Costco’s Introducing membership card scanners It’s still rolling out in front of U.S. stores, but the move is already paying huge dividends for the wholesale club.

Morgan Stanley analysts wrote in a note this week: Costco warehouses We’re seeing low double-digit increases in membership numbers after implementing browsers, and he suggested that high conversion rates from previously non-paying customers could lead to a retailer’s “Netflix moment.”

General view of a Costco store in Teterboro, New Jersey, on June 28, 2023. (Kena Betancur/VIEWpress / Getty Images)

The report, led by Simeon Gutman, acknowledged that Costco and Netflix have two very different business models, but suggested that the warehouse club’s new tool for controlling memberships could lead to similar growth in paying customers that the streaming giant saw after cracking down. password sharing.

COSTCO’S FIRST MEMBERSHIP FEE INCREASE IN 7 YEARS IS NOW VALID

Since password sharing was restricted last year, Netflix saw a significant increase on new accounts. The streaming company added 9.3 million records in the first quarter of 2024 alone; This represents a fivefold increase compared to the same quarter in 2023.

“Our base case suggests Costco could gain an additional 4 million members through conversion of free-paying customers in North America,” Morgan Stanley analysts wrote. he wrote.

COSTCO RELEASES GAME-CHANGING NEW FEATURE ON MOBILE APPLICATION

During Costco’s fourth-quarter earnings call last month, CEO Ron Vachris He noted that the company has been using card readers at the front of its stores in Europe for more than two years and has been piloting the system in the U.S. for about six months.

He pointed out several ways scanners have helped Costco improve operational efficiency in stores.

Customers browse food items at a Costco store in Colchester, Vermont, in August. Costco CEO Ron Vachris touted several benefits of the scanners for the company and customers. (Robert Nickelsberg/Getty Images)

“It provides our operators with real-time traffic counts throughout the day so we can adjust the front-end lines we need to open and close lines based on business fluctuations,” Vachris explained.

“We can track our fresh food a little bit better because we know what the traffic counts look like,” he said, “and it also moved the headache of membership verification away from the front-end registrations and to the front door where we can look at people’s membership status.”

COSTCO’S FIRST MEMBERSHIP FEE INCREASE IN 7 YEARS IS NOW VALID

The Costco chief added that the scanners also allow customers to be notified if it’s time to renew their membership before they reach the front end of the store, “and membership card scanners It is installed on front doors to speed up the payment process. “This situation was received very positively by our members.”

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