Keith Fitz-Gerald, president of Fitz-Gerald Group, highlighted stocks of Costco, Palantir, and Lockheed Martin ahead of the market open.
Costco's introduction of membership card scanners in front of U.S. stores is still being rolled out, but the move is already a big win for the wholesale club.
Morgan Stanley analysts said in a note this week that Costco warehouses have seen low-double-digit increases in membership since implementing the scanners, and high conversion rates among previously non-paying customers are driving retail sales. He suggested that it could lead to a “Netflix Moment” for merchants. . ”
A panoramic view of a Costco store in Teterboro, New Jersey, on June 28, 2023. (Kenna Betancourt/VIEWpress/Getty Images)
| ticker | safety | last | change | change % |
|---|---|---|---|---|
| Fee | Costco Wholesale Co., Ltd. | 899.17 | +5.68 |
+0.64% |
The report, led by Simeon Gutman, acknowledges that Costco and Netflix have two very different business models, but says a new tool for checking warehouse club membership numbers will help the streaming giant. suggested that this could lead to an increase in paying customers, similar to what Netflix saw after the crackdown. Password sharing.
Costco raises membership fees for the first time in seven years
Netflix has seen a significant increase in new accounts since restricting password sharing last year. In the first quarter of 2024 alone, the streaming company added 9.3 million signups. This is a 5x increase compared to the same quarter in 2023.
Netflix has seen a significant increase in new customer signups since it cracked down on password sharing. (Nikos Pekiaridis/NurPhoto via Getty Images/Getty Images)
| ticker | safety | last | change | change % |
|---|---|---|---|---|
| NFLX | Netflix Co., Ltd. | 749.29 | -14.95 |
-1.96% |
Morgan Stanley analysts said: “Our base case suggests that Costco can gain an additional 4 million members through conversion of free customers in North America.”
Costco introduces innovative new features to mobile app
At Costco's fourth quarter financial results conference last month, CEO Ron Vacris The company said it has been using card readers in store fronts in Europe for more than two years and has been piloting the system in the United States for about six months.
He pointed to several ways the scanners can help improve operational efficiency at Costco stores.
Customers view food at a Costco store in Colchester, Vermont, in August. Costco CEO Ron Vacris touted several benefits of the scanner for the company and its customers. (Robert Nickelsburg/Getty Images/Getty Images)
“This allows operators to see real-time traffic numbers throughout the day, so they can adjust the front-end circuits needed to open and close circuits based on business fluctuations,” Vachris said. explained.
“We can now monitor fresh produce a little better because we can see what the traffic numbers and things like are like,” he said. “We've also taken the hassle of membership verification out of the front-end register and moved it to the front-end register. At the front door, we can check people's membership status.”
Costco raises membership fees for the first time in seven years
The Costco chief added that the scanners can also notify customers whether their membership is due for renewal before they arrive at the store's front end. membership card scanner The system, installed at the front entrance, achieved its goal of speeding up the checkout process. It has been very well received by our members. ”
