Industry Analysts So in Love with Amazon, Missed Costco's Blowout Quarter
Flash back to several months ago when many of the retail industry experts claimed Costco was in trouble. According to these experts the mighty Amazon train was unstoppable, the King of Retail from now on is Amazon. I said they were wrong about Costco being hurt by Costco, and made the point these so-called industry analysts are mostly misinformed pontificators, not to be followed.
Articles like this one, Costco Is Playing a Dangerous Game with the Web by Matthew Boyd of Bloomberg concluded that Costco’s “laissez-faire approach to online hasn’t hurt it—yet. One hint of trouble ahead: Half its shoppers subscribe to Amazon Prime.”
Their was this theory going around with some analysts that Costco members also have Amazon Prime memberships, Costco members might cancel their memberships with Costco, and transition to Amazon Prime. These conclusions are purely hypothetical in nature, and not based on any empirical evidence that Costco members are actually leaving Costco. Yet based on all of these stories the market reacted as it often does, irrationally. By mid-July 2017 shares of Costco stock had fallen from a high of $189 to $150.
In my opinion, operationally, Costco is the best run retailer in retailer in the Country, and Amazon cannot create a model that competes with Costco from the Cloud. Then there is the fact that just 4% to 8% of consumers currently purchase their groceries online. That is terrible number right now, but it does afford Costco plenty of time to adjust their eCom site strategy should that become necessary.
And as of today, Costco is exactly where it needs to be, Costco's stock is up almost $8 a share and pushing north of $192 a share after the just announced quarter saw their eCom business rise 43%. Not bad for a company that supposedly has a poor ecom strategy. Hopefully you read my post back when I said anyone not buying shares of Costco stock at $150 or $160, are nuts. If you did purchase some shares, go to Costco this weekend and buy yourself something special, you earned it.
Founding Team | Director, Strategic Partnerships @ OLIPOP PBC
6 年Two things - 1.) I wonder what % of Costco ecom sales are B2B vs B2C. I know they have a huge B2B business for offices, co-working spaces etc. 2.) I find it strange that ppl think Amazon prime will infringe on Costco. Boxed is really the one that is quietly building a real competitor to Costco in the ecommerce space... cc Jeffrey Gamsey
I may be in the minority among millennials... I have slowly been buying more groceries online (mostly specialty/hard to find items) but overall I enjoy the process of grocery shopping and food discovery... happening upon new products and brands and engaging with them via samples. How do you see companies like Blue Apron impacting or integrating into this space? My most recent box included a specialty tahini brand that I ended up purchasing... from Amazon.
Marketing Consultant @
6 年Great Share RB. Thank you??