Costco's leadership changes will usher in major changes to its digital business

It is learned that according to foreign media reports, Costco will usher in major changes after the new leadership takes office, which marks a shift in its operating strategy. Costco, which has always been known for its cautious use of new technologies, has always lagged behind competitors such as Walmart and Target in digital business . This cautious attitude stems from the company's philosophy of focusing more on maintaining low prices for members rather than pursuing technological advancement.

Costco is entering a period of change with the appointment of Ron Vachris as CEO and Gary Miller as CFO.

One of Vachris' key initiatives after taking office was to expand Costco's e-commerce capabilities. Previously, Costco had not adopted features such as guaranteed one-day delivery and same-day delivery, instead choosing to cooperate with third-party services such as Instacart. However, Vachris is currently committed to trialing and improving the online purchase and in-store pickup model, first focusing on electronic products such as televisions, and plans to gradually expand the service scope.

Four years ago, Costco acquired Innovel Solutions, which enhanced its ability to deliver and install large online purchases such as TVs and appliances. In addition, the recent cooperation with Uber Technologies has been expanded to cover the delivery of goods in 17 states in the United States and Canada, and plans to expand the service to international markets. It has further improved the "buy online, pick up in store" plan.

In addition, Vachris also emphasized the importance of enhancing member online and store interactions. More than 90% of Costco's global members renew their memberships, and the company hopes to deepen its relationship with members, drive business growth, and improve member loyalty through technological innovations (such as enhanced member benefits and travel services).

Despite these forward-looking plans, Vachris stressed that the changes will be evolutionary, not revolutionary. He stressed that Costco's effective strategy will remain unchanged and will continue to innovate to meet the needs of its members, strive to maintain the company's core values, and adapt to the changing retail market.

In addition, Vachris also emphasized the strategic use of data to drive retail business development. By expanding the data analysis team, Costco plans to better utilize information assets, enhance member experience and promote sales, thereby unlocking the company's huge potential.

The good news for Costco's loyal fans is that the iconic $1.50 hot dog and soda combo will not increase in price. At the same time, Costco will continue to publish monthly sales reports to maintain transparency with consumers. In addition, the company currently has no plans to increase membership fees, which undoubtedly brings a little comfort to the majority of members.

With Millerchip as CFO, Costco's digital business is poised for significant growth. As of May 12, 2024, Costco's digital sales grew more than 20% year over year, with online sales of high-value items such as gold bars and large appliances outpacing total sales.

Despite these advances, digital sales still account for less than 10% of Costco's total revenue, according to Millerchip. Millerchip plans to expand online product offerings and improve the digital shopping experience. This may involve increasing the number of vendors on Costco's online marketplace and ensuring that any expansion is consistent with Costco's reputation for quality and value.

Millerchip also sees potential in other revenue streams, especially in the marketplace. By leveraging technology to enhance data analysis, Costco is able to more effectively customize supplier and brand advertising, using low-price traffic strategies to increase brand awareness and sales.

Author✎ Summer/
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