Costco's Digital Ecosystem Emerges as a Powerful Growth Engine

Costco Wholesale Corporation’s COST digital ecosystem has become a primary growth driver, supporting member engagement and sales growth. The company reported a 20.5% increase in digitally enabled comparable sales for the first quarter of fiscal 2026, outpacing the overall comparable sales growth of 6.4%. This increase was driven by a 24% rise in e-commerce site traffic and a 13% increase in average order value. Key categories contributing to this online momentum include pharmacy products, gold and jewelry, tires, small electronics and apparel.

The company is taking all possible measures to make shopping easier and more personalized. This includes improved product display pages that have led to higher conversion rates and continued upgrades to search capabilities. A major highlight of the quarter was the launch of personalization capabilities that provide members with relevant product recommendations based on their search history.

Same-day delivery also proved to be a key driver. Costco noted that its same-day delivery service, offered through Instacart in the United States and Uber Eats and DoorDash internationally, performed extremely well. This reflects strong member adoption of convenience-focused fulfillment options.

Costco is integrating digital tools within its warehouses to enhance the physical shopping experience. The introduction of the Costco Digital Wallet and pre-scanning technology has increased checkout speeds by up to 20% in some locations. Additionally, artificial intelligence is being utilized to optimize pharmacy inventory systems and gas station business management. This AI integration has improved in-stock levels to more than 98% while supporting mid-teen growth in pharmacy scripts filled.

These developments indicate that Costco is effectively bridging the gap between its traditional warehouse model and modern digital ecosystem while maintaining its core values.

Digital Engagement Trends at Walmart & BJ’s Wholesale

Walmart Inc. WMT is also leveraging engagement-led convenience as a growth driver. In the third quarter of fiscal 2026, Walmart posted 27% global e-commerce growth and highlighted faster delivery — 35% of digital orders delivered in under three hours — supporting higher frequency and broader basket adoption. Walmart continues to pair digital innovation with advertising and membership gains, helping Walmart sustain traffic growth and share gains across categories.

BJ's Wholesale Club Holdings, Inc. BJ is seeing digital engagement translate into sales momentum. In the third quarter of fiscal 2025, BJ’s Wholesale reported digitally enabled comparable sales growth of 30%, driven by BOPIC, same-day delivery and ExpressPay usage. BJ’s Wholesale also emphasized that digitally engaged members are more valuable, reinforcing how omnichannel tools deepen loyalty and lift lifetime value.

What the Latest Metrics Say About Costco

Costco stock has declined 7.4% over the past year against the industry’s growth of 4%.
 

From a valuation standpoint, Costco's forward 12-month price-to-earnings ratio stands at 41.21, higher than the industry’s ratio of 29.45. COST carries a Value Score of D.
 

The Zacks Consensus Estimate for Costco’s current financial-year sales and earnings per share implies year-over-year growth of 7.5% and 11.7%, respectively. For the next fiscal year, the consensus estimate indicates a 7.2% rise in sales and 9.2% growth in earnings.
 

Costco currently carries a Zacks Rank #3 (Hold). You can see the complete list of today’s Zacks #1 Rank (Strong Buy) stocks here.

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This article originally published on Zacks Investment Research (zacks.com).

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