Bryan Lehrer


41 bookmarks. First posted by briansholis 10 weeks ago.


Costco Capitalism 2019-12-16 It always strikes me when I run into a friend who is amused that I am a Costco member. For someone who grew up in a suburban area,…
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9 days ago by johnrclark
It always strikes me when I run into a friend who is amused that I am a Costco member. For someone who grew up in a suburban area, even with the nearest Costco being a 45-minute drive from our house, shopping there was a no-brainer for my family. via Pocket
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10 days ago by colonel2sheds
Costco Capitalism 2019-12-16 It always strikes me when I run into a friend who is amused that I am a Costco member. For someone who grew up in a suburban area,…
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11 days ago by jrdodds
Costco Capitalism 2019-12-16 It always strikes me when I run into a friend who is amused that I am a Costco member. For someone who grew up in a suburban area,…
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12 days ago by stevenbedrick
Costco Capitalism 2019-12-16 It always strikes me when I run into a friend who is amused that I am a Costco member. For someone who grew up in a suburban area,…
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12 days ago by dylanc
It always strikes me when I run into a friend who is amused that I am a Costco member. For someone who grew up in a suburban area, even with the nearest Costco being a 45-minute drive from our house, shopping there was a no-brainer for my family.
article 
12 days ago by mud
Costco capitalism
loopinsight  spike 
12 days ago by edan
Instead, what I want to talk about here is the sum of all these components — how Costco can sell all of its products for low prices while making employees and customers happy. While other companies such as Costco competitors Amazon and Walmart also operate with versions of this low price, low margins strategy, Costco diverges because it arrives at low prices through psychologically favorable tactics for involved stakeholders. This is business speak for 'Costco can sell things for the lowest prices and step on the least amount of toes.'
shopping  interesting 
13 days ago by andyhuey
Costco Capitalism 2019-12-16 It always strikes me when I run into a friend who is amused that I am a Costco member. For someone who grew up in a suburban area,…
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13 days ago by dorianj
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13 days ago by sbmandal
Earlier we talked about Costco’s overwhelming fairness (summed up as cheap prices and high wages), and how this creates an environment of structural unimpeachability (aka “Can’t Be Evil”).

The funny thing about a statement like 'Can't be Evil' is that it combines a boolean and subjective expression. How a given entity defines 'evil' is very much open to interpretation. Some might see Google's approach to surveillance as totally reasonable while others associate it with the worst kind of toxicity. In the context of Costco, evil — or put more simply, ethics — is approached with the same subjectivity.

In corporate governance, being evil is not actually the crime; it's being judged for being evil, or worse being cancelled entirely that is actually the outcome that effects the bottom line. Traditionally this has meant that as long as you had a good enough PR and legal budget, you could do some fairly demonic things and still redirect any negative attention away. But in the past two decades there has been an increase in legibility around the externalities of business, alongside a rise in the publics' standards of decency. This combined with a plethora of viral publishing mediums means that all it takes is a single tweet to change the entire fortunes of a company.

The key to dealing with this sensitivity is knowing precisely what constitutes evil and for whom. If you think back to Costco's business model, it sells a small number of products in incredibly large quantities. In order to sell products in bulk, you need to sell precisely to mainstream consumer tastes, which might mean slightly different things depending on which broad demographic you cater to. The fringes simply do not have enough purchasing power. To do this Costco not only has to create products that fit perfectly into its 'consumer overton window' but they also need to hold up to ethical standards of this population.

As clean meat, organic produce, designer supplements and protein powders, and Airpods, all move from luxuries of the rich to commodities of the middle class, Costco is the canary in the coal mine for this transition. Embodied in the increased demand for these products is the increased demand for the ethical values they represent. While Airpods might not have much embodied meaning, fair trade bananas, paleo bars, and acaí smoothies do.

Interestingly, for the purpose of grasping Costco's ethical boundaries, you have to look away from their embrace of wellness trends or organic foods. Instead it's the Costco best sellers that have been in the stores for literally decades — like the $4.99 Rotisserie Chicken or $1.50 Hotdog — that actually speak the best towards the store's Overton window. That you can simultaneously crave cold pressed juice, but not bat an eye at the inherent questions of sustainability that surround a $1.50 1/4 pound all beef hot dog seems to embody the Costco ethical stance well: Sustainability or Ethics are not things rooted in facts but perceptions.

Costco shows the futility of this kind of neoliberal logic — that ethical concerns can be clumsily and painlessly shopped around. Once again it's in this almost apolitical stance that Costco reveals a lot about its ethics, and its subsequent perception from the public gaze. Costco is not an ethical maverick or trend setter. It is a trend follower, both in culture and product. It's through swiftly following the lead of its mainstream customers that Costco is able to circumvent the PR crises that surrounds much the corporate landscape right now. Costco can never be seen as Evil because that would mean the bulk of its customers view themselves as Evil.

This reveals a problematic Catch 22 that sits at the center of this piece. Corporations only act as ethical as their subset of consumers, and consumers only are pressured to only act as ethical as their value-maximizing formulas allow them to be. This means that making a premature leap towards offering more progressive yet more expensive products or services comes with risk. Risk averse corporations, especially large ones like Costco, have to be completely sure that a market has come maturity before they offer up a product that represents a premium shift in its consumers' ethical frameworks.

So if the golden child of consumerism, a lovable and ‘fair’ company like Costco is only as ethical as the bulk of its shoppers, where does that leave us? In the short term Costco might technically represent a pragmatic balance of entertaining a more sustainable version of consumerism than Walmart or Amazon, but this is like calling a large oil producer the most climate-friendly. At a certain point there is an inherent incentive problem that needs to be recognized.

Looking forward, the optimist might say that the public’s increasing legibility towards impact and increased ethical concerns means that Costco will be pushed towards practices that are less extractive, and that the collective impact of these choices will be non insignificant. But will the pace of this shift be timely enough? The pessimist might note that if there’s anything that we know about our resource consumption, it’s that we are far better at choosing what is cheap and easy in the short term than we are adequately pricing sustainability into the future. The ‘E’ (externalities) in our value formula will be weighted more over time, but will it ever be weighted appropriately? Our collective inaction towards climate change should be evidence enough that consumers alone cannot be held responsible to correctly internalize externalities.

Some have addressed this future discounting problem through the lens of providing different choices to consumers. If Costco isn't progressive enough, what about Whole Foods? If Whole Foods doesn't do the trick, what about the local farmers market? The problem with these choices is that every step up in ethical consumption comes with a slashing of consumer population size and the economies of scale that come with more mainstream options. Your backyard organic produce is just this — a solution for an increasingly small radius.

Instead, what is far more impactful is to figure out not how to increase the amount of consumers that fall into these increasingly expensive, discrete consumer tranches, but to convert preexisting tranches into more ethical operation frameworks.


Another way to get at this idea is that instead of adding/removing variables in formula for consumer value as a way to create more equitable outcomes, it's easier to actively influence the weighting of the formula's preexisting variables. There is much less resistance working within a system as opposed to reinventing it. If you are interested in how a set of companies and consumers can be the most impactful possible in as pragmatic a way as possible, your best bet isn't necessarily to disrupt capitalism with aspirations of circular economies, back-to-landing, social entrepreneurship, or any of its other silver bullets. New solutions are important, but only if such rhetoric doesn't step over the impact of taking previously existing institutions and retrofitting them towards better outcomes.

So what are the tools at our disposal currently to influence a mainstream consumer's weighting of 'E' to be more accurate? Things like certifications, investigative journalism, and sensational marketing are the most common ways we get consumers to augment the weighting of the impacts of their shopping. Even it constitutes fighting fire with fire and often devolves into virtue signaling, there will continue to be a role for these strategies.

How these strategies fall short though is that they achieve their increase in environmental or social legibility through a medium or third party. In the long term we will see those communicating impact attempt to dissolve this intermediary through increasingly immersive mediums that lead to heightened awareness. Whether through VR which has been proven to lead to increases in short term, 'affective' empathy, or the wielding of utilitarian frameworks like effective altruism that promote a more honest reflection of underlying impact, consumers will be drawn towards channels that bring them closer to truth.

This is a shift that can be taken advantage of by more than documentarians and nonprofits. I believe that retailers like Costco can play this game too. Instead of reacting to the slow evolving standards of decency of its shoppers, there's nothing that's stopping a company from playing a more proactive market making role as long as they accompany this push with convincing evidence for consumers why a new offering is valuable for them.

With all that being said, is this scenario likely for Costco? Probably not. Have you ever tasted a $5 rotisserie chicken?
economics 
14 days ago by tomshen
Compared to Walmart who earns $235,450 of sales per employe, Costco earns more than twice the amount at $744,893. This means that they can increase individual employee wages, which in turn increases talent and retention levels, which in turn increases customer happiness, which in turn increases membership sales ... you get the idea.
14 days ago by gustavoluz
What are the results of Costco's fairness? Quantitatively speaking, Costco is a very healthy company. It has grown steadily since its inception, through boom and bust, and in just the past year has doubled its stock price. Wall St. loves to rank on Costco for not maximizing short term shareholder value through short term cost cutting measures (i.e. cutting wages) but you could argue that for long term holders, Costco's stock is aided by these non extractive values. One illustration of this is that despite the ongoing 'Death of Retail', Costco has never closed a retail location over bad performance. The same can't be said of many other retail rivals, including Costco's closest wholesale counterpart, the Walmart-owned Sam's Club.
costco  management  people  process 
15 days ago by dano
"Costco's warehouse model means that they have low overhead costs and therefore need less employees to carry out their operations. Compared to Walmart who earns $235,450 of sales per employe, Costco earns more than twice the amount at $744,893. This means that they can increase individual employee wages, which in turn increases talent and retention levels, which in turn increases customer happiness, which in turn increases membership sales ... you get the idea."
costco  shopping  retail  economics  2019  2019-12 
10 weeks ago by briansholis