Costco: “New Luxury” for American Consumers

notes on Gertner, Jon. “Costco Nation.” Money. 32.10 (2003): 124-129. Business Source Premier.

America’s favorite luxury warehouse.

Costco’s high-end items are a huge part of their appeal to the American middle class.

Costco is good — indeed, Costco is exceptional — at knowing what middle-class Americans need: peanut butter, paper towels, Snickers bars and lots and lots of toilet paper. But more important, Costco has refined the art of understanding what we dream about. And then, once Costco figures out what those dreams are, the store then prices them at an irresistible discount.

In doing so, Costco is not only altering the way American consumers pursue luxury; Costco is altering the way American consumers perceive value.

“New luxury” — products that occupy the middle ground between mass and class.

The products sold at Costco are the result of an intense amount of planning, research, market testing. Complicated yearly and seasonal product rotations, etc. But their framed — in a warehouse — to betray none of this complexity. It’s all about the treasure hunt experience.

This is changing consumer culture – bargain hunting intersecting with luxury goods.

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