My mom has been brainwashed by Costco. It doesn't matter what product is mentioned, my mom is quick to inform you that Costco carries it and it's the best and the cheapest price. I've also noticed many of my coworkers, friends, and family members love Costco and go out of their way for simple routine items that are found at just about any big box store...
So I decided I'd go with my mom to see what all the hype was about... My first impression was "wow, this place is cool... it's a huge warehouse with all kinds of stuff from electronics to food to clothes... it's great". But then I noticed how limited their product selection was in terms of competition. You go to the Jam isle and there is like 3 jams... Walmart has like 25 Jam options. Once I noticed how few of options they carry for specific products I figured the hype must be all about the pricing of their products... Nope, their pricing really isn't any better than an Target or a Walmart. Yes, they carry stuff in bulk that you don't normally find elsewhere but the pricing really isn't better than comparable stores.
Bottom line, they have done a great job of marketing themselves and distinguishing themselves from their competitors in the minds of the consumer, that's really all there is to it.