- Costco is known as one of the few retailers to successfully stave off the threat of Amazon.
- The warehouse-shopping club beat out Amazon in a survey of customer satisfaction released by the American Consumer Satisfaction Index in February.
- With this in mind, we decided to dig deeper into the aspects of shopping that Costco does best.
- Here are nine occasions when shoppers might choose to shop at Costco over Amazon.
Costco is known as one of the few retailers to successfully stave off the threat of Amazon.
The warehouse-shopping club beat out Amazon in a survey of customer satisfaction released by the American Consumer Satisfaction Index in February.
"Amazon is great for finding individual items in an efficient and convenient manner, but in most cases can’t match the value bulk-pricing delivers, the full basket shopping experience, and the discovery component of going to a Costco warehouse club," Jack O’Leary, senior analyst at Edge by Ascential, told Business Insider.
With this in mind, we decided to dig a little deeper into the aspects of shopping that Costco wins.
Here are nine occasions when shoppers might choose to shop at Costco over Amazon:
Costco’s low-cost private-label Kirkland brand is one of its most valuable offerings. It has been around since 1995 and accounts for about 25% of Costco’s $118.7 billion in annual sales.
Kirkland is not only cheaper than other national brands, it also has a reputation for being good-quality.
"I am not sure there is another [private-label] brand that has established this level of trust," Timothy Campbell, a senior analyst at Kantar Consulting, told Business Insider.
Private-label brands have increasingly become a more popular choice as the stigma of "generic" goods has lifted. These brands have better margins for retailers are they are buying goods directly from the supplier and cutting out the intermediaries, which can drive up costs in the supply chain.
Amazon is also looking to grow its private-label offering across different categories. It currently has nearly 140 private-label brands and 406 exclusive brands, according to TJI Research. However, it doesn’t have the history that Kirkland has just yet, Rachel Dalton, director of e-commerce at Kantar, told Business Insider.
"They’ve had a lot of misses and some hits," Melissa Burdick, president at Pacvue, told Business Insider.
She continued: "Amazon has taken its typical approach to things to private label – iterate, launch fast, fail fast – which sometimes comes at the risk of one of their coveted leadership principles of ‘earn trust.’"
Generous return policy
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One of the biggest perks of a Costco membership is its generous return policy. The warehouse chain allows members to return almost any item at any time if they’re not satisfied with it.
"We guarantee your satisfaction on every product we sell and will refund your purchase price, with the following exceptions," the company states on its website.
Some shoppers have taken this to the extreme — returning things like a Christmas tree in January, an already-eaten steak, and an empty bottle of wine — but despite this, it stands by the policy in almost all circumstances.
Buying in bulk
If you are buying in bulk, Costco and other warehouse stores are the best places to do so, given that bulk shopping is their main premise.
Cheapism recently did a price comparison of 100 Amazon and Costco items across the household staples, baby and pet, beauty and toiletries, and health categories. The test revealed that Costco was cheaper on 79 of the 100 items. The greatest savings could be seen in the household staples category, which was, on average, around 25% cheaper at Costco.
But while Costco wins on savings in bulk purchases, Amazon reigns supreme on convenience. With Amazon, shoppers can get nearly anything they want and get it quickly, Campbell said.
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