Costco Launches Grocery Delivery Service With Much Higher Prices (Oct 9, 2017)
Costco has launched a new online grocery shopping service, which will offer two-day delivery nationwide. There’s only a small delivery fee, but that’s a little misleading because the list prices for the items ordered in this way will be 15-17% higher than prices customers would encounter in stores. The irony here is that Costco’s stores are in some ways very much like warehouses, and therefore offer many of the same cost benefits as actual warehouses, meaning that e-commerce doesn’t provide many savings in that department, while shipping for the bulk items Costco typically sells would be disproportionately expensive. It would certainly be more transparent for Costco to be explicit about shipping while keeping the prices the same, but it’s likely banking on consumers making the same assumptions they make in its stores, namely that buying in bulk is always cheaper, without actually checking prices. That’s a tougher sell online, though, where comparison shopping is only a browser tab away. In other words, all this feels like a box-checking exercise against Amazon rather than a serious attempt to actually sell many groceries this way, which makes you wonder whether it’s worthwhile at all. Meanwhile, Amazon’s massive logistics advantage just continues to grow.
via GeekWire
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