Getting a lesson in retail inside world’s busiest Costco looks at one of their Hawaiian stores:
While the average Costco warehouse rings up a staggering $129 million annually, one stands out for its sheer volume of business:The Iwilei (pronounced ee-VEE-lay) Costco — the largest among the company’s three Oahu locations — posted $300 million in sales last year.
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Nearly one in every four island residents — more than 190,000 — joined the club at this store. Tack on the other two locations — Waipio and Hawaii Kai — and half the residents carry a Costco card.Iwilei is so busy, in fact, that it turns its entire inventory every two-and-a-half to three weeks — a logistical wonder considering most everything comes in by water.
Here’s the real Costco secret:
For an annual fee, members buy the right to purchase items in bulk at steep discounts. But beyond the 1-gallon jugs of canola oil and 30-pound bags of rice, at the heart of this model is the treasure hunt — the discovery of that thingamajig that you never knew you needed until just now.Each warehouse carries roughly 4,000 SKUs, or stock keeping units. Each SKU represents an item at the most granular level of style, color and size.
A pair of Burberry Ladies Golf Slacks, size 8 in Surfer Blue, is one SKU. The same pair, in size 10, is another.
Of the 4,000 SKUs at a typical store, 3,000 are staple items that never change, from eggs to bread to milk. The other 1,000 represent the treasure hunt for which Costco has become known.
In fact, some people see Costco as their personal shopper.