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Costco’s digital momentum accelerates, with app traffic up 37% and digitally enabled comps jumping 21.5% in Q3
The Apex Times

THE APEX TIMES

Business/The Apex Times/Jun 8, 2:06 PM EDT

Costco’s digital momentum accelerates, with app traffic up 37% and digitally enabled comps jumping 21.5% in Q3

Costco reported that digitally enabled comparable sales rose 21.5% in fiscal Q3 2026, helped by website and app traffic growth of 37% and a personalization push that CFO Gary Millerchip said is boosting conversion rates and digital sales.

By The Apex Times Newsroom3 min readAI-assisted Apex article

Costco’s latest quarter reinforced a central part of its growth strategy: expanding how members shop online without weakening the warehouse membership model. In fiscal Q3 2026, the company said digitally enabled comparable sales rose 21.5%, far above its overall comparable-sales performance, as the store club doubled down on technology designed to make online buying feel closer to in-warehouse shopping.

Costco’s core financial results also stayed strong. Net sales rose 11.6% to $69.15 billion for the quarter, compared with $61.96 billion a year earlier, and net income increased to $2.19 billion, or $4.93 per diluted share. The earnings release also showed digitally enabled comparable sales outpacing the company’s adjusted U.S., Canada, and international comparable-sales figures, pointing to a meaningful contribution from digital channels to overall demand during the quarter.

The company attributed part of that digital outperformance to personalization features rolled out across its app and website. On an earnings call, CFO Gary Millerchip said personalized recommendation “carousels” drove conversion rates about three times Costco’s typical level and contributed just under $500 million in digital sales during the quarter. Retail Dive added that the carousels were also a meaningful contributor in the prior quarter, reporting about $470 million then, citing Millerchip’s comments.

Traffic growth was another key driver. Retail Dive reported that website and app traffic increased 37% during Q3. In management commentary on the call, Costco tied higher digital engagement to improvements meant to keep members returning, including more convenient account and shopping experiences and more targeted communications.

Costco also highlighted early progress in applying generative AI and AI search to ecommerce. While management cautioned that AI-sourced activity still represented low volume, Retail Dive reported that Costco saw triple-digit growth in AI search traffic in the third quarter and that this traffic source carried the highest conversion rate among all website traffic. Millerchip further described AI as potentially significant for sales over time, even though the company did not quantify what that could mean in dollars.

The push for digital growth is not purely about acquisition. Retail Dive reported that Costco’s members who sign up online renew at a slightly lower rate than members who join through physical warehouses. Management said the company responded by deploying targeted digital communication and retention strategies aimed at digitally acquired members, and that these actions more than offset the negative renewal impact from the changing membership mix.

Costco also continues to scale the operational backdrop for online shopping. In its Q3 earnings release, the company said it operates e-commerce sites in multiple markets including the U.S., Canada, the U.K., Mexico, Korea, Taiwan, Japan, Australia, and China, alongside 931 warehouses worldwide. That geographic footprint matters because digital improvements can drive engagement even in markets where warehouse access is still limited or where members prefer particular categories to be ordered online.

Still, some of the most important digital economics remain unclear from the disclosed materials. Costco’s earnings release emphasized the growth rate for digitally enabled comparable sales but did not break out the company’s total sales mix attributable to digital, nor did it provide details on how personalization affects gross margin, incremental fulfillment costs, or the long-term renewal profile of members driven primarily by app and website experiences. It also did not provide a quantified roadmap for when AI search could move from low-volume usage to a more material sales driver. What to watch next is whether digitally enabled comp growth sustains in subsequent quarters, whether AI traffic growth translates into a higher share of ecommerce orders, and how Costco’s digital-first membership mix evolves as retention strategies mature.

Why It Matters

  • If digitally enabled comparable sales remain far above overall comps, Costco’s growth rate could increasingly depend on ecommerce engagement rather than warehouse-only traffic.
  • Personalization and search features that lift conversion can improve the efficiency of Costco’s digital customer acquisition, especially if retention also stabilizes.
  • AI-driven shopping discovery could become a larger portion of member commerce, but the company indicated the current contribution is still early-stage.
  • The renewal-rate gap between digital sign-ups and warehouse sign-ups suggests digital growth could pressure overall renewal metrics unless retention tactics keep pace.

Sources

Key Facts

  • Costco reported digitally enabled comparable sales up 21.5% in fiscal Q3 2026.
  • Website and app traffic increased 37% during the quarter, according to CFO Gary Millerchip’s comments as reported by Retail Dive.
  • Costco said personalized recommendation carousels drove conversion rates about three times typical levels and contributed just under $500 million in digital sales in Q3, according to Millerchip.
  • Costco said AI search traffic grew triple digits in Q3 and that AI-sourced traffic had the highest conversion rate among website traffic sources, while management noted AI volume remains low.
  • In the quarter ended May 10, 2026, Costco net sales rose 11.6% to $69.15 billion and net income increased to $2.19 billion.

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Costco’s digital momentum accelerates, with app traffic up 37% and digitally enabled comps jumping 21.5% in Q3 | The Apex Times