Because I think that's where the real money is and who these guys are really targeting.
Costco launched in 1980, 30+ years after Wal Mart, and won by offering less selection and lower prices. I believe there's a real opportunity here.
Do you have kids? Are you a middle-class homeowner?
Because I think that's where the real money is and who these guys are really targeting.
Costco did not launch thirty-plus years after WalMart.
"THE HISTORY OF COSTCO
"The company's first location, opened in 1976 under the Price Club name, was in a converted airplane hangar on Morena Boulevard in San Diego. Originally serving only small businesses, the company found it could achieve far greater buying clout by also serving a selected audience of non-business members. With that change, the growth of the warehouse club industry was off and running. In 1983, the first Costco warehouse location was opened in Seattle. Costco became the first company ever to grow from zero to $3 billion in sales in less than six years. When Costco and Price Club merged in 1993, the combined company, operating under the name PriceCostco, had 206 locations generating $16 billion in annual sales."
http://www.costco.com/about.html
"1962
"On July 2, 1962, Sam Walton opened the first Walmart store in Rogers, Ark."
http://corporate.walmart.com/our-story/history/history-timel...
I have four children (three still living at home in my care, one grown up) and am solidly part of the United States middle-income category. We don't own a house however, but rent a townhouse. I have lived longer at this address than at any other I have lived at in my whole lifetime. I am a member of Amazon Prime, of Costco, and of Sam's Club. I buy different things at different stores. (I buy a lot more at Sam's Club than at Costco mostly because our local Sam's Club is much more on my way to and from other destinations than the local Costco is.) I don't see anything about the new Jet business venture that appeals to me, but I'll listen to my Facebook friends, other middle-aged parents like me, and see what they think about it. I often talk about deals I've found on Amazon to my friends on Facebook. I hardly ever talk up Costco or Sam's Club.
A website, such as jet.com is out of "sight out of mind". Unless it becomes a habit (like Amazon has for many people including me).
Costco has several advantages over a jet.com. And the Devil is in the details in terms of what made Costco a success.
1) It's not out of site in any way. You can't miss Costco if there is one in your neighborhood. You can easily miss jet.com or not think about it unless it becomes a habit.
2) Costco succeeds also by doing what Walmart does in part. Once you are in the store they get you to buy things that you didn't think that you needed. And more of it then you thought you needed. This was the concept behind Makro Self Service Wholesale in the 80's (the place that Tom Stemberg of Staples interviewed at and got the idea for Staples for. [1] (Ntim, I was at that store when it opened..)
3) Employee culture. Can be done (Zappos) online but I would say more of a benefit in a physical store (my weakest point I will agree). [2]
[1] http://www.forbes.com/sites/danschawbel/2012/07/05/tom-stemb...
[2] http://www.businessweek.com/articles/2013-06-06/costco-ceo-c...
Yup, I typically got to Costco with one maybe two things in mind, and rarely leave with less than $250 in my cart, and I'm usually one of the lightest carts I see checking out. And it's not things you need, it's things you want. I love Costco.
Re #2: The entire Jet model is the more you buy the more you save. Taking the baseball example, it's pretty easy to infer when they see you are buying cleats and a glove that they will up-sell you with a bat as well and call out the bundle discount you will receive.
Re #3: The article explicitly discusses that the founder is trying to create an "anti-Amazon" culture that values people and relationships. You can agree or disagree with this approach, but you can;t deny they are actively trying to promote a great culture to work in (no performance reviews, for example).
This is not to say that Jet.com is going to nail it, but you can't dismiss Jet.com's efforts here out of hand either.