Costco is one of our favorite members-only retail outlets. They stock everything from detergents to computers and so much more! They have buyer programs for cars and trucks, and even host a Costco Travel Agency. Need an outdoor building? No problem… Looking for a car battery? Right this way madam… Just walk past the high-end DSLR cameras, the camping supplies, and the leather theater seating! It's simply nirvana for all you shopaholics out there.
One of the more interesting trends that The Senior List has been tracking is Costco's move into the lucrative boomer and senior spaces. This has been a market where traditional (specialty-retailers) have reigned supreme. A targeted focus on aging Americans can payoff in many ways. First, the boomer/senior market is already contributing to America's bottom line and we're only scratching the surface here folks. Second, Costco's entry into these spaces will force transparency into markets that have (in some cases) fleeced consumers for years.
Costco's big-box-approach AND focus on service is bound to make traditional retailers for; hearing aids, durable goods (walkers, canes, etc.), eye-wear (glasses, etc.), prescriptions, medical alert systems, nutritional supplements, adult briefs (incontinence products) and travel… shake in their proverbial boots.
If you research the medical alert industry for example, you'll find that there are a number players, big and small. What's not so easy to find is information on the quality of medical alert systems, where to purchase them, how much they cost, and the dependability of the call centers themselves. The Senior List has been following the medical alert industry for quite some time, and there are some great companies out there.
Did you know that you can now purchase a medical alert system at Costco? They're for sale at certain stores, (call for availability) and available now at Costco online. These big box sellers will end up putting pressure on specialty, (and online) retailers to provide more transparency to the solutions they provide. The big box stores will also force manufacturers and retailers to provide better services in support of their solutions.
Finally Costco will force these competitors to sharpen their pencils and lower their prices (if they wish to compete).
If you take a look at the hearing aid market, you'll note that this is another market that Costco has targeted. With resounding success they have set up prescription eye glass centers, Costco is now selling hearing aids via their Costco Hearing Aid Centers. According to the New York Times, “About 37 million people suffer from some form of hearing loss — from minor impairment to total deafness — in the United States. But less than a quarter of the people who could benefit from hearing aids actually use them.”
Keep in mind that this is the number cited today. The future will be mind-boggling for the hearing loss industry. Walkmans (boomers will know what I'm talking about), iPods, iPhones, and specialty head phones are turning this market upside down. Newer, cost-effective solutions will be required, and Costco sees the writing on the wall.
The new big box focus on boomers/seniors is a win-win-win for everybody. It's good for Costco (and other big box retailers), it's good for industry (makes them better) and it's great for consumers. Specialty retail must adapt or they'll be forced out. For small business, a focus on service, value adds, personal care, expertise, and buy-local initiatives is the only way some will survive.
The silver lining is in the numbers however… with 79 million aging boomers in the U.S. there's plenty of business to go around. The first wave of boomers just started turning 65, so this trend is just the beginning.