Costco Wholesale has reported significant growth in its e-commerce segment, with online sales rising 16.1 percent in 2024 due to its investment in digital transformation.
digital transformation
This growth has contributed to an overall sales increase of 5.3 percent, bringing Costco’s total annual sales to $249.6 billion in 2024 fiscal. The company also saw a sharp rise in net income, which reached $7.367 billion, up from $6.292 billion in 2023.
Total e-commerce sales on a number of digital platforms have become a crucial part of Costco’s business model, representing around 6 percent of the company’s total sales in 2023, amounting to $14.3 billion. The company operates digital platforms in several markets, including the U.S., Canada, the U.K., Mexico, Korea, Taiwan, Japan, and Australia, further enhancing its global presence through a robust digital infrastructure.
Costco Wholesale’s senior management team includes Javier PolitExecutive (Chief Information & Digital Officer), Terry Williams (Senior Vice President — Information Technology) and Mike Parrott (Senior Vice President, Ecommerce), among others.
Costco Wholesale says mobile application downloads surged 29 percent. Costco Wholesale achieved 8 percent growth in site traffic in 2024 fiscal. Average order value on ecommerce platforms grew by 5 percent. Costco logistics deliveries grew by 17 percent. Costco Wholesale says there was improvement in native search on US mobile app.
customer experience
Costco has been expanding its physical footprint, with plans to open 29 new warehouses in fiscal year 2025, 12 of which will be outside the U.S. This international growth reflects the company’s commitment to global expansion while continuing to invest heavily in digital transformation.
One of the key drivers of Costco’s e-commerce growth is its Costco Logistics division, which experienced a 29 percent year-over-year increase in deliveries, particularly in high-demand categories like appliances, furniture, and bulky items. Enhanced delivery capabilities, improved item assortment, and faster scheduling have been instrumental in elevating the customer experience.
Technology investment
Costco’s focus on leveraging technology to improve customer experience extends to both online and in-store environments. The introduction of membership card scanners at warehouse entrances and app-based inventory checks has significantly streamlined checkout processes. The company’s app, downloaded 3.5 million times in Q4, now boasts a total of 39 million downloads, with improved search functionalities doubling click-through rates.
Additionally, Costco’s strategic initiatives, such as the rollout of buy-online-and-pickup-in-warehouse options for TVs, have proved beneficial for both customer convenience and operational efficiency. The program is now being tested for laptops, with positive results expected.
Costco’s ability to engage younger audiences is also noteworthy, with over half of new members in 2024 under the age of 40. This trend, alongside the growing executive membership base, which now accounts for 46.5 percent of paid members and 73.5 percent of global sales, signals a promising future for the retailer.
Costco’s digital-first approach, combined with its continued emphasis on warehouse expansions, positions the company for sustained growth, particularly in e-commerce, which remains a focal point of its strategy heading into 2025.
Baburajan Kizhakedath
