Costco announced last week that it's offering customers same-day grocery delivery. On Thursday, the company announced two new delivery options: two-day delivery for dry goods, and same-day delivery for orders that include fresh foods. The same-day service will be powered by grocery delivery company Instacart. The same-day delivery option, available in “most metropolitan areas,” lets customers choose a one-hour window during which their order will arrive. For orders of less than $35, there's a delivery fee. Prices on the goods will be about 15 percent to 17 percent higher than in stores. Costco said an additional 10 percent service fee will be added at checkout, though shoppers “may elect not to pay the service fee.”
Total Retail's Take: Grocery delivery is becoming increasingly important as consumers look to save time and add convenience. It's a trend that many brands are trying to cash in on, including Amazon.com. However, online grocery shopping will not by any means replace Costco's unique selling proposition: its warehouse stores. In my opinion, the delivery options will be just another addition, not necessarily a pivot toward solely e-commerce. The new delivery options could also enable Costco to expand its reach beyond customers who are close to the mega warehouse stores, and the inclusion of the one-hour window for same-day deliveries is another added bonus, especially for fresh foods.