Costco’s latest promotional offering just dropped, but members aren’t rushing to claim it. At select warehouse club locations, members can now take home complimentary 3-pound bags of Gala apples.
The shopping warehouse’s unique business model, wherein membership fees contribute largely to its revenue, means that it focuses on plugging its membership more than advertising specific products. Costco puts significant effort into encouraging people to join, or upgrade and renew, existing memberships.
In the past, Costco has offered enticing items like tote bags to coax customers into automatic membership renewals, but the promotional bag of apples is not as appealing, according to one Costco member.
“Giving away apples is like giving away white bread,” they told TheStreet. “It’s fine, I guess, but not very interesting. It’s certainly not going to get me to do anything different.”
Costco has previously been successful in pushing customers to upgrade to the Executive tier, which is $130 annually, with customers earning 2% cash back on most purchases, compared with $65 for the basic level. In June, for example, Costco started unveiling a new membership feature that allowed Executive members to shop one hour earlier than regular members during weekdays and Sundays, and half an hour earlier on Saturdays.
The perk was generally well received. The company reported a 1% boost in sales at the end of September, and Executive memberships increased by 9%, according to CFO Gary Millerchip.
Which might explain why the apples that followed seemed to fall a bit flat.
What’s more, Costco shoppers have complained about employees tirelessly approaching them about memberships. Another customer told TheStreet that his membership makes sense for the amount that he shops, but he continues to face pressure.
“The last few times I’ve gone to check out, I’ve gotten the third degree about my membership,” he says. “It’s getting really old.”
For years, Costco’s membership system has served the brand well. But it’s apparent that taking a few steps in the wrong direction could turn people away.
—Ava Levinson
This article originally appeared on Fast Company’s sister publication, Inc.
Inc. is the voice of the American entrepreneur. We inspire, inform, and document the most fascinating people in business: the risk-takers, the innovators, and the ultra-driven go-getters that represent the most dynamic force in the American economy.
