Costco Executive Summary

We all know Costco as the mega-store that carries products of all sorts, has a cheap food court, and provides a diverse amount of services to their customers. Costco even offers their own line of products, Kirkland, which offers even lower prices compared to their complete store inventory. These attractive features and amenities has increased an overall membership, which in turn increases a volume of foot traffic throughout every square-inch of their warehouse. Due to a high demand, the problem of long wait lines persist. Often, the wait lines create a delay in the customer’s day as the lines extend to over 40 ft from the cashier. There are many options that Costco can take to maximize and ensure high quality customer service, and through this
Each membership requires annual renewal to shop and participate in its’ low prices in bulk. The most common products that Costco sells are produce, jewelry, clothing, furniture, prepared food and insurances. The majority of Costco’s income results from the membership fees that customers pay. As the largest membership warehouse club chain in the United States, Costco emphasizes customer satisfaction and employee morale. In order to achieve customer satisfaction, Costco has some specific characteristics like common goal of excellence, service orientation, teamwork and high energy and fast pace.
With Costco’s emphasis on customer satisfaction, we observed the checkout line wait times at peak hours of 5 - 6 p.m on a weekday. Often when you go into a Costco at certain peak times there are more cashiers working, but on average the lines are always very long. We will be analyzing the number of cashiers working in relation to how long the average wait time in line is. By searching the average wait time a customer experiences in a Costco line during these specific hours within the month, it will show us if it is ideal to consistently increase the number of cashiers
By offering diverse products, there is more foot traffic from customers as Costco appeals to its customers as a “one-stop shop”. Costco has set up their store as a one-way enter to a one-way exit, as well as strategically placing certain products around the store as a strategy to get the customer to explore each aisle. This serves as a way for their checkout lines to not overflow from quick shopping, buying cashiers time to process each customer and provide excellent customer service. But as people start to fill in to lines, the wait times begin to expand. From here, we saw two different things happen. During our observation time, when lines became overwhelmingly long, another cashier would open up a lane which created less stress on existing lines that were long. This helped customer satisfaction and decreased wait times. We also saw as a result from long lines, a new cashier would replace a working cashier. This gave the previous cashier a break, also allowing a fresh set of hands to contribute to processing customers. Based off of these observations, we explored if adding an extra cashier would be most beneficial during peak hours of a