There’s a reason Walmart is so popular, despite not exactly having a reputation for being hip or trendy. When you walk into a Walmart store, you know what you’re getting — a massive selection of inventory and fantastically low prices.
Those low prices are incredibly essential today.
In January, consumer prices were up 2.7% annually, according to the Consumer Price Index. And 50% of Americans are already saying they’re doubtful they’ll meet their financial goals for 2026 due to rising costs, according to a recent Harris Poll data published by the Journal of Accountancy.
But a big part of Walmart’s success isn’t just the in-store experience.
Walmart has also gone to great lengths to invest in the digital experience. And that’s a strategy Costco is now wisely pursuing as well.
Costco has increased its technology investment by rolling out tools such as a digital wallet for customers.
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Walmart’s e-commerce strategy has served it well
On February 3, Walmart reached a $1 trillion market cap, CNBC reported — a rare achievement in the world of retail. That milestone was fueled by the growth of Walmart’s digital business.
During Walmart’s most recent earnings call, the company announced a 27% jump in e-commerce sales.
“Almost a third of our business outside the U.S. is digital, with E-commerce in China at 50% penetration,” CEO Doug McMillon also commented.
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But Walmart isn’t done investing in the digital experience.
McMillon also said the company plans to “continue building towards an E-commerce experience that is, one, more personalized and relevant; two, multimodal, meaning a Voice, Text, Image, and Video Experience that is more conversational. Interacting with our app will include improved Imagery, Short-form Video, Live Streaming, and interaction with Influencers.”
Walmart’s investments in technology have not gone unnoticed.
“They’ve gone from just being the local retailer for good prices to really embracing technology. It’s been a massive digital business transformation that this company has gone through over the past five years,” said Accuvest Global Advisors CIO Eric Clark, as Reuters reported.
Costco follow’s Walmart’s lead, makes big investment in online shopping
Costco, in the past, resisted investing in technology because the company’s business model centers heavily on drawing members into the store.
But during Costco’s most recent earnings call, the company announced that digitally enabled comparable sales surged 20.5% in the quarter. That growth was spurred by a 24% increase in site traffic and a 48% uptick in app traffic.
Related: Costco solves problem that plagues Walmart and Target
“Our digital vision at Costco is to deliver a seamless experience that builds trust and loyalty with our members both in warehouse[s] and online,” CEO Ron Vachris told investors. “We aim to make shopping at Costco easier, faster, and more personal, no matter where or how our members choose to shop.”
Costco has recently rolled out tools that include a digital wallet, pre-scanning of carts to speed up the checkout process, and AI-supported inventory systems to improve in-stock availability and pricing accuracy.
“This isn’t about technology for technology’s sake,” Vachris said. “It’s about using technology to strengthen the fundamentals that make Costco who we are.”
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Just as Walmart’s investments in technology are standing out, so, too, are Costco’s.
“Costco is showing it can layer digital and AI capabilities onto its warehouse model,” Brett Husslein, who follows Costco for Morningstar, said in December.
To be clear, Costco still has a ways to go to catch up to Walmart in terms of market cap. The warehouse club giant’s current market cap is about $447 billion.
But the fact that Costco is following in Walmart’s footsteps by investing in technology is a step in the right direction for a company that’s long been digitally challenged. And as Costco continues to prioritize digital technology and the online shopping experience, members increasingly stand to benefit.
Maurie Backman owns shares of Costco.
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