For a generation of consumers who grew up shopping online, how much do stores matter?
In a move to attract shoppers whose expectations about retail were formed in the age of Amazon, Costco plans to link its physical and digital stores. Showcase sections of the warehouses will let shoppers see and touch products that were previously only available online; these products can be purchased from iPad-sporting salespeople who order them from the site and arrange for home delivery. In November, Costco also began testing a system to allow customers to pick up high-value items ordered online, such as jewelry and laptops, in its warehouses.
In the past, the company has not done much in the way of omnichannel features, as its Average rank in L2’s Digital IQ Index: Big Box makes clear. Unlike competitors Walmart and Home Depot, Costco has no “Shop Your Store” options, so shoppers can’t see whether items that show up online are available for purchase in nearby physical locations. And while Walmart has focused on mobile omnichannel features, such as letting shoppers expedite the return process by starting it on their smartphones, Costco’s app lacks omnichannel functionality.
Yet in the face of several superstores falling behind due to the convenience of online shopping, Costco has begun to invest in omnichannel. The retailer is in a unique position where traffic to its physical stores is still booming, up 5.9% in Q4. Incorporating more omnichannel initiatives could be the key to keeping Costco relevant among the new generation.