David Rosenthal: belief

Transcript context

…Right? It's crazy. Part of it is the addition of gas and other big ancillary items they're selling, but part of it also is just being really good merchants and finding these little things that members love, find value in, and doing little optimizations everywhere. Yeah. Exactly to that point, one of the famous aspects today of the Costco shopping experience is the treasure hunt nature of it. This is something that they've learned over time. The original Sol Price, Price Club business plan was just the 3000 core SKUs for businesses and then opening that up to consumers. Along the way, they realized that, hey, if in addition to the core staples we have, which pretty much don't change, we could change the brands, we could change the exact details of what they are, but we're always going to have nuts. We're always going to have chicken, stuff like that. If we have a small number of additional ooh, ahh, and wow, one time items, such that every time as a member you come into the store, there's something new and different for you to find and buy at a really low price, that would drive repeat traffic and make coming to Costco more of a novelty, more of an entertainment event. Today, I think about 25% of their SKUs are these treasure hunt items. I did not realize that. I know they've learned a bunch of things over the years. When they brought in fresh food for the first time, they didn't optimize the place in the store where they put that, but they still saw a huge spike because it drove repeat. When you have fresh food, people come in, they want to buy that, they add some other stuff. But they've been very clever in figuring out where to put it in the store to make sure that you have to walk by a bunch of other stuff to get them. The fresh food is in the back. If you're coming in for fresh food, congratulations, you get to see all these other cool things that our buyers have managed to find out in the world for you. Of course, you get some of those, too.…

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