While many retailers are stepping up their pickup methods amidst the pandemic, Costco has other plans.
The membership-based retailer does not offer pickup options for most of their online orders, and doesn’t plan to start anytime soon, said Chief Financial Officer Richard Galant. However, Costco does offer delivery options, which are believed to be driving membership sign-ups.
Analysts have said that Costco’s high membership-renewal rate and success with delivery are key to keeping customers coming back. Costco’s membership-renewal rate stood at 91% at the end of their fourth quarter. These numbers represent an “all-time high” according to Cowen analyst Oliver Chen.
Not only that, but Costco has soared above analysts’ expectations for their fourth quarter financial results. Part of their success was due to e-commerce sales. However, Galanti made it clear in an interview with Business Insider that consumers shouldn’t count on new e-commerce options from Costco anytime soon.
“We don’t have our head in the sand on it. We look at it. We have people here that study it. And maybe we’ll surprise you one day. But at this juncture, we’re not prepared to do that,” Galanti said, regarding pick-up orders.
The retailer is likely to take a slower approach to adapting new e-commerce and omnichannel capabilities, wrote UBS analyst Michael Lasser.
“While Costco isn’t likely to place as much emphasis on digital as other mass merchants like Walmart and Target, we do expect it to steadily roll out additional features to appeal to its membership base in a post-COVID world,” Lasser wrote.
Source: Costco – Business Insider
Photo Credit: Costco – Business Insider
Costco currently operates 786 warehouses, including 547 in the United States and Puerto Rico, 100 in Canada, 39 in Mexico, 29 in the United Kingdom, 26 in Japan, 16 in Korea, 13 in Taiwan, 11 in Australia, two in Spain, and one each in Iceland, France, and China. Costco also operates e-commerce sites in the U.S., Canada, the United Kingdom, Mexico, Korea, Taiwan, Japan, and Australia. For more information about the company, visit www.costco.com.