Costco Finally Getting Serious About Ecommerce

Costco acknowledges that it’s lagging in ecommerce. As competitors built out their offerings – in the last year Target has invested in IT and improving its search function while Walmart tripled its online range and now offers grocery pickup at hundreds of stores – Costco remains largely a bystander.  Its online sales of around $4 billion (about 3% of sales) are lower than those of much smaller stores such as Best Buy or Macy’s.  Chief Financial Officer, Richard Galanti, recognizes that the company doesn’t meet industry standards but says that this will change. Improvements include increasing the number of high-end brands available online, improving search and streamlining checkout. It will also rollout better order tracking and simplify returns. In all this, Costco must balance its desire to offer a limited number of items (the average store carries about 8,000 against some 150,000 at a Walmart) and its desire to remain a physical destination where it feels it can better differentiate.