Costco Chairman Tony James reveals that the retailer’s success lies in offering high-end luxury items to affluent customers. Unlike many retailers who cater to budget-conscious consumers, James says that “affluent people love a good deal.” He mentions Rolex watches, Dom Perignon champagne, and 10-karat diamonds as examples of premium products that fly off the shelves.
James attributes Costco’s ability to attract high-income earners due to its focus on quality and pricing. The company has a history of watching consumer trends and adapting to changes in the market. For instance, when an affluent Porsche dealer placed his cars at a Costco location in Seattle, they sold out within a week.
While most of Costco’s members have average incomes, James notes that these high-income individuals allow the business to offer exclusive products. However, even with the success of luxury items like gold bars, James is unsure if affluent customers or people cautious about economic uncertainty are driving sales.
Overall, James’ comments highlight Costco’s unique approach to retailing luxury goods to a niche market. The company’s focus on quality and pricing has enabled it to thrive in an increasingly competitive market.
Source: https://www.foxbusiness.com/lifestyle/costco-chairman-reveals-surprising-luxury-items-fly-off-shelves-affluent-people-love-good-deal