By Eugene Kim
Costco has been able to weather the storm from online retailerslike Amazon by building a strong membership model and incentivizing visits to its physical stores — causing some analysts to call it “Amazon-proof.”
But its CFO, Richard Galanti, doesn’t believe his company will forever be immune to the growth of Amazon.
“We don’t buy that for a minute,” Galanti said during Costco’s earnings call Thursday, referring to reports that dubbed his company “Amazon-proof” or “internet-proof.”
Galanti also admitted that he’d expect internet retailers to continue to make an impact on traditional big-box retailers. Earlier this week, Cowen & Co. published a report indicating Amazon’s Prime membership program is growing at the expense of traditional warehouse club brands like Costco and Sam’s Club.
“At the end of the day, we will expect that. The internet in general is going to take its percentage of different categories,” Galanti said during the call.
Instead, Galanti said Costco will continue to focus on improving its in-store experience while slowly expanding its online presence — although he doesn’t see the company offering on-demand delivery service, like food deliveries, anytime soon.
“Our value proposition is best served for us when it’s in-store getting members to come in and buying when they can see everything there that we have,” he said.
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