When recently offered the chance to talk with a Costco executive about how the discount warehouse is handling diabetes, we just couldn't say no. After all, Costco is the second largest retailer in the country and the third largest in the world, with 468 U.S. stores serving 71.2 million members -- and who doesn't love a peek behind the scenes?
OK, this interview with Michael Mastromonica, Costco's Assistant VP of Pharmacy Services, may not be as quite raw as we might have liked, but we still find it interesting... Hope you do as well.
DM) When did Costco start selling diabetes products, and how do you promote your diabetes offerings?
MM) Costco has always sold diabetes care products. The focus expanded when we opened our first pharmacies in the late '80s. As with all products at Costco, our promotion is very limited. Generally, in-home mailers to members and word of mouth are how we promote. And now we have our new CDiabetes.com website, which has great content as well as product information for our customers -- and any visitors with diabetes.
Who makes the choices about what diabetes products Costco offers? On both medical (test strips etc.) and food items?
All buying decision are made by Costco buyers based upon corporate guidelines. Generally, there is an expectation of a sales number per month for an item. If an item does not make the goal, it is replaced with a different item. Food products would follow these guidelines, but diabetes test strips would be a different model because of their low sales volume.
How are the products evaluated?
Generally the buyers try to determine demand for diabetes products. Sometimes products are tested internally, sometimes information is provided by outside companies or manufacturers.
Are your low-cost testing supplies really aimed at the uninsured? i.e. if someone has good insurance, why buy supplies at Costco?
Not necessarily. Costco members are value-driven. Generally, Costco carries the major name brand diabetes care products at highly competitive prices. For products like meters and strips, we tend to be a destination for people with diabetes who are on managed care selections that don't cover their preferred brand. Since they want to continue on a product they are used to, they choose us for their supplies.
What is the pharmacy set up like at Costco stores? Some big pharmacies are very impersonal, so how is Costco different?
I think that Costco is different because it has to be able to retain its members in order to be successful. Costco is a membership warehouse. Therefore, its success and profit are totally dependent upon our members renewing their membership each year. The requirement for service is very high at Costco. Member service is THE priority at Costco and is taken quite seriously. Costco is well-known for how it treats its members and for the products and service provided. Since Costco pharmacy is part of the warehouse operation, we are governed by the same rules.
So what kind of an experience would a person with diabetes have at the Costco pharmacy versus a "traditional" pharmacy?
While product selection is limited to the high-volume diabetes products that we sell, Costco members will find excellent prices on those items. Our advantage is more in terms of the value we offer than the breadth of our offerings. CDiabetes.com has published several articles about the benefits of shopping at Costco for people with diabetes, including these:
DM) In general, what does Costco want people to know about its diabetes offerings?
MM) We can save members money on products they use every day. We offer quality products at value prices. We can be especially helpful if you are paying for your supplies out-of-pocket.
Good stuff. Thank you, Michael and Costco.