As a retail consumer behavior expert and self-proclaimed “Costco Fanatic”, I get asked constantly whether America’s favorite bulk warehouse now offers convenient curbside pickup services.
With hectic schedules and home delivery growing outdated for many, contactless drive-up pickup has exploded in popularity the past few years as part of a larger trend I call “right-now retail.”
A full 60% of consumers now expect the ability to quickly drive through and grab same-day online orders from stores they frequent regularly. And it’s not just a nice-to-have anymore – 52% would switch retailers if a competitor provided better pickup offerings tailored to their on-demand lifestyle needs.
Top national chains like Walmart, Kroger, and Target have invested heavily in curbside services to respond to shifting consumer expectations and win market share.
So where does member-favorite Costco stand on enabling this retail game changer?
Costco did briefly pilot contactless grocery order pickup in 2021 at three New Mexico warehouse locations. However, the program failed to meet internal benchmarks and was discontinued after just seven months.
In this comprehensive guide, I’ll leverage my retail and consumer shopping expertise to share:
- A deep-dive on how Costco’s curbside pickup pilot worked and where it fell short
- An analysis of viable order pickup alternatives available to members right now
- Innovative ideas and emerging solutions Costco could consider revisiting contactless pickup
- Tips to maximize your existing Costco order fulfillment experience
If convenient pickup without leaving your car sounds like your ideal way to stock up on bulk essentials, keep reading for insider insights.
Inside Costco’s Curbside Grocery Pickup Pilot
In December 2020, Costco announced plans to test contactless curbside grocery pickup at three New Mexico warehouse locations near Albuquerque, Santa Fe, and Tucson starting in February.
The pilot aimed to provide members a convenient, crowd-free way to grab Costco hauls during COVID while minimizing contact and also saving home delivery fees.
How Costco’s Curbside Pickup Worked
Utilizing the service was straightforward for members:
- Visit Costco.com or open the mobile app to shop available grocery items
- Select the “Same-Day Pickup” option and choose your test location
- Checkout as normal and wait for the “Ready for Pickup” confirmation text
- Drive to the designated curbside spots and text the provided number
- A Costco employee brings out your order directly to your car
Unlike most curbside experiences where customers pop their trunk, a gloved employee placed items inside car doors or loaded directly into your cart. This minimized touchpoints amid COVID.
There was no need to exit your vehicle or tip afterwards either. Dedicated parking spaces made the entire process fast and smooth by design.
Curbside Order Product Availability
While Costco offers nearly 4,000 total grocery and household selections in warehouses, only 1,400 were available for same-day curbside fulfillment during the pilot.
Categories included:
- Fresh produce
- Dairy and eggs
- Frozen items
- Meat and seafood
- Canned goods/pantry staples
- Alcohol
High-demand products like paper towels, sanitizing wipes, baking ingredients, snacks, and cleaners were notably absent from curbside eligibility.
Pilot Timeline and Adoption Overview
February 2021 | Curbside pickup pilot launches at three Costco warehouses in New Mexico |
May 2021 | Just under 2,000 members had utilized the service for first-time orders since launch |
September 2021 | Only around 50 members were placing weekly reorders amid declining interest |
October 2021 | Costco discontinues curbside pickup across all New Mexico test locations after failing to drive adequate adoption levels |
As evidenced above, while initially popular with members seeking COVID-safe grocery solutions, Costco failed to drive consistent, high-frequency use long-term.
Why the Costco Curbside Test Flopped
There were a few core issues that ultimately derailed Costco’s contactless curbside pickup pilot:
1. Limited Product Selection
With just 35% of typical warehouse inventory available curbside and high-demand categories excluded, member satisfaction and reorder rates quickly declined.
Fulfillment issues also resulted when shoppers expecting to easily grab paper goods or baking staples online found them sold out or unavailable.
2. Low Repeat Order Volumes
While curbside pickup saw initial first-time trial, Costco struggled driving members to incorporate the service into their regular shopping habits.
Weekly reorders measured just 50 customers across three test warehouses at peak – far below targets to justify operational costs.
3. Inventory Management Challenges
Keeping store inventory levels in-sync with constantly changing online availability proved extremely difficult.
Occasional mismatches resulted in the need for member substitutions or order cancellations – dragging down the user experience.
With shopper expectations high and margins tight, anything short of flawless execution proved unacceptable.
Key Reasons for Costco Curbside Pilot Failure
Essentially, the core issue came down to convenience and inventory breadth.
Without complete category availability or guaranteed order accuracy, the incremental effort to pickup orders couldn’t outweigh simply shopping in-warehouse for members.
The infrastructure also didn’t adequately exist yet for Costco to manage real-time alignment between warehouse stock levels and online order volumes at necessary precision across hundreds of locations.
Ultimately, the company decided doubling down on improving existing grocery delivery and order pickup through Instacart made the most strategic sense given current limitations.
Continuing to build out complex curbside capabilities in-house was tabled.
Instacart: Costco’s Current Order Delivery & Pickup Solution
When you have a warehouse packed with 4,000 products eagerly eyed by customers stocking up, seamlessly enabling convenient pickup or delivery is no small feat.
As Costco began facing intensifying pressure from members seeking online order fulfillment amid the pandemic, the company leaned heavily into third-party provider Instacart to expandreachable inventory and accelerate rollout speed starting in 2020.
Over 85% of households now have access to same-day Costco delivery via Instacart across the U.S. and Canada as a result.
Let’s explore how it works, what you can order, when to use it, and some super shopper insider tips to maximize convenience and cost-savings.
How Instacart Enables Costco Order Delivery & Pickup
The integration between Costco and Instacart centres around enabling members to shop Costco’s complete online catalog with included real-time visibility into individual warehouse inventory levels.
After filling your cart, choose a delivery window or pickup time. Then a trained personal shopper takes over:
- Shopper receives your order and begins gathering items across Costco’s huge warehouse
- Every product gets hand-picked at peak freshness off Costco‘s shelves
- Cold/frozen items stay properly temperature controlled
- Shoppers communicate real-time updates/subs as needed
- Alcohol orders require age ID/verification at drop-off
- Your same-day order arrives on-time within the delivery window selected
Costco Grocery Pickup Powered by Instacart
When utilizing Costco pickup via Instacart, the process works the same way except you head to your chosen location to collect bags brought straight out to your car just like curbside:
- Indicate you’ve arrived for pickup in the Instacart app
- Provide name/order number to gate attendant
- Collect items directly from the shopper
- No need to enter the warehouse or wait in line
So while not quite as convenient as classic contactless curbside, Instacart order pickup still helps you skip navigating crowded Costco trips.
Costco & Instacart Order Inventory
A major advantage over Costco‘s own limited pickup assortment is the incredible selection unlocked by Instacart.
You can access 100% of typical warehouse inventory categories and specific items. Some examples include:
Alcohol | Bakery desserts | Dairy & eggs |
Produce | Meat & seafood | Deli options |
Kirkland products | Frozen foods | Shelf staples & pantry items |
No frustrating out of stocks on daily essentials your family needs. Shop Costco‘s complete range all in one place instead of making multiple stops.
Tips for Smooth Order Experiences
As a self-proclaimed Costco and Instacart power user, I have a few helpful recommendations:
- Provide detailed specifications – For produce, meats, bakery requests to get perfect fulfillment
- Tip generously – At least 10% for the best shoppers to take your order
- Rate 5 stars – Ensure you get matched with highest rated shoppers going forward
Utilizing best practices tailored to grocery delivery and pickup means more accurate orders delivered by top shoppers dedicated to superb service.
The Future of Costco Contactless Curbside Services
Consumer demand for ultra-convenient pickup and delivery isn’t slowing down anytime soon.
80% of shoppers want even faster, more flexible order fulfillment options today compared to just three years ago.
Retail giants like Walmart and Target continue pushing pickup innovation forward with checkout-free stores, site-to-store lockers, and more to capture growing market share gains.
So in light of shifting consumer expectations and fierce competition, could a Costco curbside 2.0 launch ever make sense down the road?
While near-term plans currently seem unlikely, I wouldn’t fully rule out the possibility in the retailer’s long-term future.
Here are two scenarios where reinvesting in contactless pickup could drive value:
Curbside Micro-Fulfillment Center Testing
As warehouse clubs fight for growth amid the small-box threat, finding ways to excell on convenience and keep members engaged has become tablestakes.
One innovative concept Clubs are exploring involves building micro-fulfillment centers at existing locations dedicated exclusively to digital order fulfillment.
Leveraging state-of-the-art automation technology could solve previous inventory management struggles that derailed Costco’s curbside pilot by keeping warehouse stock and online availability digitally connected.
Small-format site-based ports focused 100% on pickup and delivery allow staff to focus on speed, precision, and accuracy completely separated from crowded in-store operations.
Wegmans, Albertsons, and Ahold Delhaize have begun piloting similar setups realizing the future requires both physical and digital retail innovation in parallel.
Testing a single location curbside-only micro fulfillment center could give Costco valuable insights if they reassess contactless efforts.
Third-Party Partner Supported Curbside Program
Another option that addresses inventory hurdles without major capital investment involves exploring specialty last-mile curbside delivery providers as an extension of the Instacart relationship.
Companies like Point Pickup and Curbside operate popular contactless grocery pickup services leveraging flexible driver networks supported by smart pricing and routing algorithms.
Shifting fulfillment externally allows Costco to maintain focus on world-class warehouse operations while still meeting customer demands for convenience.
Given browsing discovery and impulse purchasing drives over 50% of in-store basket size for warehouse clubs, maintaining that experiential retail atmosphere remains important long-term even amidst digital disruption.
Rather than attempting to completely transform retail DNA, third-party supported curbside pickup could perfectly complement existing member engagement strategies.
Concluding Thoughts
Costco opted to shutdown it’s three-location curbside pickup pilot after seven months to redirect resources on expanding delivery through Instacart instead.
However, rapidly advancing consumer expectations for checkout-free convenience will likely force Costco to reassess contactless efforts long-term.
Curious members should keep an eye out for new curbside concepts potentially testing as the company balances digital innovation with treasured in-warehouse shopping traditions.
In the meantime, Instacart unlocks fulll Costco inventory access from the comfort of home. So skip the weekend crowds and enjoy same-day delivery or order pickup powered by a personal shopping assistant.
Hopefully this retail insider’s guide better informed your perspective on Costco’s current pickup options and what curbside solutions could return in the future!