Costco is growing its same-day delivery network as the retailer looks to boost e-commerce sales and strengthen its position against major competitors like Walmart and Target.
This week Costco announced new partnerships with DoorDash and Uber to allow online orders placed with the retailer to be picked up at stores across the U.S. and delivered directly to customers. The partnerships provide Costco with additional access to ultra-fast delivery services powered by gig drivers who use the platforms to pick up available assignments.
DoorDash is known for delivering restaurant meals, but its Costco members can shop from its marketplace for groceries, dry goods, household essentials and a wider selection of other products. With the DoorDash app, customers can shop and get fast delivery from their local Costco warehouse.
The US rollout builds on an existing relationship between DoorDash and Costco in Australia, New Zealand, Sweden, Iceland and Puerto Rico.
With the addition of Costco, DoorDash now serves eight of the top 10 food retailers in North America.
Uber is also deepening its relationship with Costco quite a bit. The company announced Wednesday that Costco products can now be delivered through Uber Eats in 47 U.S. states, compared with 17 states previously. Today, there are almost 600 Costco locations on the Uber Eats app, and customers can opt for on-demand or scheduled delivery.
Costco is also available through Uber Eats in Canada, Mexico, Japan, Taiwan, France and Spain outside the United States.
“Uber Eats and DoorDash rolling out nationwide with Costco is simply good business. Costco isn’t paying to move trucks or to pay drivers to move toilet paper across town. They are offloading all the work and the hassle to delivery platforms. Meanwhile, Costco leaves its primary revenue source intact — you still need to have a membership to make an order,” said Dominick Miserandino, CEO of RTMNexus.com, a community where retail executives exchange best practices on industry issues, in an email exchange.
“For years, Instacart was their only real game in town. Costco brings in Uber and DoorDash—forcing all three to compete on fees and speed. “It keeps members happy, drives incremental sales and Costco doesn’t have to spend a dime running a delivery network,” he added.
Costco’s move comes after DoorDash’s attempts to expand beyond food and grocery delivery.
Earlier this month, DoorDash started delivering on-demand deliveries of Skims from 17 stores in 11 states and Washington, D.C. The company said another nine Skims locations are also expected to be added to the platform soon. Skims sells underwear, loungewear and everyday clothes. DoorDash says customers can expect to receive their delivery in less than an hour on average.
Gap and Gap Factory have also joined the DoorDash marketplace.
DoorDash entered the retail delivery space in 2022 and has only grown since. The platform already has tens of thousands of stores selling all sorts of merchandise.
DoorDash also partnered with Shopify this summer to enable independent merchants with storefronts to list their product catalogs on the DoorDash marketplace and provide ultra-fast delivery to customers.
The foray of food and grocery delivery platforms into broader retail fulfillment indicates a fast-changing parcel delivery landscape. As e-commerce grows and shippers look for cheaper options than traditional carriers like FedEx, UPS and the U.S. Postal Service, independent and regional couriers are increasingly aiming to build national networks.
U.S. Census Bureau data show online sales now make up 16.5% of total retail sales, and the segment is growing at about 10% a year.
Alternative carriers are also taking a larger share of the parcel market. These carriers now account for about 8.5% of parcel freight compared with 2.6% of parcel volume handled by the sector in 2021, according to estimates by the Colography Group.
