The Psychology Behind Costco’s Store Design

Find out why Costco is good at taking your money.

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The Psychology Behind Costco’s “Treasure Hunt” Store Design

Introduction

Costco’s “treasure hunt” store design is a big part of its continued success. It makes shopping an exciting adventure, and it’s one of the reasons people are willing to spend more money at Costco than they would at other stores. Before you get started with your next trip to Costco, keep reading for an overview of how this store design works and the psychology behind it!

Costco uses a "treasure hunt" store design.

Costco's treasure hunt store design is a prime example of the power of curiosity. It's designed to get customers to wander around the store, and then make them more likely to buy more things on their way out.

Here's how it works: In most stores, you can usually find an aisle sign or a map that shows where everything is located. This makes it easy for customers to know exactly what they're looking for and where they can find it. But Costco doesn't have those helpful signs because they want you to be curious about what other deals might be around the corner! So instead of being led by your GPS-like brain, which knows exactly where you need to go next, Costco encourages shoppers to use their bodies as instruments of discovery. By making everything practically invisible behind pallets stacked high with goods, Costco forces shoppers into exploration mode: if we don’t know where something is then let’s walk over there!

The result? Shoppers end up spending more time in store because they keep discovering new products every time they turn around (and who doesn’t love finding new stuff?). Furthermore—since everything looks different from day-to-day due to frequent changes in product placement—shoppers also feel like there's always something new at Costco so we need go back all the time!

Costco has over 800 locations worldwide with an average of 3,700 products in them, compared to an average supermarket’s 50,000 products

In each Costco location, there are an average of 3,700 products on the shelves compared to an average supermarket’s 50,000 products. This means that it is easy for shoppers to navigate through their stores and find what they need easily. With fewer choices available in each store, it makes sense that Costco would want its customers to focus on one product at a time rather than having them feel overwhelmed by all the options around them.

The average product is marked up 11% compared to retail’s average of 50%

Costco’s low prices are possible because the chain doesn't have to pay for labor to cut open pallets, stack shelves, and move products around. Additionally, Costco is able to offer more competitive prices because it doesn't need to make a profit from each product sold, it receives most of its profit from membership fees.

When Costco can’t find a manufacturer to offer a product at a price they want, Costco makes the product themselves under their signature Kirkland brand

One of the more interesting things about Costco is that it makes a lot of its own products. When Costco can’t find a manufacturer to offer a product at a price they want, Costco makes the product themselves under their signature Kirkland brand. This can be seen in many areas of the store—for example, you may notice that some products are branded as Kirkland Signature, which means that they were created by Costco itself rather than by an outside company.

The Kirkland Signature brand has been around since 1995 and has become very popular among shoppers for its good value and low prices. The brand accounts for about 25% of sales at Costco stores today!

Conclusion

In the end, Costco’s treasure hunt store design is a driving force behind its success. The ever-changing layout has shoppers constantly exploring the whole store for deals and new products. Its simple layout of stacked pallets allows for less time and money spent on labor, and the company can pass those savings off to consumers in the form of ultra-low prices. All in all, I find the psychology behind their stores very interesting and a key component of what makes Costco outperform the market year after year.

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