Costco is looking toward technology to improve the customer experience at its brick-and-mortar and online stores without significantly changing the retail giant’s proven business strategy, the company’s chief financial officer said.
Costco CFO Gary Millerchip was taking questions from analysts during Costco’s third quarter earnings call earlier this year when he was asked what the company thought about being "more aggressive" with the evolution of its retail business model by deploying more technology in its store and adding options like buying online and picking up in store.
"We are working on all those aspects right now," Millerchip said, according to The Street. "We're rolling out an expanded buy-online-pickup-in-warehouse. That is always going to be limited in scope based on the volume in our warehouses that we have."
Millerchip said that Costco can’t expand to all categories, though it is currently expanding on electronic items currently in stores, such as televisions, and sees that as a "real opportunity for us."
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"Technology is going to be one of our key priorities moving forward," the CFO said. "How do we improve that member engagement and the relationship we have with them in our brick-and-mortar warehouses, as well as online, and through other aspects such as travel and so forth?"
Millerchip said that Costco is always looking to innovate when it comes to its relationship with its members.
"Technology we see is a great opportunity to enhance the member relationship with Costco and also drive a lot more business for us as well as we move forward," he said.
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Millerchip watered down expectations for any significant changes to what he called the company’s "proven strategy" for big-box retail.
"I wouldn't expect major changes as we have a proven strategy now," he said. "But as we've done for the past 41 years, we continue to innovate to the needs of our members."
Costco’s third-quarter revenue beat expectations in May, with a total revenue of $58.52 billion, compared with analysts' average estimate of $58.07 billion, according to LSEG data.
The company also posted a profit of $3.78 per share, above estimates of $3.70.
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Earlier this month, Costco announced plans to increase annual membership fees by $5 to $10 in the U.S. and Canada, effective Sept. 1 – the retail giant’s first price hike in seven years.
