Tudor Price talks about Costco's membership card scheme

Transcript

00:00 What you have to bear in mind, what most retailers want

00:02 is intelligence about their consumer.

00:04 They really want to know what it is they're buying.

00:06 And so by giving them a card

00:07 and being able to track information straight away,

00:09 that gives you a wealth of information

00:11 about what your consumers' preferences are,

00:13 what their habits are, behaviors.

00:15 That then allows you to be able to forward plan

00:18 and predict and forecast.

00:19 So what it does, of course, is it means the Costco

00:21 can sort of safely and confidently buy in bulk

00:24 in order to be able to make sure

00:26 that they are meeting demand,

00:27 but at the same time, minimizing waste.

00:29 So there's a logic to that,

00:32 a distinct advantage to having a membership card.

00:34 However, there are then, of course, other issues.

00:36 So like most wholesalers,

00:38 there is an advantage to the buying in minimum quantities.

00:43 It also means that you can predict.

00:47 So when you're talking to a supply chain,

00:49 you can say that we can shift X amount of goods,

00:52 therefore, we expect a reasonable price.

00:55 It's typical sort of buying power that it gives you.