Costco makes a bold move to compete with Amazon | Official Website of Louis Velazquez, entrepreneur, finance guy and tech innovator

Costco (COST) has built a wildly successful business on two highly appealing concepts: saving money by buying in bulk, and gaining access to exclusive deals via a membership.

When Costco first opened its doors as a retailer called Price Club in 1976, serving only small businesses, it hadn’t hit on its winning formula yet — but it had the seed.

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By 1983, the picture had filled in, and the first Costco warehouse opened to the public in Seattle in 1983. A decade later, it merged with Price Club, creating the retail behemoth many of us know and love today.

Amazon perhaps took a page from Costco’s playbook with the idea of a membership that made things cheaper and easier for subscribers, but in an exclusively online format.

When Amazon Prime launched in 2005 for an annual fee of $79, free two-day shipping seemed like a great perk — but maybe not one worth paying for.

But as the retailer continued to offer faster and faster shipping options, it created a new kind of craving in consumers that changed the entire retail industry.

Now it’s Costco’s turn to take a page from the Amazon playbook, which it’s already done to some degree — but now it’s taking it one step further.

Costco is expanding options for customers who want items fast.

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Costco leans into a customer-favorite service

While there’s no doubt that going to Costco will save you some money, the warehouses are often crowded and challenging to navigate, especially on weekends.

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For customers who want to avoid this, Costco provides the same-day section on its website, which offers same-day delivery on thousands of items in partnership with Instacart.

Customers can also use this option for curbside pickups, a service Costco started to offer in 2021.

Now the retailer is taking convenience one step further for customers in need of speedy delivery. The new Priority Delivery option, which is coming soon, allows certain items to be ordered and delivered within 30 minutes,

Another new addition is No-Rush Delivery, which allows members to schedule orders hours or days ahead of time. Both services can be accessed via sameday.costco.com.

Costco is also running a summer promotion where members who use the same-day service can get $15 when they spend $50 or more using the code SUMMERSAMEDAY25.

Pushing back on Amazon’s lead

Amazon is clearly still the current leader in fast delivery options. Its Prime Now service, once a standalone site and app that was merged into the main app back in 2021, was first to offer deliveries on select items in less than an hour.

Now other retailers have taken the hint that customers love getting things fast. Costco launched its same-day services back in 2017 in partnership with Instacart, which will be helping the retailer in making the Priority and No-Rush delivery options a reality.

However, Costco has one asset in this situation that Amazon does not: brand devotion. People love Costco, from its low prices to its reputation for treating its employees well. That devotion keeps people paying for annual memberships year after year, despite the fact that in 2024, they increased in price.

On the other hand, you rarely meet a person who gushes about how much they love Amazon. Sure, many of us turn to it if we need something fast. But Amazon’s known for prioritizing profit over employee well-being and has been called out in the past for unsafe working conditions — not exactly admirable qualities.

So while Costco may not be in the lead just yet when it comes to the race for faster delivery, this newest move could absolutely help draw more customers towards it — and away from Amazon.