February 22, 2006, 12:00 AM

Costco online sales growth soars past total sales

Costco customers flocked to the retailer’s web site last year as online sales far outpaced growth of the chain`s total sales. Web sales rose 42% to $534 million compared with $376.6 million in 2004.

Mark Brohan

Research Director

Costco Wholesale customers were flocking to the multi-channel retailer’s web site last year as online sales far outpaced growth of the chain`s total sales. In 2005 online sales rose 42% to $534 million compared with $376.6 million in 2004. Costco`s total sales for 2005 hit $51.9 billion, 10% over 2004’s $47 billion. In 2004, online sales grew 66% over 2003. In the last fisal year, the web accounted for 1% of total sales.

Company executives credit ongoing marketing strategies for the increase in 2005 online sales. “We continue to market Costco.com to our member base of over 35 million U.S. cardholders through outbound e-mail, direct mail, our monthly magazine ‘Connection,’ and various in-store programs, including flyers, kiosks and point-of-purchase,” says Ginnie Roeglin, senior vice president of e-commerce and publishing.

Late last year, Costco, No. 27 in the Internet Retailer Top 400 Guide to Retail Web Sites, enhanced its site navigation, implemented a new search engine from Endeca Technologies Inc., and added enlarged and zoom images functionality. The web site features more than 4,000 SKUs and receives about 8.5 million visits and 6 million unique visitors every month. Its conversion rate is 1.31% and its average ticket is $400.

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