Customers Like Shopping at Costco Online

Battle for Share of Stomach

It’s never to late to cater to customers.  While Costco was late to get serious about internet retail much like Dominos Pizza was when Costco got serious they had picked up all of the right clues and they are now leveraging long standing customer value to drive incremental sales online according to Steven Johnson, Grocerant Guru® at Tacoma, WA based Foodservice Solutions®.

Just like Dominos pizza going from lager to leader with online pizza sales, Costco is now the new ‘King” online retailers, surpassing Amazon, which held the No. 1 spot since 2010, according to the American Customer Satisfaction Index (ACSI) Retail and Consumer Shipping Report 2018-2019.

The ACSI determines customer evaluations of the quality of products and services available to U.S. consumers, with all measures reported on a scale of 0 to 100, so let’s look at what they found:

1.       Costco scored an 83 on ACSI’s scale, likely thanks to its Kirkland private brand, offering quality products at a low cost, which helps keep competing brand prices low.

2.       With its retail business growth slowing since its acquisition of Whole Foods Market, Amazon retreated 4% to an ACSI score of 82, matching the combined score of smaller online retailers, which are up 1% year over year, per the report.

3.       Target Corp. trails Amazon in internet retail with an ACSI score of 80, while Walmart Inc. anchors the bottom of the category with a score of 74.

Here is what all food retailers need to think about according to the ACSI report, “the internet remains consumers’ preferred method of shopping, despite falling 2.4% to an ACSI score of 80.”

4.       Customer satisfaction with supermarkets sank 1.3% to an ACSI score of 78, according to the report. However, 5.

5.       Trader Joe’s Co. and Wegmans Food Markets showed 1% improvements over the last year, with Trader Joe’s rising to a score of 86—bringing it to the No. 1 spot across all supermarkets and retailers, including e-commerce giant Amazon (82)—and Wegmans rising to a score of 85.

6.       Publix Super Markets fell 2% to tie with Aldi, which remained unchanged, at 84. Costco also remained unchanged in the supermarket category, with a score of 83, while most other large chains declined. For example, H-E-B slipped 1% to 82, and Sam’s Club dropped 2% to 80.

7.       Whole Foods also dipped 2% to 79, despite its acquisition by Amazon, bringing it to a tie with BJ’s Whole Sale Club (down 1%), Hy-Vee Inc. (down 2%), The Kroger Co. (down 2%), ShopRite (unchanged) and the combined score of smaller supermarkets (down 2%).

So, how is your brand evolving to drive food sales, beverage sales, online or in the store? What are you doing to expand your brands customer relevance and drive sales better than other food retailers? Is your brand creating a platform that is consumer interactive and participatory?  No, well we can help.

Invite Foodservice Solutions® to complete a Grocerant Program Assessment, Grocerant ScoreCard, or for product positioning or placement assistance, or call our Grocerant Guru®.  Since 1991 www.FoodserviceSolutions.us  of Tacoma, WA has been the global leader in the Grocerant niche. Contact: Steve@FoodserviceSolutions.us or 253-759-7869