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Costco Seeks To Mesh Online, Warehouse Sales To Better Attract Millennials

A Costco Wholesale store

Costco hopes to entice millennial shoppers by offering a more robust selection of online same-day and two-day delivery options, while still giving shoppers reasons to visit its stores.

Younger shoppers may yet to be in the market for Costco-sized shopping trips, but millennials make up 40% of its new-member sign-ups, according to the Seattle Times. The store hopes that as millennials get older and have larger families, they will begin spending more money in the warehouse.

Costco is thinking ahead about how it can meet this generation’s shopping needs, but still bring buyers into the stores where they may find something that was not on their shopping lists. That balance is leading to items displayed in-store for online purchase or online orders picked up in-store.

For example, in-store showcase areas are used to introduce shoppers to online-only items. Such items can then be purchased on the spot for home delivery. The warehouse store has five e-commerce sites in six markets.

Costco President and CEO Craig Jelinek told the Seattle Times that the company plans to expand its e-commerce platform to Australia, Japan and China in the next two to three years. 

Costco’s e-commerce grew by 40% during the holiday season.

At the same time, the warehouse giant began testing a system that allows customers to pick up high-value items, like jewelry and electronics, at the warehouses.

Home-delivery options are expanding as well. Two-day home delivery of nonperishable items is available, and fresh items will be delivered the same day through a partnership with Instacart.