"I always - always - spend three times as much as I originally planned," says Jacqueline Williams, who shops every other week at a Costco in suburban Detroit and marvels at the chain's ability to sell pool chemicals, khaki pants, and fresh flowers at prices as much as one-third less than other retailers. "It never crossed my mind to worry about paying the membership fee. I make up the difference in just one trip."
Costco has bred this sort of loyalty in any number of ways, including its emphasis on value as well as price, and by providing acceptable customer service in an essentially self-serve operation. Few employees walk the sales floor, save those dispensing free samples, but merchandise is easy to find, it's well displayed, and checkout lines usually move quickly.
But the most significant part of Costco's approach is what the company calls the treasure hunt. Customers can walk in intending to buy a couple bundles of diapers, and walk out with Waterford crystal, a Tommy Hilfiger shirt, or a Fila warm-up jacket (and, as every single one of them will insist, at a fraction of the cost elsewhere).
Visiting Costco is a treasure hunt because each trip is different. Those $22.99 Calvin Klein jeans piled high on a display table probably won't be there next time. Each Costco carries 4,000 items, and about 1,000 of them change regularly as part of the treasure hunt philosophy. Says Sinegal: "Retailing can be show biz, can have sex appeal, and that's what we try to do. Too many retailers dumb down to their customers."