As retailers compete for consumers’ omnichannel loyalty, Costco is driving digital growth with a somewhat unconventional approach — selling precious metals.
The membership warehouse club chain shared in its second quarter fiscal 2024 financial results Thursday (March 7) that digital sales were up 18.4% in the quarter, and much of that growth comes from its sales of precious metals.
“eComm showed strength in several areas led by sales of gold and very recently silver as well,” Costco CFO Richard Galanti told analysts on a call discussing these results.
According to a CNN report Thursday, the chain recently began selling silver coins online, offering for instance 25 1-ounce coins for $675. Per Costco’s site, the item is exclusively for members. Plus, the retailer shared in its previous earnings call that its move to sell 1-ounce gold bars to members resulted in $100 million of gold sold during Q1.
The Associated Press cited speculation from experts that investor interest in precious metals is being driven by an overall sentiment of economic uncertainty.
In addition to this play for precious metals collectors’ digital spending, Costco is taking the lag time out of its mobile platforms to drive eCommerce sales as consumers increasingly expect frictionless online experiences.
“In February, we rolled out our new native mobile application homepage on iOS. The native homepage now loads in less than two seconds, compared to eight seconds previously,” Galanti said. “Needless to say, that’s important when about 60% of our eComm business, both visitors and orders, are now done via our mobile app and browser.”
Changes of this kind can be key to driving consumers’ digital loyalty. The PYMNTS Intelligence study “The Online Features Driving Consumers to Shop With Brands, Retailers or Marketplaces,” which drew from a survey of more than 3,500 U.S. consumers, revealed that 40% of shoppers consider how easy to navigate a given merchant’s online store is when deciding where to make purchases.
Indeed, users expect speed and efficiency when using mobile apps, and if an app takes too long to load, they may become frustrated and abandon it. A smooth and quick loading process boosts user satisfaction and encourages them to continue using the app. Indeed, when users can quickly access products, browse through categories, and complete transactions without delays, they are more likely to convert into customers.
Moreover, search engines such as Google consider page speed as one of the factors when ranking websites and apps. A faster-loading app is more likely to rank higher in search results, improving its discoverability and attracting more organic traffic.
In an effort to further drive digital engagement, the retailer has been looking to grow consumers’ perception that they will be getting a good deal if they shop online with Costco.
“In terms of eCommerce sales over the past few months, we believe we’ve done a much better job explaining to our members the significant value propositions we offer compared to traditional competitors in several big-ticket categories,” Galanti stated.
As the retailer continues to emphasize the value proposition of online shopping with Costco, it aims to cement its position as a leader in the digital retail space.
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