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It's price discrimination. The market for a $1,095 mattress wouldn't be caught dead shopping at CostCo, even if it's the exact same mattress. The "Select" bra

It's price discrimination. The market for a $1,095 mattress wouldn't be caught dead shopping at CostCo, even if it's the exact same mattress. The "Select" branding isn't there to bamboozle them, it's to help them rationalize paying $500 more to be known as someone above shopping at CostCo. Casper wants one person's $1,095, and another's $599, so they use branding and channel differentiation to scoop $1,694 from both sales, instead of $1,095 for just one, or $1,198 for both. If we presume their cost is $400, then they go from $398 in margin (two sales at $599) or $695 in margin (one sale at $1,095) to $894 in margin. That's good business!

tempsy 7y ago
what? Costco isn't for the poors - if anything it's the preferred destination of the upper middle suburban class. they sell high ends things. a lot of it. i'm guessing Casper's main customer base is, again, cash-strapped millennials, so to argue that these customers are somehow above Costco is a strange take.
cmdshiftf4 7y ago
>The market for a $1,095 mattress wouldn't be caught dead shopping at CostCo, even if it's the exact same mattress. That's quite an assumption you're making there. I buy a lot of what I need from CostCo, I also spent over $1k on a mattress and have spent further thousands on high quality bedding. It's erroneous to conflate CostCo with cheap. They're a members only buying club which tends to buy high quality stock in huge quantities, taking advantage of the economies of scale on offer to them. Plus Zuckerberg shops there. https://www.cnbc.com/2020/01/03/photo-facebook-billionaire-mark-zuckerberg-at-costco.html https://www.cnbc.com/2020/01/03/photo-facebook-billionaire-m...
ivalm 7y ago
I know many people in top 1% income bracket that shop Costco. If anything, I feel like flat fee to become a member disincentivizes poorer people.
- braythwayt 7y ago
  Must be my suburb. The demographic at my local CostCo is obviously not the 1% demographic, not even close.
  - deleted 7y ago
    [deleted]
  - Terretta 7y ago
    This is HN, let’s use anecdata! “Darien (/dɛəriˈæn/) is a town in Fairfield County, Connecticut, United States 37 miles northeast of New York City. With a population of 20,732 for the 2010 census and a land area of just under 13 square miles, it is the smallest town on Connecticut's "Gold Coast". It also has the youngest population of any non-college town in Connecticut and has a high rate of marriage. Darien is one of the wealthiest communities in the U.S.; listed at #2 on CNN Money's list of "top-earning towns" in the United States as of 2010. Bloomberg's 2019 "America's 100 Richest Places" ranking placed Darien in the top 10, with an average household income of $341,090.” https://en.wikipedia.org/wiki/Darien,_Connecticut https://en.wikipedia.org/wiki/Darien,_Connecticut So Darien is where they put the Costco: https://www.storeopeninghours.com/costco-darien-ct https://www.storeopeninghours.com/costco-darien-ct Across the street further towards Norwalk are Homegoods, Walmart, Stop-and-Shop, etc. Further into Darien, Trader Joes and Whole Foods. The 6 figure crossovers are all parked at Costco and the Darien grocers.
freepor 7y ago
Costco members average household income is over 100K — it’s a Top 20% demographic.

tempsy 7y ago

what? Costco isn't for the poors - if anything it's the preferred destination of the upper middle suburban class. they sell high ends things. a lot of it. i'm guessing Casper's main customer base is, again, cash-strapped millennials, so to argue that these customers are somehow above Costco is a strange take.

cmdshiftf4 7y ago

>The market for a $1,095 mattress wouldn't be caught dead shopping at CostCo, even if it's the exact same mattress. That's quite an assumption you're making there. I buy a lot of what I need from CostCo, I also spent over $1k on a mattress and have spent further thousands on high quality bedding. It's erroneous to conflate CostCo with cheap. They're a members only buying club which tends to buy high quality stock in huge quantities, taking advantage of the economies of scale on offer to them. Plus Zuckerberg shops there. https://www.cnbc.com/2020/01/03/photo-facebook-billionaire-mark-zuckerberg-at-costco.html https://www.cnbc.com/2020/01/03/photo-facebook-billionaire-m...

ivalm 7y ago

I know many people in top 1% income bracket that shop Costco. If anything, I feel like flat fee to become a member disincentivizes poorer people.

braythwayt 7y ago
Must be my suburb. The demographic at my local CostCo is obviously not the 1% demographic, not even close.
- deleted 7y ago
  [deleted]
- Terretta 7y ago
  This is HN, let’s use anecdata! “Darien (/dɛəriˈæn/) is a town in Fairfield County, Connecticut, United States 37 miles northeast of New York City. With a population of 20,732 for the 2010 census and a land area of just under 13 square miles, it is the smallest town on Connecticut's "Gold Coast". It also has the youngest population of any non-college town in Connecticut and has a high rate of marriage. Darien is one of the wealthiest communities in the U.S.; listed at #2 on CNN Money's list of "top-earning towns" in the United States as of 2010. Bloomberg's 2019 "America's 100 Richest Places" ranking placed Darien in the top 10, with an average household income of $341,090.” https://en.wikipedia.org/wiki/Darien,_Connecticut https://en.wikipedia.org/wiki/Darien,_Connecticut So Darien is where they put the Costco: https://www.storeopeninghours.com/costco-darien-ct https://www.storeopeninghours.com/costco-darien-ct Across the street further towards Norwalk are Homegoods, Walmart, Stop-and-Shop, etc. Further into Darien, Trader Joes and Whole Foods. The 6 figure crossovers are all parked at Costco and the Darien grocers.

freepor 7y ago

Costco members average household income is over 100K — it’s a Top 20% demographic.