Business

Costco Is Playing a Dangerous Game With the Web

The retailer’s laissez-faire approach to online hasn’t hurt it—yet. One hint of trouble ahead: Half its shoppers subscribe to Amazon Prime.

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By Matthew Boyle

August 24, 2017 at 10:00 AM UTC

This article is for subscribers only.

This article is part of the August 28, 2017 issue of businessweek.

Costco Wholesale Corp. first went online in November 1998, the same year a dot-com upstart called Amazon.com Inc. branched out from books to music and DVDs. Retail giants Target Corp. and Wal-Mart Stores Inc. had yet to make their initial forays onto the web.

Since then, Amazon has surged ahead to dominate e-commerce, and Wal-Mart and Target have invested billions to develop their own digital chops. Meanwhile, online bulk-shopping upstart Boxed.com is mimicking Costco’s warehouse approach—only without the stores. But during all those years, Costco.com just plodded along, growing no faster than the broader online retail market and lacking elements that have become commonplace among web merchants, such as in-store order pickup and an active social media presence.