The satisficing approach to shopping

Costco is the Ur warehouse club store. They have a decent choice of one model for each type of product, but at jaw-dropping prices.

My allegiance to Costco is a running joke between me and Stewart Brand. He finds it funny that I buy almost everything I can there. Let’s see, I recently got a fine leather jacket I wear all the time ($89), a DVD player, batteries by the score, an okay digital camera, and real Vermont maple syrup by the gallon ($12).

Costco has become my personal shopper. I do some research, then I buy what they sell. Like all discount chains they have professionals working full time looking for deals/quality. But what I like about Costco is their niche — which is my niche. They consistently find a bargain in the “highest common denominator” bracket. What they seem to aim for, and what I am happy with, is the highest quality common quality. Not the very best, not the cheapest, and not mediocre either, but a good brand-name bargain in the high middle. They consistently deliver a great price on a very popular and competent item. It’s neither optimization (the top model with the most features), nor is it minimization (cheapest per feature) nor plain thriftiness. Rather Costco aims for some sort of consumer satisficing, to use Herb Simon’s term: a high quality that is just good enough, but at a low-end price.

They make shopping easy by eleminating the tyranny of non-essential choice. You don’t have to waste cycles trying to scrutinize similar models or brands. They do that for you: “here’s the good enough one you need” they say. The typical Wal-Mart store will have 80,000 unique stock items; the typical Costco will have only 3,500.

Right now I shop there almost weekly. Costco has a reputation for bulk food items, but many of these are slow perishables, and many items are not that bulky. Since we have a large household, their food prices are simply too inexpensive to ignore; we buy 25 lb. sacks of flour and rice by for almost nothing per pound. Milk in 2 gallon cartons, eggs by the 18, fruit by the crate, drinks on pallets, etc. We get our eyeglasses and contacts there. I buy film and get it processed way cheap on Kodak paper. And car tires! It’s crazy to think about getting tires anywhere else. Plus they increasingly have great tools, and if you are willing to adopt the satisficing mode they excel in, you can get the best deals on electronic gizmos like walkie talkies, refrigerators, vacuums, kitchen gear, office furniture and so on. If the store sells gasoline, they price it a dime cheaper per gallon than anywhere else in town. Some of their best deals are one-offs; items that appear briefly and then are gone forever: over the years I’ve seen fantastic (not corny) authentic stain glass windows for cheap, great wet suits, new hot tubs about half off, and I kid you not, funeral caskets (where I would hope “good enough” would suffice).

One other thing about Costco which they don’t advertise. They will take any item (except computers) back any time. People do abuse this, but it makes shopping there a no brainer.

-- KK 12/13/04

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