Confirmed: Costco stands up to Walmart and makes a key decision in the USA

Costco has never been a company that leads in innovation, but it has been known for offering low prices to its members. Its strategy has traditionally been to keep what works, innovating only when necessary. However, in recent months, it has taken decisive steps that show a change in how it competes in the United States.

During the pandemic, Costco took control of its own shipping containers, a measure born out of necessity, but one that showed its ability to adapt quickly. In addition, the company created Costco Logistics, a delivery system to handle large orders. This strategy allows it to compete more effectively with giants like Walmart.

Costco logistics: the commitment to an in-house delivery system

Costco Logistics handles between 20% and 25% of the company's total deliveries, but manages 80% to 85% of large orders, such as furniture, televisions, or safes. Ron Vachris, Costco's CEO, explained during the third quarter earnings call that buyers have the freedom to decide which products to ship through this network. This strategy allows the company to optimize delivery costs, improve supply chain management, and reduce dependence on external providers.

The focus on in-house logistics not only improves efficiency, but also ensures that special items arrive in the best possible condition. This strategic move is a direct response to the need to stand out in a market dominated by Walmart, which also invests heavily in its delivery system and e-commerce.

Digitalization as the key to future growth

Beyond logistics, Costco is betting on its digital platform. For years, the company kept a website without selling products online directly. This has changed and now, in addition to selling products from its warehouses, it offers merchandise through third-party sellers. Costco's Chief Financial Officer, Gary Millerchip, stated that "more than half have downloaded the app, but we still see a lot of room to grow in digital use" among its members.

Millerchip noted that they are constantly improving the app experience, optimizing inventory, the search function, and communication with users. All of this translates into greater digital interaction, which, according to him, will drive above-average growth for the company, reports The Street.

In addition, Vachris highlighted that the app speeds up the checkout process in-store, thanks to the use of digital cards integrated into a "digital wallet." He also mentioned successful tests of "Scan & Go," which allow Costco members to make quick, wait-free payments.

This digitalization not only improves the customer experience, but could also revolutionize Costco's operating model. According to Millerchip, there are still many opportunities to discover in digital use, which suggests that the company is ready for a deep change.