If You’re Not Buying Clothes from Costco, You Might Want to Start
While we were all focusing on Kirkland Signature food, Costco was slowly gaining steam in the clothing world to the point where they're making more money from clothes than Old Navy. Here's how.
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The spread of COVID-19 has completely altered the retail world. Costco—though it has remained open throughout the pandemic as an essential business—is not exempt, and there are plenty of things you won’t see in Costco anymore. If you’re going to return to the warehouse store while the pandemic is still a danger, make sure you’re following these tips for safe shopping. But there’s also a more positive change you should make to your Costco shopping routine.
You probably didn’t know about this hidden in-store gem that doesn’t get anywhere near the same amount of buzz as, say, their famous rotisserie chicken: their clothes. Yes, clothes! It may seem a little strange to buy garments at your go-to spot for groceries, food court fare, and toilet paper, but lots of people are doing it and for good reason. (Note that some states have limited their Costcos to selling only essential items, like clothes, during the COVID-19 crisis.)
As Costco’s massive success in the United States continues—it’s the country’s fourth-largest retailer as of July 2019, according to the Washington Post—it’s been slowly creeping into prevalence as a clothing retailer. If you haven’t spent a lot of time on Costco.com’s clothing section, here’s what you should know. Costco has its own Kirkland Signature clothing line, but it also offers items from such big brands as Tommy Hilfiger, Calvin Klein, and Birkenstock. And it offers them for cheap. It’s worth noting, though, that many of this name-brand clothing is “members-only” items, even online.
The Post explains that Costco “caps its profit margins at about 15 percent,” allowing it to offer serious deals on even brand-name clothing. Well-known brands bring unsold merchandise to Costco, which can then sell them for a much more reasonable price. It’s just one of the secret shopping perks from Costco only members know.
Cost isn’t the only reason people are turning to Costco as a clothing destination. A lot of it has to do with the physical store experience. With its “pared-down” area consisting mostly of folded clothes on tables, Costco’s clothing section smacks a little of other bargain shops like T.J. Maxx and Marshall’s. So it provides a similar “treasure-hunt” feel to those stores, but as it’s just a small section of clothing rather than an entire store, it makes for a slightly less overwhelming shopping experience.
Despite this scaled-down experience, though, there is a sense of urgency that comes with clothes shopping at Costco, and that comes from the fact that you never know what you’ll find. Rather than racks of several of the same shirt, you’ll instead find tables displaying…whatever is there that day. So if you see an item you love, there comes with it the need to buy it while you’re there. The potentially self-control-supporting possibility of “I’ll get it next time I’m here” that traditional stores allow disappears, so people have a buy-it-or-lose-it mentality.
Add to that the fact that people who are already in Costco, or on the website, stocking up on its many other wonderful must-buys, figure that they might as well poke around in the clothes section while they’re there, and Costco’s beginning to see some serious profits from clothing. To be exact, Costco is now seeing clothing and footwear account for $7 billion in sales a year. That secures its place as the eighth most profitable retailer of clothing in the United States! Costco is seeing more annual profit from clothing than big names like Neiman Marcus and Old Navy, per the Post.
With numbers like that, you’ve gotta figure that these Costco clothes shoppers are onto something. So next time you’re getting your shopping fix, consider checking out Costco’s clothing section. And let’s not forget that clothes aren’t even close to the strangest thing you can get from Costco.
- Costco.com: “Updates and Coronavirus Response”
- The Washington Post: “Costco quietly becomes a destination for clothes”
- CNBC: “Amazon’s 100 million Prime members will help it become the No. 1 apparel retailer in the US”