Costco’s latest promotional offer just dropped, but members aren’t rushing to claim it. At select warehouse club locations, members can now take home free 3-pound bags of Gala Apples.
The shopping warehouseunique business modelwith membership fees largely contributing to its revenues, meaning it focuses more on connecting its membership rather than advertising specific products.Costcomakes significant efforts to encourage people to become members, or to upgrade and renew existing memberships.
In the past, Costco has offered enticing items like tote bags to entice customers to automatically renew their memberships, but the promotional bag of apples isn’t as appealing, according to one Costco member.
‘Giving away apples is like giving away white bread’they told TheStreet. “It’s fine, I guess, but not very interesting. It certainly won’t push me to do anything else.”
Costco has previously been successful in getting customers to upgrade to the Executive level, which is $130 annually, with customers earning 2% cash back on most purchases, compared to $65 for the basic level. For example, in June, Costco began unveiling a new membership feature that allowed Executive members to shop an hour earlier than regular members on weekdays and Sundays, and half an hour earlier on Saturdays.
The extra was generally well received. The company reported a 1% increase in sales at the end of September and Executive membership increased by 9%.said CFO Gary Millerchip.
That might explain why the apples that followed seemed to fall a little flat.
Additionally, Costco shoppers have complained about employees tirelessly approaching them about memberships.Another customer told TheStreetthat his membership makes sense for the amount he shops, but he remains under pressure.
“The last few times I went to checkout, I got the third degree about my membership,” he says. “It’s getting really old.”
Costco’s membership system has had that for yearshas served the brand well. But it’s clear that taking a few steps in the wrong direction can turn people off.
—Ava Levinson
This articleoriginally appearedabout Fast Company, Inc.’s sister publication.
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