A few weeks ago, it finally registered that Costco had discontinued Gillette Sensor cartridges (I’ve been going through razors a bit faster over the last several months than I had in the last several years). I was frustrated by this, since the replacements (Mach 3 and (especially) Fusion) are roughly 3x the price (and, really, 5 blades?). I suspected that Gillette had pressured Costco to drop the less-expensive blades, and resolved to ask the question, though I didn’t expect to get an answer. I just got a call from Costco HQ, and I learned some things that surprised me.
First, I was surprised to get a call at all, much less from somebody other than customer service or PR (I’m not being too specific about who called me, though he did give me permission to write about our conversation—quotes are approximate).
He told me that their discontinuation of the Sensor blades was nothing to do with pressure from Gillette, and I got the feeling that just about any supplier would love to have shelf space (or pallet spots, which is the unit Costco thinks about) for anything at all. Costco, on the other hand, is good at carrying what they can sell lots of: “If dog food sells better than razor blades, that’s where those pallet spots will go.” They are not good at carrying everything.
The other thing I had asked about was that some years ago they had sent me a new Fusion handle and blade. I assumed that Gillette had approached them with the idea of providing these to folks who hadn’t yet bought Fusion blades. He confirmed that this went roughly as I expected, and added that when a supplier approaches them with this sort of promotion idea, it goes to the VP level to determine if it’s something that brings their members value. If they decide to do it, they spend what sounds like a surprising amount of time pulling the list (more about which in a moment) and provide it to a 3rd-party mailing outfit (with a legal requirement to destroy the list after performing the mailing).
They do keep records of everything their members have bought, both so they can track sales (which is fundamentally how they decide what to carry), and so they can follow up with folks when circumstances warrant (I’ve gotten something like four food recall notices, from the peanut butter excitement to some ground beef, in the last year; he also mentioned a printer they sold some years ago that had shipped with a bad driver, and they shipped out CDs with the right driver to purchasers).
The final surprise for me was that they don’t do a lot of BI on their massive data: they care on an item-by-item basis what sells, and it sounds like it’s a pretty cumbersome process even to pull out the data they need, and are not convinced there’s enough member value to justify sophisticated analysis of who bought what with what.