Delivery service Shipt announced last month that it would pick up Costco orders for customers in Florida, who pay $99 per year for unlimited deliveries from retailers including Whole Foods and H-E-B. The service will expand to 50 markets by the end of the year, opening an opportunity for Beverage brands.
Beverage brands seem like an ideal fit for bulk shopping at wholesale clubs like Costco because of their long shelf lives, and the new Shipt initiative would make bulk shopping even easier. However, just 9% of brands in L2’s Digital IQ Index: Beverages are available on Costco’s website, missing out on the opportunity to sell to its 87.3 million cardholders.
Brands may be reluctant to sell on Costco’s site due to the retailer’s still-evolving search engine, which often fails to provide visibility for brands on their most relevant search terms. For example, Coca-Cola has significantly higher visibility on energy drink terms than soft drinks, appearing on 46% of energy drink terms but only 15% for soft drinks, according to L2 research. However, now that the wholesale club is addressing the e-commerce space and partnering with Shipt, other changes could be on the horizon.