Wednesday, May 1, 2013

THE COSTCO EFFECT

The title of this post refers to the propensity by some shoppers to buy a six month supply of something because the price is so good.  I'm not a Costco shopper.   I went into the store once, maybe fifteen years ago, and was given a one day pass to try it out.   At that time, the idea of paying to shop seemed repugnant to me but many others have paid the annual membership fee.

My impression of Costco then was that products were located in any location so that roast beef was next racks of jeans.   The other thing I recall was the size of the packages.   Boxes of Oreo cookies were the size of jumbo cereal boxes.  Sure, the unit price was less but somehow I predicted the savings would be lost in excess consumption.


                                                               



It's a little like the free e-books out there.   Kindle owners--or owners of other e-book reading devices--can find it difficult to resist 'free'.   Some of them have thousands of free books loaded on their devices.   Will they all eventually be read?   How many other times do you see free things?   Two for one--yes; fifty percent off--yes;  even air miles or other loyalty points--but free?   Not so much.   I recently read a book called Overdressed; The shockingly high cost of cheap fashion in which the author bemoaned the over-consumption and disposability of cheap clothes.  Women are buying multiple versions of the same item because of the low prices.   Now just imagine if they were free!

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