• Journal of Distribution Science
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• v.17 no.9
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• pp.25-33
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• 2019

Purpose - The purpose of the study was to seek to find out what factors having differences between paid membership customers (Costco membership) and general customers in retail industry. Since Costco operates differently from other conventional retailers, which is expected to have a substantial impact on consumers' preference of retail stores. Research design, data, and methodology - The survey conducted covered 1,000 adults in their 30s~50s living in Goyang and Gwangmyeong where Costco runs stores to determine the effects of Costco's local market-entry from consumer perspectives. 500 respondents were surveyed in each region and those working in the retail sector were excluded to ensure the objectivity of the answers. Results - Costco members in Goyang considered the price, bulk purchasing, and membership benefits as important criteria when choosing their retail store. On the other hand, as for Gwangmyeong, the non-member group's prominent characteristic was that they considered accessibility including travel distance and location and in-store amenities including food court services as important criteria for decision-making. Conclusion - Unique business model of Costco shows a statistically significant difference in terms of consumer awareness. the feature of Costco served as an critical criteria for consumers in their purchasing decision. Moreover, Bulk packaging purchases at Costco results in a strong supplementary relationship with neighborhood supermarkets.