Your Costco run is about to get a lot faster.
The warehouse giant is reportedly overhauling its checkout process, piloting new automated stations that promise to process orders in under 10 seconds. By blending employee productivity with high-speed tech, Costco is betting it can solve the retail industry’s biggest headache without losing the low-cost model that keeps its members loyal.
“In digital, we continue to make strides with our roadmap to deliver a more seamless experience for members in warehouse and online. In the warehouses, we are achieving meaningful improvements in the speed of checkout and employee productivity, both as a result of our mobile wallet enhancements, pharmacy pay ahead and the rollout of employee pre-scan technology,” Costco CFO Gary Millerchip said in the company’s second-quarter earnings call earlier this month.
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Under new CEO Ron Vachris and Millerchip, the warehouse club is pivoting from its traditional checkout roots to a high-tech pre-scan model and automated pay stations. At first, employees will expedite the pre-scanning process before customers reach the register.
Costco has previously tested self-checkout at select stores, but the system did not appear to stick.
“We are also piloting automated pay stations that will allow members to pay for their pre-scan orders seamlessly with an average transaction time of around eight seconds,” Millerchip added. “Early results show this is improving the flow of traffic, and we have received great member feedback.”
Leadership also discussed embracing AI and e-commerce shifts on the call that rivals have used to dominate the convenience shopping market.
“On our digital sites, we continue to roll out new personalization capabilities which are resonating well with our members and are starting to have measurable impact on e-commerce sales growth. As consumers embrace AI in their shopping habits, we believe our commitments to providing the best value on great quality items can make us a beneficiary of these shifts,” the CFO said.
New data from the NCR Voyix Digital Commerce Index reveals a generational divide in how Americans want to pay at the register. While 43% of all consumers now prefer self-checkout options, 53% of shoppers aged 18 to 44 prefer the DIY method, while those 55 and older stick to manned lanes, citing large cart volumes as the primary reason for avoiding self-checkout.
While many big-box retailers have passed on inflationary costs to consumers in recent years, Costco has maintained its popularity with middle-class Americans due to its roughly 14% to 15% cap on product margins. Traditional grocers typically have a 25% to 35% product margin, making Costco’s prices highly competitive.
Costco’s net sales surged 9.1% to $68.24 billion in the second quarter, with net income hitting $1.36 billion — a 13.6% increase year over year following a membership price hike.
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