to store bulk purchases for one even if I did. I just think making this choice now reflects badly on them either way.
You missed the point. They’ve been an order of magnitude financial out-performer compared to their main comps without it.
Sell your customer data, and you give your suppliers and competitors your insider info and competitive advantage.
I would assume whatever they are building is focused on protecting their customer info, not based on principle but simply on… that’s their treasure trove.
This is the "damned if they do" side. I don't care what the principle was that kept them from doing it. "We'll make more money over the longer run if we don't do it" is a totally valid principle in my book.
But if that's the case, then I'm looking down on them for throwing that away in favor of short-term gain now.
Unless they can point to something specific and say, "Our reason was X. Now Y has happened, which makes X now an inferior strategy to Z, so we're doing Z now," they either should have done it sooner or shouldn't do it now. I don't see anywhere they're pointing at any Y that has happened.
I’m always confused by single retail businesses trying to sell data (completely different story for financial institutions, airlines, ISPs, etc). I’m not sure what I could but at Costco (excluding the pharmacy) that would be remotely relevant to somebody?
Many members also get the credit card/member card. Which means they've also done a credit check. Memberships probably also have age and gender info which is useful for tracking against purchases. The membership model also means it would be really easy for them to add certain allowances for data collection (eg, in-store surveillance tracking to see where certain age groups go in the store and where they linger and what they look at.)
I guess, but I feel like Costco is not a sole source shopping experience but rather a supplemental one. I try and buy my gas there since it’s definitely cheaper, I do t think you could infer a great deal from my driving habits by my purchase history
We shop at Costco every week. And 2-3 times per month we need to go somewhere else to get garlic / bananas (our Costco has Del Monte bananas which... I don't like). Our previous one near Thousand Oaks had Dole which were significantly better.
But overall, meat, lettuce, etc comes from Costco.
Ad markets are horribly inefficient / thin on info, even in the efficient case*, that its absolute solid gold to know that ex. you purchased baby formula once a week for the last 6 weeks.
* this is proxy grumbling about codecov.io ads appearing everywhere for a couple days every time I visit the site...but I've been a paid subscriber for 6 months
Sometimes I wish I could think this innocently that I was unable to consider all of the nefarious ways people could use the data they have access to about you. Once you've peered in to just how accurate their inferences about can be, you loose one of your horcruxes.
Retailers know what you bought from them and how much you spend with them. Costco has a better picture than most other retailers because of the membership model, but really all retailers engage with this. Knowing, for example, that a customer buys diapers, eggs, and milk once a week may be valuable for an advertiser trying to target specific demographics (like parents).
> The founder of Costco told a CEO who wanted to raise the prices on Costco's hot dogs: "If you raise the effing hot dog, I will kill you. Figure it out."
Not only are the hot dogs cheap as hell, they're honestly not that bad. It's not a gourmet hot dog or anything, but despite being basic they're pretty decent quality.
The burps afterwards are pretty gross, though, haha. But I haven't found a hot dog that has less gross burps. It's the cost of doing business, especially at Costco.
Except those apple chicken dog things, but they are not a proper hotdog.
This made me laugh out loud, because the first thing that came to mind when I tried to remember the last time I had a Costco hotdog was a Costco hotdog burp! And you're so right!
I love Costco here in the UK, but they don't do tech.
AFAICT their Android app is just an awfully implemented webview, I can't change the email address associated with the account, they can't link purchases made with my card in-store to those on the website, the list goes on.
I don’t understand this move. From what I understand, Costco doesn’t make much on sales, they make their money on the membership fees, which they get no matter what. Why do they need to manipulate customers to buy more stuff?
This is a disappointing and shady thing. You're getting a value loss now from your membership. Previously you had a membership that allowed you to use, and buy from the club. Now your behavioral data is being used to sell it to 3rd parties to remarket to you.
Correct. But you also can't expect an unaffiliated group of people to each individually decide to inconvenience or disadvantage themselves in order to punish bad behavior. The customers are the victims of an enormous power and organization imbalance here. If only there were some means by which the people could could all get together and decide on rules that benefitted them.
Yes, if only the US government could create some type of general data protection regulation (they could call it GDPR for short) that would reduce the abuse of personal data...
> If only there were some means by which the people could all get together and decide on rules that benefitted them.
That's not been very effective in tech recently, has it?
People have control over whether they enable the surveillance capitalism grift when they are used as means to an end. They can make this business model proliferate much less, so that much fewer companies are built around it, and other business decisions are relatively more profitable. We can all not use apps that track us, clear our cookies automatically when the browser closes, use E2E encryption in communications, and so on. And yes, many people can also not shop at Costco. And many will make that choice, but not most.
You know, society has always managed to enforce the social order without the need for government — to decide together what is acceptable and what crosses boundaries. For at least tens of thousands of years as pre-chieftain egalitarian communities, and ever since. Culture exists as a concept, people can develop a privacy-conscious culture and in some regions of the world, it exists more than in others. Government as a concept is more recent. Big micromanaging government, even more recent.
You just need to not be lazy and do the work, not expect that someone else will come and solve all the problems for you. Of course, people have become quite complacent these days. They don't set boundaries if it's more convenient for them in the moment. But culture is more effective than government in dictating what is right and wrong, except for autocracies. Some have been very effective in imposing a social order. But I don't think we need to go there. People can self-manage. The question if whether people want to self-manage or if they prefer the consequences of not doing so.
I think coordinating the norms of a foraging troupe all with a similar understanding of their environment and society through individual action is a little more tractable than coordinating the norms of an economy consisting of millions of people with wildly varying levels specialization and knowledge.
Yes it is more tractable. But cultures that have norms for what’s acceptable and not exist all over the world.
For example, the culture of data privacy exists in some European countries more than in the US. Laws like GDPR are a result of this culture, they are not dictatorial imperatives going against what people want and practice in their lives.
The people usually set the norms. The law only enshrines them.
Yes, they do individually chose to use social media. But fewer do. And those who do, use social media less. It is a cultural difference with very little government guidance. And it makes a difference in how profitable this business model is here, as well as what laws are passed in the EU.
Yes, I agree with naturally arising collective action through culture. I argue that this may be all we need and we can do just fine without government intervention. I don’t think government intervention can be as robust as cultural norms, anyways. Tech companies constantly find ways to dance around laws. They can’t dance around their primary source of income choosing not to be exploited.
And this doesn’t have to be all-or-nothing. As more people will value privacy, a culture will develop that will reduce exploitative business practices like surveillance capitalism. If fewer people will value privacy, a culture will develop that will enable their exploitation. It’s gradients.
I don’t think that’s the case. People do care if they find out, which is the reason these things are usually some combination of buried in legalese, opt out (rather than opt in) unclear that you can opt out of or not easy to opt out of.
Edit: For example, in order to opt out without a membership you need to provide your street address.
> If Costco passes this revenue down to consumers
If they explicitly offered to pay people cash to track them, uptake would be nowhere near 100%. And this isn’t even as good as that, since as you say the payment would only be in the form of coupons which may or may not materialize.
putting aside the heinous concept of a "charity" as their existence enables just this sort of parasitic behavior, the faith that people do not expect Costco to reflect their best interests or work in our collective favor is exactly why I think people will inevitably turn their back on Costco.
I've had a Costco membership for over 20 years. I'll be letting it expire when my yearly renewal runs out. My privacy is worth more than the insignificant discounts they provide anymore. I hope I'm the first of many that leave.
I don't disagree with your actions, but make no mistake: you won't be the first of many. Unfortunately the market has shown us again and again that people a) don't look deeply into the business model and mostly care about price, and b) even if they did bother to look into it they don't value privacy. I wish it were otherwise, but sadly it just isn't.
You can try to manage perception as much as you like, but the facts are: Many people value there privacy, and will dump companies that abuse the privilege of purchasing products from them.
Seems like an insignificant enough number of people that companies will continue to make the choice to sell your data rather than appease privacy conscious individuals.
fwiw, the most beneficial way of doing this for Costco is also relatively private. That is, companies tell Costco who they want to target and then costco shows the ads on their behalf. This maximizes value for Costco because advertisers have no alternative to paying Costco each and every time they want to show an ad. It also mostly prevents data exfiltration.
