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Studying Cross-Visitation: Where Else Do Costco Customers Shop?

Costco is a big-box retailer with stores in almost every state in the US. The brand is known for selling large quantities of goods at low prices. It seems to have benefited from that reputation during the pandemic, becoming one of a select few brands in the grocery category to experience an uptick in traffic.

Why Cross-Visitation Data?

Delving further into cross-visitation data can help us understand who Costco’s competitors are, how regional differences affect that competition, and how each brand can exploit foot traffic intelligence. This helps to reorient marketing and operations, set up new sites, and gain market share.

It is no surprise, then, that a look at cross-visitation data for Costco in 2021 surfaces a series of big-name brands also known for competitive prices, such as Walmart, Target, McDonald’s, and Sam’s Club. 

Tools for Cross-Visitation Data

To study Costco cross-visitation in the US, we used Unacast Now and Tableau to build an interactive map detailing the Top 10 most cross-visited brands by local, state, and national figures. The data presented here was gathered between January 1, 2021 and December 31, 2021.

Below, you’ll find a few observations we made using the interactive map. You can select to view the map at the state or local level and zoom in on individual stores. As you hover over each area, you’ll see a list of Costco’s Top 10 most cross-visited brands.

Costco’s Rivals

The 10 brands Costco shoppers most frequently patronize while running their errands are as follows:

  • Walmart
  • Target
  • Home Depot
  • Costco
  • Primo Water
  • Lowe's
  • McDonald's
  • Safeway
  • T-Mobile
  • Sam's Club

Most of these brands don't come as a shock.

Digging Deeper

Walmart, the most frequent location visited by Costco customers, likely benefits from offering many of the same goods and maintaining a similar reputation for deals. The same can be said of Target and Sam’s Club.

McDonald’s, a cheap option in a different vertical, quick-serve restaurants (QSR), benefits due to both its sheer presence across the US, as well as cultural and budgetary affinities.

Primo Water’s appeal to Costco customers is a bit of a head scratcher. It's an encouraging result for cross-visitation analysis. Diving deeper into the connection between the two brands might surface insights about Costco customers that would challenge assumptions and open up new business opportunities.

Primo is a water brand whose mission is to “inspire healthier lives through reducing plastic waste and providing safer water for all.” For Costco and Primo, digging into this connection might suggest that environmentally conscious consumers are a target for the former, and that deal seekers are a target for the latter. 

Costco might also investigate why its own stores are the fourth most common destination for its customers.

Is cross-visitation especially common in certain areas? Are stores too close together, or does this merely represent a higher degree of brand loyalty?

Digging into this trend might help Costco understand why its customers are stopping at multiple locations, and if there's incremental revenue to be gained in self-cross-visitation.

Regional and Local Trends

After checking out the topline numbers, the next step for foot traffic analysis is zooming in on regions and metro areas.

For example, Walmart is the first or second most visited location by Costco customers on the state level across most of the country. However, it is fourth in Michigan, fifth in New York, fourth in Massachusetts, and third in New Hampshire.

One might assume that Walmart’s lackluster performance in New York, one of the country’s largest markets, is due to poor results in cosmopolitan New York City, but that does not appear to be true. The brand places second in the Big Apple’s metro area.

Is there a cultural reason Walmart is losing ground to other brands in the Northeast and New York in particular? Are there steps the retailer can take to improve its performance?

Let’s check out Costco cross-visitation in a couple of the nation’s other most populous metro areas. In Chicago and Los Angeles, the top locations for Costco cross-visitation are as follows:

Chicago 

  • Target
  • Walmart
  • Jewel-Osco
  • Primo Water
  • McDonald's

Los Angeles

  • Walmart
  • Target
  • Costco
  • Ralphs
  • Home Depot

Analyzing the Data

Target, the #2 location to Walmart’s #1 nationwide, might investigate just how big its lead is in Chicago and whether there is anything to learn and replicate about its site selection and strategy there.

The company might also wonder whether it performs similarly in other Midwestern metro areas or if the outstanding performance in Chicago is more of an anomaly. 

McDonald’s, too, might investigate its success in The Windy City. The brand should further investigate the clear connection it enjoys with Costco customers, who appear to be cross-marketing targets for the leading fast food chain. 

By contrast, Home Depot actually performs somewhat poorly in both these cities (it is #7 in Chicago) given that it is the third most-visited store for Costco customers nationwide.

While it edges out rival Lowe’s in both regions, might there be a marketing or site selection strategy Home Depot could deploy to boost its performance in big cities? Or is there another explanation for Home Depot’s better performance in other areas — for example, that urban dwellers less often seek out its stores in general?

Recommendations

A brief analysis of Costco cross-visitation data surfaces a number of recommendations:

  • McDonald’s and Target should research their strong performance in Chicago, and how they can replicate that success elsewhere. McDonald’s, in particular, is complementary to Costco, and should make the most of that connection.
  • Walmart might consider why it performs somewhat poorly with Costco customers in the Northeast, especially in the large market of New York.
  • Costco should investigate why it is the fourth most common cross-visited destination for its own customers. Is there a regional trend here? Something to learn about site selection? 

This is only the beginning of what foot traffic analysis can reveal for Costco and its rivals.

Unacast data scientists can take you through the data, unearthing deeper trends and business opportunities.

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