The Luxury of Bulk: Costco's High-End Appeal
Costco moves a significant amount of luxury goods, with Rolex watches, gold bars, and high-end items becoming an integral part of its business. Weaker shoppers are willing to pay top dollar for these luxury items, which has become a major profit driver for the company. According to chairman Hamilton "Tony" James, Costco's focus on quality, pricing, and selective inventory sets it apart from competitors like Amazon and Walmart.
- The strategy of offering higher-quality products at competitive prices can be seen as a form of social welfare, where wealthier shoppers are able to indulge in luxury items while lower-income households benefit from the overall economic growth sparked by Costco's bulk buying.
- How will the increasing popularity of experiential retail among consumers impact Costco's long-term business model and its ability to maintain its competitive edge?