During its fiscal fourth quarter ended Aug. 30, ecommerce sales for Costco.com spiked 90.6%. Costco is now focusing on 'low-hanging fruit' ecommerce strategies.

Increased online shopping during the coronavirus pandemic led Costco Wholesale Corp.’s online sales to grow at the highest rate in the last five years during its fiscal 2020.

Costco’s online sales grew 49.5% in the last 12 months ended Aug. 30 (its fiscal year), though it did not break out specific online sales figures. During its Q4, ecommerce accelerated 90.6%, even faster than the 64.5% year-over-year growth in fiscal Q3 ended May 10.

Comparatively, web sales grew 7.9% in fiscal 2019 and 9.7% in fiscal 2018.


“Overall, our [ecommerce] sites were relatively smooth during the quarter despite the dramatic volume increases, and we were able to improve our delivery times throughout the quarter as we adjusted to the ramped-up order volumes,” executive vice president and chief financial officer Richard Galanti said on the call, according to a SeekingAlpha transcript.

Costco is now focusing on ecommerce strategies that the company found to be “low-hanging fruit,” executives said. One example is collecting member email addresses and communicating with them more frequently online.

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Three or four years ago, Costco had email addresses for only about a third of its members because the company didn’t focus on that as an initiative, Galanti said on the call. Now, the retailer has more than 60% of its members’ emails. They’ve also begun using email marketing to drive in-store promotions in addition to its online promotions.

Additionally, grocery sales contributed to its ecommerce sales growth during the fourth quarter, executives said. Online grocery sales grew approximately 100% in Q4.

Total revenue grew just 9.2% for the year to $166.8 million from $152.7 million in fiscal 2019. In the fourth quarter, revenue was up 12.4% to $53.4 million from $47.5 million. Since Costco is defined an “essential” business, it did not experience any temporary store closures as a result of the COVID-19 pandemic. However, it did shut down some of its in-store services like optical care.

Percentage changes may not align exactly with dollar figures due to rounding.

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