Why Employee Engagement Matters: The Costco Experience

On average, my partner and I visit Costco at Lakeside every couple of months and have done so for many years. It must be said that the physical appearance of the store is less than seductive, which I guess is to be expected of a venue that is essentially a wholesale warehouse. Happily, membership of Costco is open not just to wholesale purchasers, but to anyone who wants to buy in and avail themselves of the Costco experience.

We get there as soon as the store opens and on first glance things look, to be frank, pretty chaotic. There are multitudes of people everywhere, manoeuvring massive trollies piled mountainously high with bulk purchases of food, drink, electronic goods, designer-labelled apparel and almost everything you can think of. Over the years, we have bought a ridiculous range of items there – from bacon to sunglasses, to a beautiful statue for our garden. It is not the cheapest you will ever find, but the quality of its stock is amazing. I once cooked and served a plate of salmon comprising some from Costco and the rest from a high street retailer famous for the quality of its food. Remarkably the taste of Costco’s salmon was far better.

But over and above all of this is the service at Costco. On arrival we are greeted at the door by friendly, professional staff. They don’t wear uniforms, they look like ordinary people, and this is reassuring and calming from the outset. Their warmth extends to everyone who serves, including cashiers who are faced with eternal queues and impossibly stacked trollies. They speed through the payment process, making the whole thing agreeable and adding value to our visits with their helpfulness and good humour. Curiously, this appears to spread to the customers, as well – even though the building is jam-packed, on the whole people are polite to one another and don’t express the tensions you might expect from busy shoppers in such a crowded environment.

So recently, when I was at a conference where Costco had a stand, I went over and asked the people there what they think Costco ‘gets right’ in enabling its staff to offer its customers a surprisingly and consistently pleasant experience. Their answers were:

  • We get to choose what hours we work
  • We aren’t subject to onerous supervision
  • We feel we can talk to our managers if we have a problem
  • Every quarter, a senior leader comes over from the USA and takes time to speak to staff and thank them
  • Good pay and benefits relative to the sector

The above may sound obvious and even simple, but many organisations focus on few or none of these things. Achieving them is not straightforward, as any leader will know, but Costco has a global chain and still seems to hit the mark. With FTSE currently pricing a Costco share at over $300 there seems to be little doubt that this company understands how to create fulfilment across the board for its customers, staff and shareholders alike.