The news: Costco is making a major push to increase its digital reach.
It expanded its delivery partnership with Uber from 17 to 47 states, enabling Uber Eats users with Costco memberships to shop from nearly 600 locations. As part of the deal, some Costco members will receive a discount on Uber One, while consumers can also purchase Costco memberships through the Uber Eats app.
Costco also launched on the DoorDash Marketplace, allowing users who link an active Costco membership to order same-day delivery from every US warehouse. The addition fills a significant gap for DoorDash, as Costco has consistently ranked among its most-searched retailers not available on the platform, DoorDash said.
The retailer’s decision to offer more third-party delivery options is notable given its long-standing relationship with Instacart, which powers its own same-day delivery offering and helped build its ecommerce site.
Why it matters: Adding delivery platforms gives consumers more ways to shop Costco without making a trip to a warehouse. That matters because 43.5% of consumers say knowing they can get an online order delivered quickly makes them more likely to buy online, per a recent EMARKETER survey.
Costco’s ecommerce business is already growing significantly faster than its overall business. Digital comparable sales, excluding gasoline and foreign exchange impacts, rose 20.7% YoY for the 52 weeks ended August 30, compared with 6.6% growth companywide.
Costco is taking a similar approach inside its stores. It is testing tools that let employees pre-scan carts while shoppers wait in line, along with Scan & Pay functionality that lets customers scan and pay through the Costco app.
Implications for retailers and brands: Costco’s sharp value proposition is already helping it win over more higher-income grocery shoppers, but making the warehouse club easier to shop could sweeten its appeal beyond price. Whether members shop in a warehouse or from their couch, greater convenience creates more opportunities for Costco to capture incremental spending.
That’s important as Costco takes grocery share from traditional supermarkets. Expanding delivery helps neutralize one of those competitors’ remaining advantages by making Costco’s value proposition more convenient, not just less expensive.
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