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Who is the typical Costco shopper and why does it matter?



A study from Numerator recently revealed what they found to be the typical Costco member. The Costco Packaging Guys always find this type of information insightful.


In this blog, let's dig into:

  1. Numerator's findings on a typical Costco member.

  2. Why customer loyalty is so important to Costco.

  3. How can we use this information to improve packaging design for increased sales.

Getting right to the study:


According to Numerator, a typical Costco member is

  • Asian American woman

  • 35 to 44 years old

  • Married

  • Typically has a four-year degree or higher level of education

  • $125,000/year income

  • Visits Costco on a weekend day every two to three weeks (23 trips per year)

  • Buys 9 products

  • Average of $114 a trip.

  • 11% of the average Costco shopper's spending is at the wholesale club (similar to Amazon) Typically buys groceries and personal-care items.


Although the Numerator study doesn't address male shoppers, a 2019 study shows that men prefer the Costco treasure hunt too.


In relation, a typical Walmart customer is far different

Numerator also found the Walmart's typical shopper in the US is:

  • White woman

  • 55 to 64 years old

  • Married

  • Typically has an undergraduate degree

  • $80,000/year income

  • Visits Walmart at least once per week (63 trips per year)

  • Buys 13 products

  • Average of $54 per trip.

  • 13.5% of her spending takes place at Walmart (11% at Amazon) and typically buys groceries.


Why are higher income, loyal shoppers critical to Costco

From its inception, Costco marketed to businesses, governments and hospitals. Why? These were a consistent, stable source of income.

Originally serving only small businesses, the company found it could achieve far greater buying clout by also serving a selected audience of non-business members.

Once Costco opened its membership to the public, they targeted affluent, typically college educated customers and charged a membership fee. The magic of Costco has been their success retaining loyal members. In 2020, 91% of members in the U.S. and Canada and 88% on a worldwide basis of members renew annually. This accomplishment has so much to do with Costco buyers being highly skilled at selecting products which members not only want but, can offer members at an incredible value.


The US, a Gold Star Membership is $60 per year and $120 for Executive Membership.


According to Costco, while Executive members make up just 36% of the member base, they account for about two-thirds of overall sales.


What can we do with this information to improve your packaging?


In general, our formula for tried and true great packaging at Costco doesn't change. Continuing to follow all tenets of the 5x5 rule:

  1. Member value statements

  2. Product is hero

  3. Structural compliance

  4. Shoppability

  5. Sustainability


What this type of study reminds us is that Costco members are higher income, expect high quality products and shop at peak traffic times. The packaging we create must appeal to this demographic, scream value and command attention.

Considering thoughtful details on packaging materials, structure and printing will have a direct reflection on your product sales.


Strong clearly visible value statements, a refined use of color blocking, minimal structural lines, efficient (non-filler) pallet layouts and a prioritization of product over brand are all critical for success.

Packaging is not just a means to distribute the product. Packaging is critical to not only attract but, ensure your product ends up in one of the oversized Costco carts.


For more info on how we can assist on with the packaging of your product, please each out.

Until next time.


Cheers,

TCPG








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