1. Hello! My name is Caton Hacker and this is my campaign on Costco Warehouse
Costco a membership only warehouse club, which means you must purchase a membership in order to shop. Originally founded as Price Club in 1976 in San Diego, but later changed to Costco in 1983 and moved to Seattle. In 2014, Costco was the 3rd largest retailer in the United States, and became the 2nd largest in the world in 2015. Walmart is the largest retailer in the world currently. Costco is the largest warehouse club chain in the United States. Costco’s goal is to provide members with quality goods at the lowest possible price, and does this extremely well by having a private brand, Kirkland Signature, to keep cost low.
My campaign primarily focuses on 3 goals. 1. Target Market 2. More social media involvement 3. Interact with the members more. Focusing on these 3 areas will increase relations with the public, leading to more sales and revenue.
The first graph gives the average sales per warehouse, along when the warehouse opened up. As of 2014, the average sales per warehouse is $164 million. The next graph shows sales per warehouse store compared to Costco’s competition. Blue is Costco, Green is Sam’s Club, and Red is Bj’s. Costco almost doubles its sales per warehouse to its competition.
The first step in my campaign is start redirecting the target market. With social media becoming more and more a part of everyone’s day to day life, targeting the biggest users is key to future growth. The younger generation is the most influenced group by social media which is why that is the key target. Big college town areas are perfect to show that everything needed for tailgating is at Costco. In healthier lifestyle areas, focusing on organic produce is a good way to stay ahead of the competition.
Next is working on the social media involvement on various social networks. Costco’s presence on Twitter is almost nonexistent. There has never been a post and is poorly maintained. For a company that has over million members, 18000 followers is pathetic. Just being a little bit more engaged would increase the amount of followers exponentially. Costco’s Facebook page is well maintained and engages with the members quiet frequently. The page has many members commenting on post and ask questions about the products. On Instagram, there are 156 post with 32000 people following. Not as bad as Twitter but definitely could be improved on.
Last step is interacting with the members more. I chose to focus on Facebook and the mobile app because Facebook seems to be working well and there are a lot things that can be done to go further. The mobile app is key because we are in the age of applications. Having notifications on your phone engages the member and reminds them that Costco has a sale going on. People can use it for all of the departments like prescription refills, picking up something in the bakery, or notifying them when their car is done at the tire shop. Having all that availability at the palm of your hand is a great way to interact with the members.
Each warehouse will have 1 week to develop the Facebook page, with the help of corporate digital media experts. After the page is up and running, each warehouse will spend 1-3 weeks inviting the warehouses members to the page (varies for each warehouse with number of members at each location). After, each location will provide updates, news, and sales about that specific warehouse. The mobile app will be set up a little differently. A team will spend 1 month conducting a SWAT analysis and various focus groups about the app, trying different things on the app. After the data comes back, a team will spend 3 weeks updating the app and work on fixing any bugs that might happen during the first few updates. Lastly, a small team will keep working on it continuously.
Breaking it down into 2 segments, each warehouse will spend around $40,000 a year on social media relations, while at the corporate level will spend around $450,000 a year. These numbers are based on average worker wage at Costco, each regions divided cost, and amount of time developers would need to initially start the social networks.
Every 3 months, every warehouse will conduct a digital media analysis to make sure they are moving forward and the social networks are successful. After the big key social networks are at a point where they don’t need as much maintenance, media developers will move onto different platforms. This all leads to engaging more with the members.
Costco Warehouse Digital Media Strategy
By Caton Hacker
• Member-ship only warehouse club
• Originally Price Club in 1976, Changed to Costco in 1983
• 2014, 3rd Largest retailer in the United States
• 2015, second largest in the world
• Largest membership warehouse club chain in the United States
• Goal is to provide members with quality goods at the lowest possible price
More social media
Interact with the
• Start directing towards younger generation
• Big college towns, target fraternity's and sorority's
• Become more involved in social media to reach a broader target market
• Focus on Organic in more healthy lifestyle areas
SOCIAL MEDIA INVOLVEMENT
Never tweeted anything
18000 followers, can be doubled
with proper maintenance
Maintained fairly well
Engaging with the members
Post regularly with members
commenting on post
1.3 million likes
Tries to engage with the public by
using pictures taken within Costco
INTERACTING WITH MEMBERS
• Create pages for each warehouse
• Include input on specific products
• Post public events Costco is sponsoring
• Being able to save coupons
• Incorporate other departments in the
• Notifications if certain items go on sale
• 1 week for each warehouse to make
• 1-3 week to invite member base
• Continuously updating page
• 1 month, SWAT analysis and focus
• 3 weeks for updating app
• Continuously updating
DIGITAL MARKETING BUDGET
• 674 warehouses
• 1 warehouse= $40,000 a year for a
social media expert
• Total $26,960,000
• $300,000 for regional oversea of
warehouses on social media
• $150,000 for developers and
maintenance on mobile app
• Total $450,000
Total spent= $27,410,000
• Every 3 months, conduct digital media analysis of each warehouse
• After development of one social network doesn’t need as much updating, switch to
• Keep engaging with the members