Table of Contents
ISSAQUAH, Wash. — Costco Wholesale Corp. is eyeing the online channel as a way to lure new customers and spur purchases.
Costco Wholesale Corp. is eyeing the online channel as a way to lure new customers and spur purchases.
The warehouse club has been tinkering with its product mix on Costco.com by offering more smaller-ticket items that would increase transaction frequency and potentially attract a younger base of customers, according to chief financial officer Richard Galanti.
In a conference call on Costco’s third quarter results, Galanti told analysts that the retailer has added a limited number of apparel and health and beauty care products as well as replenishable items such as K-Cups and office products to Costco.com.
"In our own way, we are looking to see how we can get items on there that are more regular and frequent to get people to return to Costco.com," he said.
Costco also has highlighted its online outlet in stores to point out to shoppers that its competitively priced large-ticket items, such as electronics and outdoor products, can be delivered to their home, Galanti said.
"Somebody doesn’t necessarily want to have to shuffle it home and install it," he explained. "They are willing to pay for delivery, and certainly our prices are very attractive even on that basis."
He added that Costco also has begun shipping out of more than one depot to sharpen the timing of shipments, including bigger-ticket items.
On the delivery front, Costco has tested home deliveries via Google Shopping Express in the San Francisco Bay area, Los Angeles and Manhattan in recent weeks, Galanti told analysts. The retailer also has tested membership sign-ups through social media shopping sites LivingSocial and Zulily.
"You’ve got a younger member signing up through LivingSocial and Zulily, and it’s a relatively attractive cost of acquisition," he said. "We are not going crazy here. We are taking baby steps. But some of this stuff works."
In the third quarter Costco’s online sales rose 15% year over year, Galanti reported. The retailer operates its online store in the United States, the United Kingdom, Canada and Mexico.
