1. Presented By: Kate Ammerman, Darien Buc, Rachel Hess, Tim Johnson and Tara Van Winkle

3. 4th Largest retailer in the US

4. 7th Largest in the WorldWholesale Club & Warehouse Industry: - Industry estimated to be $110 Billion total - Industry growing 20% faster than retailing as a whole.

6. Sam’s Club: 36% share

7. BJ’s Wholesale Club: 9% share

8. Annual sales per store average $128M

10. Secondary Competition:Retail Discounters: Wal-Mart & Dollar General General Merchandise Chains: Target & Kohls Low-Cost Specialty Stores: Lowe’s, Home Depot, Staples, Best Buy, Circuit City, Barnes & Noble

12. $534 Million in E-commerce Sales

13. In 2006 Costco owned 80% of their stores land and buildings.

16. 100% satisfaction guarantee warranty on every product & membership fee.

17. Provide ecologically sensitive products

18. Provide the best customer service in the retail industry

23. High employee retention (6% turnover rate)

25. Operating Efficiencies created by product selectivity & volume purchases, high sales volume, efficient distribution, reduced handling of merchandise/ stocking methods

26. High Productivity of well compensated employees

29. Constructed inexpensively (concrete floors).

30. Merchandise stocked on racks above sales floor.

31. Products displayed on pallets containing large quantities.

32. Reduced labor required for handling & stocking

33. Shorter hours of operation

35. 9 Cross-docking depots

36. Receive container shipments from Manufacturer

38. When merchandise is received it is moved straight to the sales floor.

39. Eliminating inventory holding costs and Labor costs of handling and stocking merchandise These distribution efficiencies allow Costco to lower overhead costs and pass on savings to customers.

41. In charge of effectively merchandising treasure hunt items.

42. Orchestrate in-store product location & displays that maximize sales and quick turn over

44. 14 % Cap on the markup of brand name merchandise (compared to 20-50% at other discounters & retailers.)

45. 15% Cap on the markup of Kirkland Signature products.

46. Designed to be equal or better quality than national brands.

48. (compared to 150,000 to Wal-Mart & Target).

49. Limiting selection in each product category to only the fastest selling models, sizes, and colors.

51. Entice shoppers to spend more by offering irresistible deals on luxury items because they know they won’t be there next time.

52. Purchased on “Grey Market” for lowest prices.

53. Example: HD TV’s, luxury handbags, diamond rings

55. To compete with other Warehouse retailers for superior Service offerings.Costco Currently Offers:

60. Furniture is one of the Top 3 best-selling categories on their website

62. Not allowing the use of Credit Cards limits customer expenditures.

63. Top of Mind Awareness levels decreased by lack of Brand Advertising

67. Receive a 2% rebate on purchases (capped at$500).

69. Recommended: Allow The Use Of Credit Cards

71. Awareness & Reminder Ads

72. In the Northeast and West Coast regions

73. where locations are clustered in order to receive marketing efficiencies

75. Increase the frequency of customer visits

76. Benefit members by offering multidisciplinary services that are efficient and cost-effective

77. Making Costco a “One-Stop Shop”

78. Competitors Offer a Wider Range of Ancillary Services:

80. Sam’s Club has taken the Pioneering Costs of introducing Warehouse Retail into these societies

81. China is predicted to have a five-fold increase in urban consumer spending over the next 20 years to $2.3 trillion a year.

82. Continue testing furniture offerings in Costco locations rather than Costco Home.

83. Halo Effect achieved when furniture is offered inside existing stores