Costco CEO Talks About Evaluating Stores

October 1st, 2009 · No Comments

I recently ran across an article talking about how Costco CEO, Jim Sinegal, evaluates Costco and their competitors on his numerous in-store visits every year.  And for him, like most of us probably, it is all about first impressions.  There really is nothing worse than walking into a dark, dingy store with the merchandise looking like it is in a bit of disarray, is there?  He says that he can tell pretty quickly, within 50 to 100 feet, how he’s going to feel about the store.  He also takes into account the impression that he’s getting from customers and employees, to determine if things are operating as they should.  Of course, he also has to check out how the store is showing off and displaying the new merchandise; the stuff that is featured along the ‘fence’ should be the hot, treasure hunt items.  There’s a lot to think about when you’re such a hands on CEO.

He also makes frequent visits to the stores of his rivals.  While evaluating the competition, he doesn’t necessarily have the same thought process because he isn’t as intimately involved with the decisions behind merchandise displays and things like that.  Of course, he does still know enough about the store’s trends to be able to evaluate how things at that store are going.  But what he’s really looking for there anyway, is how he can take their good ideas back to Costco.  And maybe their products too, I suspect.

Here’s a great story from the article about how strong he wants Costco to be on fulfilling promises to Customers through outstanding Customer Service and also how not all Costco’s are created equally due to decisions by management, unfortunately.

A woman purchased a mattress and box spring set at a club in San Jose, California, drove it several hours down to her daughter in Santa Barbara and found the two pieces were different sizes, full and queen. A club manager there refused to take the mattress set back. When the family finally got in touch with the company’s executive, Costco provided a new, correctly matched mattress set for free, along with flowers and a cake the bakery made in way of apology.  When confronted with a customer complaint, Sinegal said, Costco does its best to come up with “elegant” solutions even to an “atrocious” situation.  Sinegal also noted that, the store manager didn’t live up to the customer promise and didn’t follow company policy that directed the manager to take the mattress back.  This is something that Costco must continually address by better instructing employees about customer satisfaction.

To read the full article:

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