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Costco's Plan to Lure Millennials
By: Maryann Fabian
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On a second-quarter conference call with analysts last week, Costco execs said they were trying a new strategy to reach Millennials that has a lot to do with kale and clicks. When specifically asked how it was going to “get younger people into the warehouses,” CFO Richard Galanti told investors, “We’re not going to do anything rash but we’re also not going to have our head in sand here.”

This should make for an interesting case study. As demographics shift, we’ve seen many retailers reaching out to attract younger customers — some successfully, some not. Nordstrom’s strategic acquisitions and digital media savvy helped it score. L.L. Bean stumbled into a trend when its 100-year-old boot became winter’s must-have that sent sales soaring. J.C. Penney just stumbled.

Costco, however, is a bastion for the suburban soccer mom set.  But then, she has room in her McMansion to store vats of condiments and enough toilet paper to criss-cross the country twice. While probably not averse to saving money, Millennials tend to live in smaller spaces without much storage, such as an in-town loft.

Part of Costco’s plan to lure the young includes stocking more organic foods. Galanti said organic shoppers “tend to be a little younger” and buy “giant packs of kale.” but this should appeal to more than the Millennials. Organic food production increased about 240 percent in the last decade and sales are expected to grow about 14 percent over the next five years, so this is really a no-brainer.

In San Francisco, Costco is testing same-day delivery with Google Express to help compete with Amazon. This could help combat the location-challenged young people who tend to live in cities and find Costco’s ‘burb-bound stores a bit of a drive.

The company also plans to increase its online presence. It currently has 1.1 million Facebook fans. Last week, it posted a cute new “member spotlight” on its Facebook page featuring “Ethan, who is excited about the privileges of turning 18. He can now join Costco!” Ethan’s “must-haves” are “anything that microwaves (Hot Pockets, frozen pizza, Chicken Bakes and Top Ramen).” Check out the Vine video of Ethan, too.

Do you have any thoughts on how to woo the younger demo? 

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About the Author
Maryann Fabian is a copywriter who has crafted the voice of some of this country's best brands.
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