April 10, 2017
Costco Wholesale Corp. hasn’t completely jumped on the e-commerce bandwagon, yet. The bulk retailer has its reasons for taking a measured approach to online sales that almost appears contrarian.
Competition and investors are pushing Costco to take e-commerce more seriously, but the Washington-based retailer’s reluctance is understandable.
First, Costco’s strong store sales have actually held up, outperforming other brick-and-mortar chains, while its online sales have slowed. Its success has been built on a “treasure-hunt” experience in its 725 stores, as customers discover new products that cycle through and spur impulse purchases.
Additionally, Costco must figure out how to address some tough financial considerations associated with online sales. Namely, shipping costs that could penalize Costco’s bulky-sized products. Since carriers now charge by dimension, as well as weight, that will eat into profit margins.
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