Costco highlighted its expansion of third-party same-day delivery channels in the United States in a presentation released Thursday, saying that this is one of the company’s digital enhancements and that it offers Costco products delivered in as fast as an hour from DoorDash, Instacart and Uber Eats.
“We see it as a great addition to the offering, and there is a subset of people that really take advantage of this, and that tends to be the younger customers that we have that resonate more with the immediacy of delivery, and they want that then,” Vachris said during the call.
Costco has found that the same-day delivery business is incremental to its existing business, as customers still visit its stores regularly. They tend to use the delivery offering for fill-in shopping between visits, though some use it more frequently, Vachris said.
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Costco’s digitally enabled sales saw year-over-year increases of 19.5% during the most recent quarter and 20.9% during the most recent fiscal year, according to a Thursday press release. Vachris said during the call that these sales include third-party delivery.
DoorDash announced Sept. 17 that Costco is now available on the DoorDash Marketplace across the U.S., with same-day delivery by DoorDash, marking an expansion of the companies’ global partnership that already spans Australia, New Zealand, Sweden, Iceland and Puerto Rico.
Uber Technologies announced a day earlier, on Sept. 16, that it and Costco expanded their partnership to offer on-demand or scheduled delivery of Costco products through Uber Eats in 47 U.S. states. Previously, the partnership covered 17 states.
Vachris said during Thursday’s earnings call that these partnerships complement Costco’s successful long-term partnership with Instacart in the U.S. and Canada.
The PYMNTS Intelligence report “Global Digital Shopping Index: The AI-Powered Shopper Has Arrived” found that consumers ramped up their remote purchases with delivery by 4.5% over the past two years. The report also found that 36% of merchants plan to add or improve their “buy online with delivery” capability in the next three years, and 27% plan to do the same with “marketplace/delivery partnerships.”
Costco’s new same-day delivery partnerships represent a further expansion of the ways in which Costco members can engage with the company online, Vachris said.
“Members using these new marketplaces are significantly younger than our overall member base,” Vachris said. “Average delivery times across all three platforms are under an hour, bringing increased convenience in addition to our great values.”
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