Costco Wholesale
Implementing GIS to help improve Costco's business operations.
Price Club
Costco as we know it today began under the banner of "Price Club" in 1976.
Launched in a remodeled airplane hangar, purchased by founder Sol Price.
4605 Morena Boulevard, San Diego, CA.
Initially sold only to other businesses as a supplier, with less noticeable profits.
Costco
The first official "Costco" launched during 1983 in Seattle, WA.
Operating Philosophy: "Keep costs down and pass the savings on to members"
Recording Breaking Start: First company in history to achieve 3 billion dollars in sales within 6 years of opening.
The two chains officially merged in 1993, and rebranded in 1997 as "Costco Companies, Inc."
Over 800 locations found worldwide.
Recent fiscal years have shown Costco reporting total sales of over 64 billion dollars.
Commitment to Quality: Stocks on 4,000 stock keeping units (SKU's) as opposed to the average supermarket (30,000 SKU's)
Project Overview
While Costco is an incredibly successful business, GIS technology would allow for management to further improve their sale and marketing tactics.
Through data gathered from ArcGIS technologies such as Business analyst and Survey123, Costco can more accurately predict the demand customers will have for certain products.
This will allow management to make more efficient purchases, especially since Costco has a somewhat limited amount of products when compared to other supermarkets.
Data gathered via "Tapestries," provided by ESRI, will allow Costco to develop personas of the local customers they serve, and stock shelves accordingly. These predictions can be verified against customer feedback collected via Survey123, to ensure that Costco is stocking in demand products.
Data is further refined into a Dashboard, which displays all maps and data readouts in a more user-friendly method. (These dashboards can then be displayed to upper management, allowing a more concise view of customer demands.)
Costco Sites-sites of focus
Fontana Site
16505 Sierra Lakes Pkwy, Fontana, CA 92336
Dashboard
This dashboard shows data regarding the Fontana location. These maps show some spending habits of the local community as well as a demographic break down. This could provide alot of helpful data to any given store.
Tapestry Segmentation
The Infographic of the close population gives valuable information about the products that this population is most appealed to. This allows Costco to prioritize the products in this area.
Redlands Site
1099 E Hospitality Ln, San Bernardino, CA 92408
Dashboard
These dashboard’s are a user friendly way for organizational member’s to view spatial data.
This Redlands Costco location has a good amount of people in their surrounding area who favor green products and consume organic foods.
For the map about the average spent at food stores per week it's evident this location has a decent mix of people who spend over 150 per week and those who spend under.
Tapestry Segmentation
The top three tapestry segments within a five-mile radius from the Costco location in Redlands are Fresh Ambitions, Barrios Urbanos, Las Casas.
The most dominant segment, Fresh Ambitions, consists of young families, many of whom are recent immigrants, they focus their life and work around their children.
As consumers they tend to be very price-conscious, they budget for fashion, not branding. Fresh Ambitions residents must budget for baby food and disposable diapers.
Moreno Valley Site
12700 Day St, Moreno Valley, CA 92553
Dashboard
It’s noticeable from these maps that the Moreno Valley Costco location has a really strong amount of people in their surrounding area who favor green products and organic foods.
There appears to be a low volume of consumers who spend more than 150 per week at food stores south of the store location. On the other hand, to the west of the store there is a heavy concentration of people who spend on average more than 150.
Tapestry Segmentation
The three most dominant tapestry segments within a five-mile radius from the Costco location in Moreno Valley are American Dreamers, Urban Villages, Home Improvement.
The majority of households include younger married-couple families with children and, frequently, grandparents. Diversity is high; many residents are foreign born, of Hispanic origin. Hard work and sacrifice have improved their economic circumstance as they pursue a better life.
As consumers they tend to spend money carefully and focus more on necessities, spending is focused more on the members of the household than the home.
Survey 123
The following survey was distributed to a number of current Costco members to gain insight into both their spending habits and product preference.
When gathered in a large enough amount alongside Business Analyst/ArcMap's data, Costco will have two accurate predictors of the wants and needs of local customers, and can stock accordingly.
33 responses in total were collected from both current customers and self-submitted data.
The majority of our responses show that customers seem to average 2 to 3 visits to Costco per month, with the fewest members making 4+ trips.
Food and organic produce are the best sellers across our site locations, with demand for clothing and tools being reported as the lowest.
For this survey, responders had a (near) unanimous demand for more of their favorite products to be sold in their local Costco.
The majority of our respondents spent $140-230 monthly at Costco across a variety of different products. Few were large spenders ($320+) so stocking up on luxurious/expensive items should be done with caution.
In accordance with the previous data showing “Food” and “Organic Produce” as the most popular items, they again were the most frequently demanded products from our focus group. Competing with other major grocers such as Sprouts, Stater Bros., and Trader Joe’s shows that Costco may want to look at investing more into those departments.
Alternative Usage of GIS
Collector App
The Collector app is an easy to use app that allows stores to see what sections of the store are most popular. This data allows them to strategically place products to maximize sales.