User experience (UX) is the “sunshine” term in business. Firms are spending millions of dollars in trying to study consumer behavior and stay ahead of the competition. Firms would pay a fortune to be able to hold information that ultimately shows what delights and pleases their customer.
What is User Experience?
User experience (UX) includes all aspects of the interactions between a company, its services, and its products. In order to achieve a high quality of user experience, a company would need to mix together many disciplines, competencies, and skills to meet the exact needs of the customer over and over again in an iterative process
What makes COSTCO’s business model different?
- Costco’s business model may not sound like the usual ones we see in textbooks. Costco’s business model is appealing because:
- It creates value for customers in the form of savings through low prices,
- It boosts the interest of customers by creating a treasure hunt atmosphere through the limited brands they display.
- Costco is dependable. When they tell you that prices are low, be sure to see low prices. As such, customers have over the years developed a trust relationship with Costco.
The element of trust is very important for a business to cultivate. No matter how much we invest in data collection, UX research, and design, ultimately, companies need to cultivate this atmosphere of trust whereby customers, over time, truly believe they are getting value for their money spent and value for their time.
Why does COSTCO keep growing despite having an unconventional business model?
Those who know COSTCO, realize that this company has gone against most textbook prescriptions for a business model to become one of the most respected companies in the world.
Costco’s business model is based on the following:
· To sell at ultra low prices and
· To sell a limited number of nationally branded and private label products.
Through the implementation of these strategies mentioned, Costco has built the reputation of being the ultimate low-cost seller. Customers go to Costco with the hope of being able to “treasure hunt” for selected items at ultra-low costs. This not only inspires more spending but also keeps their curiosity high.
The COSTCO Lesson
We see that a company could charge membership fees, operate stores with almost no decor, restrict payment methods (in Costco, only cash or debit cards are accepted) and still be successful if it is creating value for the customer.
Superior value is what the customer should intimately experience.
References
https://www.nngroup.com/articles/definition-user-experience/
Thompson, A. A., Peteraf, M. A., Gamble, J. E., & Strickland III, A. J. (2014). Crafting & executing strategy: The quest for competitive advantage (19 ed.). New York: McGraw-Hill/Irwin.
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