As a former Costco member, I rarely encountered any store personnel during my shopping.
That’s not true in every area of the store. My father-in-law, for example, ran the hearing aid department in the New Britain, Conn., store for many years, and that section required a high level of human interaction.
The same could be said for the pharmacy and the eyeglass section, if your warehouse has one, but the main selling floor offers limited customer service help.
That’s usually not a detriment, but there are some Costco quirks I found challenging. The chain, for example, sells mattresses at good prices, but stores them all stacked up so you can’t test them.
It also sells clothes, but lacks dressing rooms (or at least the warehouse I have been in has lacked them). Now, the membership-based chain has leveraged its app to offer more convenience for its members.
Not every change has been rolled out to members, but CFO Gary Millerchip explained some of the changes Costco has, or will, make to its app and website — changes that will impact in-store shopping — during Costco’s first-quarter earnings call.
Costco improves its app, and website
Millerchip would not share how many members use its app, but did say that the number has grown.
“We’re continuing to make enhancements to the website, to the app, and really as we’re delivering more relevancy to members through those channels. And so we are continuing to see growth. We did share the prepared remarks that traffic was up 24% during the quarter on the website, and it was up even higher than that in the 40% plus range on the app during the quarter,” he offered.
CEO Ron Vachris shared some of the changes Costco has been working on.
“Very excited about what we have coming in the app. I mean, more engagement, more lock in. The brick-and-mortar business with the virtual digital business as well. And, as we continue to roll out enhancements, we’ve got pay ahead for the pharmacy coming, we’ve got ordering cakes and deli trays online coming,” he shared.
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Vachris acknowledged using the app to address customer pain points.
“Many of the things that we’ve heard from our members that could be a little bit clunky are now moving to a digital state, and we’re seeing great adoption right out of the chute,” he added.
Costco now offers digital membership cards.
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Costco’s app fixes one problem for members
Costco now checks membership cards at the doors of many of its warehouses. If a member forgets their card, the process to get in can be laborious.
The app fixes that.
“So we continue to see some upside to the continued growth and the digital value of having the app and using the digital membership card, the Costco wallet, those things have all got a very nice road map the next 12 months,” Vachris added.
The digital membership card is an in-app version of your physical Costco card, and it can be used to verify membership.
How to download a Costco digital membership card
- Download the newest version of the Costco app from the App Store or the Google Play store.
- Launch the Costco app, then tap the Card icon at the bottom of the screen. The login page will appear.
- Follow instructions on the login page to sign in with an existing Costco.com account. If you do not have an existing Costco.com account, create one now. Each Digital Membership Card is tied to a specific Costco.com account. You cannot use the same email address for multiple Digital Membership Cards.
- Verify your membership. If you have not previously verified your membership, you will be prompted to do so. To learn more about verifying online, click here.
- View your Digital Membership Card. After successfully verifying your membership, the Digital Membership Card will appear on your screen. Source: Costco
Experts share their thoughts on Costco’s technology opportunity
When Vachris and Millerchip took their jobs, GlobalData Managing Director Neil Saunders saw it as an opportunity for the company to make some technological improvements.
“The new CEO thinks there is an opportunity to use technology better,” Saunders wrote on RetailWire. “In my view, he is correct in his assessment. Costco can improve in areas like collect-from-store, checking what’s in stock at the warehouse, and making the e-commerce process easier,” he wrote on RetailWire.
Mellissa Minkow, who has spent multiple years leading retail strategy at brands including Target, thinks Costco’s efforts don’t have to lead to more digital sales.
“Investing in technology doesn’t need to mean that you’re expecting tons of growth via digital channels — investing in technology can also/instead mean improving backend systems for a better in-store and/or omnichannel experience. It’s important that Costco evolve with the times, and investing in technology is synonymous with that,” she posted on RetailWire.
Brian Delp, another RetailWire Brain Trust member, believes Costco can find the right ways to integrate technology.
“There are certainly ways Costco can evolve with technology while staying true to its core values. A big element to Costco is the lack of frills; however, reducing friction for the consumer and simplifying the experience is related. How Sam’s Club introduced AI image tracking to reduce the long lines when leaving the store is just one example,” he shared.
PYMNTS.com shared reported strong digital growth for Costco in Q1. Digital comparable sales rose 21%, app traffic jumped more than 40%, and e-commerce order values increased 13%. AI-driven pharmacy inventory tools helped keep in-stock levels above 98% and supported mid-teen growth in scripts filled.
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