Action Learning
Entrepreneurship
Helping CDS create an experiential offering for Costco online
By
MIT Sloan Fellows MBA students Masa Kawahashi, SFMBA ’24 and Ayobami Aluko, SFMBA ’24 arrived at MIT Sloan as seasoned professionals with deep international experience: Kawahashi worked in operations at a global flour-milling company, leading international teams in North America, Oceania, and Southeast Asia; Aluko worked in finance for Microsoft, as well as in manufacturing and technology in sub-Saharan Africa and the Middle East.
Both students left their comfort zones with a hands-on 15.369 Entrepreneurship in Organizations (now Corporate Entrepreneurship Lab) Action Learning project at Club Demonstration Services (CDS), the powerhouse partner behind retail giant Costco. The company provides product samples and demos in more than 800 Costco warehouses across 12 countries, with a strong focus on food.
There’s just one problem: Demonstrations, food especially, appeal to in-person customers. The company aimed to branch out to new products, especially health, beauty, and home goods, to attract online shoppers.
“We needed fresh eyes, and it was helpful having Ayo and Masa coming from different industries and disciplines, they brought new perspective and questioned some of our own myths around what we could do for our client,” says CDS President of Global Business Operations Amy Lang.
Creating a roadmap for CDS’s e-commerce strategy
The duo was tasked with sharpening CDS’s e-commerce strategy. Who were the potential consumers? What products were best-suited to online demos or samples? What kind of organizational structure and partnership framework would be required for such an initiative? Essentially, they would need to create a roadmap for a completely new company initiative.
“I wanted to push myself out of my comfort zone, and I believe MIT was the best place to do so because of the entrepreneurship mindset,” Kawahashi says.
The team’s task was twofold: They needed to maximize customer engagement via Costco's online platform by determining which products were best suited for online video demonstrations and e-commerce sampling.
They were also asked to deliver an actionable route-to-market strategic plan based on insights gathered during an intensive research phase, wherein they interviewed high-level company stakeholders and surveyed more than 1,000 Costco members across the United States. Then, they integrated the survey results with 2023 warehouse sales performance data to derive strategic and actionable insights for enhancing CDS's e-commerce service offerings.
Based on their findings, the team provided three overall recommendations:
- Use key motivators to understand Costco members’ shopping habits and desires for CDS to create compelling demo program.
- Focus on highlighting product features in demo videos, particularly with product categories that have a high video demo engagement rate.
- Emphasize data-driven decision making.
We have already leveraged their survey and analytics insights in our sales presentations with the client. We are focusing on the areas of greatest opportunity that Ayo and Masa identified for us.
A chance to explore a new business challenge
For two mid-career professionals, the immersive, hands-on experience was refreshingly different from a typical workday, focusing more on the abstract.
“The project was tricky, because it’s not something done in practice. We were thinking about the future, and I think we were able to achieve our goals by creating a proper roadmap for their journey, while also providing them with actionable solutions that they could implement tomorrow or next month, not just long-term strategies,” Kawahashi says.
The project really tested how MIT we were: mind and hand. You need to get your hands dirty. It’s high-frequency trial and error.
Working with experts in the classroom
Meanwhile, their classwork augmented their professional experiences with real-world examples.
What’s special about this class is that it’s taught by practitioners. We heard from a former CVP at Microsoft and the former CEO of GE Ventures. These practitioners were always willing to guide us.
An open learning experience
The pair have high praise for the project, thanks to their close collaboration with CDS stakeholders to leverage data on customer insights. It demanded a blend of analytical and interpersonal skills, the perfect balance of entrepreneurial innovation.
“CDS wasn’t rigid. They were really open to learning from us, as much as we were so open and excited to learn from them. Speaking to the CDS executives was one of those ‘eureka’ moments: They had tons of data! And from that data, we made progress,” Aluko says.
“This is why MIT’s one-year Sloan Fellows MBA program was just the right place for me,” he adds. “It was a mix of everything: learning hard skills in data analytics, technology operations, and soft skills around leadership, people management, relationship management, and conflict resolution. This class brought everything together.”
