CBS Local– If you thought Amazon was the be all and end all of the online retail market, think again.
According to a market study conducted by BMO, Costco has the potential to grow more online into spaces currently occupied by Amazon as the former has cheaper prices than the latter.
National brands were found to be 19 percent cheaper online at Costco than Amazon, while Costco’s own brand, Kirkland, is 16 percent cheaper on Costco’s site than Amazon.
“We believe Costco is testing ways to become more of a destination for convenience-oriented fill-in purchases online,” BMO said, via MarketWatch.
Costco is setting itself up well according to analysts, but still has room to improve. While they’re well positioned to survive online next to Amazon and Walmart, their e-commerce presence could be improved.
“While we do believe Costco remains strong merchants and consistently delivers a great in-store experience and treasure hunt atmosphere, we believe the retailer should intensify focus on e-commerce to fortify its business for long-term success and sustain industry leading traffic and comps growth,” Cowen & Company said, via MarketWatch.
The flexibility Costco has shown, and is predicted to keep showing, bodes well for the company going forward.
“[There is] considerable flexibility in Costco’s business model allowing for proactive reinvestment to retain a superior value proposition,” Stifel said, via MarketWatch. “We think this flexibility results in Costco retaining a more advantaged position relative to retail peers.”