2 Obvious Examples How Costco Leads By Example

COSTCO CLOSED FOR 7 HOLIDAYS

So I’m at the cash register the day before Memorial Day and I realize I don’t have all items scratched off my Costco list for tomorrow’s neighborhood picnic. I ask the cashier for their hours tomorrow and she says, “We are closed on Memorial Day. After hearing this, on some level, I’m pleasantly surprised to hear they close for the holiday where we honor our nation’s fallen heroes.

The next day, while I’m enjoying my holiday off from work, I type in ‘Costco’ in my search bar to see which holidays they close their retail business. There are 7 holidays listed: New Year’s Day, Easter, Memorial Day, Independence Day, Labor Day, Thanksgiving Day and Christmas Day.

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Costco Optical

I’m fascinated by this, in today’s world of uber competitiveness in the retail space, there aren’t too many retailers that are closed more than 1 day each year, let alone 7 days. Since then, I’ve talked to several Costco employees who state these days off are a perk management gives its employees. I wonder if Costco is a human-centered organization? It’s certainly appreciated by those employees I’ve spoken with and it’s quite a commitment by Costco to be willing to forgo that amount of business in order to give all employees those 7 holidays off each year.

I could be self-centered and say it’s inconvenient for me that my warehouse club will be closed for several holidays throughout the year but I won’t go there. I respect their policy as it makes a lot of sense to me. If management has carefully weighed the pros and cons to such a policy and agreed to provide this benefit to its employees, who am I to complain about my favorite store shutting things done from time to time? Besides, because I’m a regular, it won’t be difficult for me to remember this policy and roughly which days those Costco associates are out with family and friends enjoying their day off too.

Is that not leading by example in the retail space?

HOW IS GOOD EMPLOYEE TREATMENT MANIFESTED IN A RETAIL ENVIRONMENT?  

When I shop at Costco, if I’m treated rudely or ignored by a Costco associate it’s an anomaly. At Wal-Mart, the anomaly is being treated nicely or with empathy by an associate. My latest online research suggest the average per hour wage at Costco is nearly $21. At Wal-Mart, the average is less than $10. Some customers and retail analysts might say that Costco is a human-centered organization — one primary focus is on customers/warehouse members. However, let’s not forget their employees — perhaps it’s a balancing act between warehouse members and employees? Some might argue why would a company pay their employees much more than they have to. Isn’t capitalism all about what the market will bear? Why not pay the minimum or slightly above that amount? Does it go without saying that well paid employees are happier and more likely to respect their company and management and invariably some of this positive energy will be transferred to members.

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Costco Pharmacy and Cosmetics

It would be disingenuous to say that Costco does not have any turnover and that all Costco employees are happy. HR does not have to publicize hiring challenges — the hiring the right candidate is challenging and an inexact science. It takes a lot of time and money to find someone who has the right skill-set and the right fit for the organization. However, once Costco finds the right fit, their turnover is about 5% for those who have been employed for at least one year.

I enjoy shopping at a store where I feel comfortable. Which means, the employees have to be helpful and/or friendly to make me feel relaxed. It’s not uncommon for some customers to get to know their employees — especially if warehouse members patronize the same store. Happy employees increases the chances they are service centric and if customers and employees get to know one another or casually recognize each other, the relationship may be enhanced. When’s the last time that you recognized some in Wal-mart or Kmart who provided consistent, customer service?

It’s an over simplication to say that paying employees well is the key to successful retail. Having said that, it’s certainly a key ingredient in the success of Costco’s model.

Is that not leading by example in the retail space?

 

Kevin Schwarm

I have over 25 years of professional experience in business, information technology (IT), and customer service. Industry experience in retail, medical insurance, higher education, non-profit, financial services, and property and casualty insurance. Customer focused professional interested in providing value (save time, money and aggravation) by evaluating and analyzing information, services and products with a unique perspective.

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