Observed Signal · Jun 3, 2026 · Earnings Report · Source: Retail Dive · Impact: 4/5 · Sentiment: Positive
Costco Personalization Drives $500M Digital Sales
Costco told investors on its Q3 2026 earnings call that personalized product recommendation carousels generated just under $500 million in digital sales, marking a second consecutive quarter of strong contribution from personalization. CFO Gary Millerchip said the carousels produced conversion rates roughly three times Costco’s typical digital conversion. The company reported 37% growth in website and app traffic during the quarter, double-digit digital growth in multiple categories, and membership rising 4.1% year over year to 82.9 million paid members. Costco executives highlighted investments in digital experiences, AI search growth, and targeted retention communications aimed at digitally acquired members.
An earnings update from a major retailer showing large, measurable sales impact from digital personalization signals meaningful ROI for first‑party data, personalization engines and retailer digital investments — significant for retail media, MarTech vendors and advertisers.
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Key Takeaways & Evidence Grounding
- Personalized product recommendation carousels contributed just under $500 million in digital sales in Q3 2026.
- The digital carousels drove conversion rates about three times higher than Costco’s typical conversion rate.
- Traffic to Costco’s website and app increased 37% during Q3 2026.
- Costco’s total paid membership rose 4.1% year over year to 82.9 million in Q3 2026.
- Net sales for the quarter rose 11.6% year over year to $69.2 billion; comparable sales grew 9.8% year over year.
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Costco Digital Sales Hit $33B, Up 20%
Costco reported that digitally-enabled sales, including third-party delivery, surpassed $33 billion in fiscal 2026, growing over 20%. The company expanded partnerships with DoorDash and Uber Eats for nationwide U.S. delivery, complementing its long-standing Instacart relationship. CEO Ron Vachris noted these channels drive incremental sales and attract younger members, with members under 40 growing 60% since Covid and now representing over 25% of the base. Costco's total net sales reached $297.2 billion, up 10% year-over-year, with pharmacy growing 20% due to digital capabilities. Delivery partners require membership verification at checkout, reinforcing the membership model.
Costco Teams Up with Moloco to Boost Ad Relevance
Costco has partnered with retail adtech firm Moloco Commerce Media to improve ad relevancy on its ecommerce site as part of efforts to scale its newly rebranded retail media network, Costco Velocity. Mark Williamson, AVP of retail media at Costco, announced on LinkedIn that the collaboration will start with a beta program in the second quarter. The deal is one of several partnerships Costco is making with adtech vendors to power the infrastructure for Costco Velocity.
Petco loyalty program costs millions in point redemptions
Petco's relaunched loyalty program, Petco Perks, led to a mid-single-digit millions impact on Q2 2026 net sales due to unexpectedly high customer point redemption volumes. CEO Joel Anderson noted the program's success, with redemptions exceeding projections. The company has since implemented guardrails on redemption velocity and will focus on personalization. Despite the impact, Petco reported its second consecutive quarter of same-store sales growth.
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