Costco has been notoriously slow to break into the world of online shopping, but billionaire investor Charlie Munger says it has the power to be an online “titan”.
Speaking at the Daily Journal’s annual meeting on Wednesday, Munger, Warren Buffett’s right-hand man, said: Costco is going to be an absolute titan on the internet because they have curated products that everyone trusts and a huge purchasing power over a limited number of storage units.
He continued, “I wish everything else in America worked as well as Costco. Think what a positive thing that would be for all of us.
Munger sits on Costco’s board of directors and previously owned Costco stock through Buffett’s investment firm Berkshire Hathaway, of which Munger is vice chairman.
When it comes to selling online, the benefit of offering products that customers already know and trust — like Kirkland Signature, Costco’s wildly popular and successful private label collection — is that shoppers feel more comfortable buying these items without having to go to a store to check them out first.
And having a limited number of products could give Costco an advantage because it simplifies e-commerce logistics and delivery.
Costco’s online offering has been limited so far. It currently offers two-day delivery service on essentials such as groceries and cleaning supplies and same-day delivery services in most US cities through its partnership with delivery company Instacart.
But its e-commerce branch is growing. E-commerce sales grew 44% in fiscal 2021 compared to the same period a year earlier.
Despite its limited online presence, Costco is one of the strongest brick-and-mortar retailers in the United States and one of the most valuable stocks in the industry. It remains competitive with Amazon through its membership model and keeps customers coming back to stores by offering deals, discounts and services such as cheap gas and vacations.