Costco Trials Scan & Pay Technology for Faster Checkout

Costco, the wholesale giant, has initiated a trial of a new feature that allows customers to scan items in its warehouses and complete their purchases using their phones. This move mirrors a strategy previously implemented by its competitor, which is owned by Walmart. During the company’s fiscal third-quarter earnings call, CEO Ron Vachris mentioned that Costco has been quietly testing this technology, which enables customers to scan items and pay through their phones, thereby bypassing traditional checkout lines and expediting the purchasing process. Vachris highlighted the positive early results and the enthusiastic adoption by members, indicating a successful trial phase.

The technology, referred to as “Scan & Pay,” is offered in partnership with Instacart. Customers can scan the barcodes of items to build a digital shopping cart, pay directly through the app, and then scan a QR code at a designated kiosk before exiting the warehouse. This process is designed to streamline the checkout experience, addressing long-standing customer complaints about the lack of digital services and the absence of scanning technology similar to that offered by Sam’s Club for over a decade.

Costco’s version of the technology is similar to Sam’s Club’s “Scan & Go,” which has been in development for years. Sam’s Club initially launched an early version of this technology in 2013, allowing customers to scan items in the app but requiring payment at self-checkout lanes. Over time, Sam’s Club enhanced this feature, enabling customers to pay for scanned items directly through the app and eventually aiming to replace self-checkout lanes with this technology across the U.S.

Costco’s CEO, Ron Vachris, provided limited details about the specific technology being used, but the company’s website offers a guide explaining the “Scan & Pay” process. This new feature is part of Costco’s broader initiative to integrate several new technology pilots aimed at improving the customer experience. With more than half of Costco members having downloaded the company’s app, the introduction of “Scan & Pay” technology is seen as a growth area for the company, according to chief financial officer Gary Millerchip.

The implementation of this technology is a significant step for Costco, which has historically lagged behind in digital services compared to its competitors. By adopting a similar strategy to Sam’s Club, Costco aims to enhance the efficiency of its checkout process, reduce wait times, and improve overall customer satisfaction. This move underscores Costco’s commitment to leveraging technology to stay competitive in the rapidly evolving retail landscape.