Costco’s personalized recommendations drive nearly $500 million in digital sales

Costco’s personalized product recommendation carousels have moved from a website feature to a revenue line. On June 3, the retailer said those recommendations contributed just under $500 million in digital sales, after about $470 million in the prior quarter, with conversion running at roughly three times Costco’s usual rate.

That matters inside the warehouse as much as it does online. When Costco steers more members toward certain items before they ever walk through the door, it can change what gets ordered, how fast pallets move, and which departments feel the pressure first. The company is not just polishing the digital storefront. It is shaping demand that eventually lands in receiving, on the sales floor and at the till.

Chief financial officer Gary Millerchip framed digital experience upgrades as a major driver for the second straight quarter, and the company’s March 5 Q2 fiscal 2026 earnings call backed that up with hard numbers. Costco reported net sales of $68.24 billion, up 9.1% from a year earlier, while comparable sales rose 7.4%. Management also pointed to digital momentum as part of the quarter’s performance even as tariff pressure and inflation stayed in the background.

The company’s fiscal 2025 results, announced Sept. 25, show how fast the digital layer has been building. E-commerce sales rose 13.6% in the fourth quarter and 15.6% for the full year, while total net sales reached $269.9 billion. In Costco’s 2025 annual report, e-commerce accounted for about 7% of total net sales, while digitally-enabled sales, sales initiated on a digital device and fulfilled through a warehouse or distribution center, plus Costco Travel, made up about 10%.

That scale helps explain why personalization now matters operationally. Costco operated 914 warehouses as of its fiscal 2025 results announcement, and it runs e-commerce sites in the United States, Canada, the United Kingdom, Mexico, South Korea, Taiwan, Japan and Australia. Retail Dive also reported that Costco’s website and app traffic was up 37% in the quarter it covered, a sign that the digital funnel is getting busier and that more members are arriving with a clearer idea of what they want.

Same-day delivery adds another layer. In the United States, Costco offers it through Instacart, while international delivery runs through partners including Uber Eats and DoorDash. Put together, the numbers show a company whose online tools are no longer separate from warehouse operations. For Costco employees and managers, the real story is not just that personalization sells. It is that personalization is now helping set the pace of the business.