$5.00 chicken. Russet potatoes. 2% Organic milk. 24-pack Grade AA Large Eggs. French milled Goat Milk Soap from Australia. 2-pack 100% whole wheat bread.
This is a quick trip, so stick to the basics. You got this, Michael.
I find myself waiting in a long line at Costco, even though I know I will never win.
I’m not here to talk to you about how this is no accident. From the placement of those delectable rotisserie chickens to the rotating stock, the $1.50 hot dogs and Coke, the location of the aisles and locations of their carefully curated offerings, it’s clear that Costco knows what they’re doing. As a professional who has dedicated his career to the understanding of Costco, I can attest to the fact that their success is no accident.
I’m here to talk about how packaging is a cornerstone of success. The decisions you make with layout, print, callouts, materials, and aesthetic will make-or-break your one shot. The one shot your brand has to be a part of the incredibly limited offering within the stark walls of Costco.
And we’re not the only ones.
This rule, which governs how we approach packaging design, is something we take very seriously. We’re not the only ones who feel this way – many other companies feel the same way.
The 5×5 rule is a guideline that Costco uses to ensure that their packaging is effective. The rule states that in 5 seconds from 5 feet away, shoppers should be able to tell what the product is and why they would want it. This rule helps to ensure that shoppers are able to quickly and easily identify the products they are interested in, and makes it more likely that they will make a purchase.
Golden Rule of 5 X 5
Costco is an exciting place to shop because you never know what you’ll find.
In 2021, Costco began selling a 1,000-piece jigsaw puzzle from Dowdle Studios titled “The Treasure Hunt” which depicts a packed Costco in all its glory, including rotisserie chickens, free samples, massive hot dogs, and members steering their double-wide carts through the crowded aisles.
To be successful, brands need to create videos that are designed specifically for mobile viewing. This means shorter videos that are easily digestible and can be watched without sound.
What are the best ways for brands to stand out, grab attention, and communicate value in the mobile environment?
The average consumer spends only 13 seconds purchasing a brand in-store, according to a 2015 Nielsen report. This means that you only have five seconds to communicate what your item is and why the member wants it.
Packaging is one of the most important aspects of marketing and communication. It is the first thing that a potential customer will see and it needs to communicate the right message. It needs to be eye-catching and convey the right message about the product.
We have the ability to control how impactful our packaging is for Costco and its members. For starters, we are shipping our actual shelf right to the store!! The product leaves our facility and isn’t broken down, stocked, or even touched until it’s sitting on the floor. We have a story to tell and brand owners, in Costco, have the ability to tell the exact story we need to communicate member value.
The best way to achieve this is to use high-quality packaging that follows these five elements:
1. Structural “compliance”
2. Shoppability “in environment”
3. Striking “product presentation as hero”
4. Statements “show member value”
5. Sustainability “across materials”
As a member of Costco, you likely don’t give much thought to how your purchases make it from the store shelves to your home. However, the process of getting your items from the store to your home is a carefully choreographed dance that begins as soon as you place your item in your shopping cart.
As soon as you place an item in your shopping cart, the process of getting it from the store to your home begins. Your item needs to survive the choreography of the Costco cross dock in order to make it to your home.
Cross-docking is a method of unloading materials from an inbound truck and loading them directly into an outbound truck with little to no storage in between. This method is often used at consolidation points, such as depots or warehouses.
Costco has aligned its core business model to optimize its supply chain efficiency. All dry goods coming in the door are cubed out onto a full 40 x 48-inch block pallet. There is no overhang, minimal underhang, and few deviations. There are no half-pallets, end caps, PDQs, or master cases. Sidekicks are not used here. Ready-to-go Feature Pallet Displays are shipped. With minimal on-floor removal of ancillary shipping materials, store shelves are shipped in.
A lot of expertise and creativity is needed for this process. There are ISTA tests that a brand can do to gain confidence, but these were designed for palletized loads, not pallet displays. It is essential to know this supply chain in order to get your finished display on the Costco floor exactly as you intended.
Shoppability “in environment.”
The store shelf system was able to withstand the Cross Dock and made it to the Club floor.
What’s next in terms of shoppability? One important aspect to consider is the planogram-less, rotating aisles of Costco. How can we use our shelves to our advantage in this type of setting?
The three-sided shoppable pallet display is the best option for endcaps and under steel shelves. It looks great and is easy to shop from.
Costco’s primary method of merchandising is using 48-inch sides of pallets. TSS pallets mean that product is easy to shop from three sides of the pallet. The primary 48-inch side, as well as both 40-inch sides, are used in order to allow for a flexible and premium shopping experience from any angle.
Striking “present your product as the hero.”
Your product is the best source of information on what it is and why the member wants it. It can speak for itself in a way that no other source can.
Do not pile your products on top of each other or hide them behind each other. Place them side by side so that the customer can see what they are getting from a distance. Although it may be more efficient to stack a 4-pack of disinfecting wipes in a perfect cube, you want to lay them out in a perfect row of four in the store.
This article is discussing the success of large format club cards, also known as trap cards or blister cards. These cards are successful because they create a billboard for the product, making it visible and eye-level. The article suggests maximizing the number of facings on the primary side of the pallet to make the most of this advertising opportunity.
Color blocking is a popular trend in Club stores. The bright colors are eye-catching and help to attract customers. Once a customer touches the product, they are more likely to buy it.
Statements “show member value.”
You are understandably proud of your brand. You spend big bucks on marketing campaigns, social media, and efforts to boost brand awareness. This is necessary when you are trying to stand out among 125,000 other items at your local Walmart. However, you don’t need to put in as much effort here.
When we go shopping, we usually think about finding the items we need and getting out of the store as quickly as possible. However, sometimes it can be beneficial to take our time and explore all the different products that are available. This is especially true in the case of scarce items, treasure-hunt shopping, and expansive displays. By taking the time to look around, we can find the best deals and the most interesting products.
We have an advantage that other companies don’t: the Product TRAY. We designed and shipped these shelves ourselves, and they’re made of eco-friendly corrugated material. This strong, humble material is the backbone of Costco. It’s used for shipping, storing merchandise, and even carrying groceries. Plus, it can also be used by salespeople.
The value statement is an often overlooked tool that can be very effective in communicating with customers. It is a simple statement that tells the customer what the product or service is and what it does. It is important to remember that the value statement is not a sales pitch, but simply a statement of fact. When used effectively, it can be a powerful communicator that helps the customer understand the product or service.
A Value Statement is a brief, clear statement of an organization’s core values. It is easy to remember, and meaningful to the people it is meant to serve. A Value Statement should be actionable; that is, it should guide the organization’s actions and decisions.
In order to create a clear and concise message, you need to determine what makes your product different and use that information to create a bold statement. Use as few words as possible to get your point across.
The font of an article should be large and in a contrasting color in order to stand out on the page.
A solid background is important with no overlapping logos or cute embellishments.
A logo is not a value statement. The quicker we can get our members’ eyes on the product, the better. The brand is not the product.
Sustainability “across materials.”
reduce, reuse, recycle and design.
Costco is committed to sustainability and improving packaging. They have four strategies: reducing, reusing, recycling, and designing.
• Make packaging easier to recycle.
• Encourage the use of recycled materials in packaging.
• Make packaging more durable.
Overall, there needs to be less packaging. It also needs to be easier to recycle, with more recycled materials being used in packaging. In addition, packaging needs to be more durable.
This creates waste and an unorganized look.
Size your Club Card or Unit Box to match your Tray, and make sure your Display is the same size. This will help you avoid waste and keep things looking neat and organized.
In order to be more sustainable, packaging should contain more recycled content and certified fiber. This way, less new material needs to be produced, and fewer resources are used overall. Additionally, using recycled materials helps to reduce pollution and greenhouse gas emissions.