Costco Wholesale Corporation managed to become back in 2015 the world’s second largest retailer. The membership-only warehouse club was encompassed only by Walmart. However, the main competition is between Costco, Sam’s West, and BJ’s Wholesale Club. They are all targeting businesses and large families that are interested in buying quality products in bulk at low prices. To consolidate its position, Costco is ready to deliver fresh groceries from door to door.
The New Delivery of Fresh Groceries Will Start off in Tampa
On Tuesday, Costco announced a new partnership with an ambitious, young startup called Shipt. The two of them are going to work side by side to manage orders from customers. This marks another major effort for brick-and-mortar stores to compete with online services.
The new option for clients will be available in Tampa for starters. If everything goes according to plan, Shipt will be ready to conquer other 50 countries. By the end of the year, the startup projects to cover more than 30 million businesses and households.
Retailers are struggling to remain relevant in an industry with thin margins. Home delivery of fresh groceries represents an expensive way to win customers over. This strategy simulates the activity of an online store that saves the users from making any trips to the local market and from waiting in line.
The Delivery Services Experience a Productive Period
Thus, the delivery sector experienced a boom recently as more traditional companies desire to offer premium services to their customers. Such prosperous solutions are Instacart, Google Express, Amazon Fresh, and FreshDirect.
Moreover, major organizations such as Walmart and Kroger teamed up with behemoths in the transportation domain. Thus, they are testing an innovative delivery approach with Lyft and Uber. In an effort to save customers time, Sam’s Club, one of the main rivals of Costco, launched a drive-by pickup system at its own locations.
The startup Shipt is not at its first major such quest. The delivery service has already signed contracts with Whole Foods Market, Harris Teeter, and H-E-B. At the beginning of the month, Shipt won another contract from the supermarket chain, Meijer. The retailer was content with its development. Thus, the company will rely on Shipt services to deliver fresh groceries in six Midwestern states.
Shipt employs a subscription business format actually. Customers have to pay an annual fee of $99. Once they purchase their membership, they can enjoy unlimited deliveries. They have one hour at their disposal to pick up their order when the package is dropped off.
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