Costco says new ID scanners at entrances are good for business

• Costco has installed ID scanners in more than half of its U.S. warehouses and says the system is working.
• CEO Ron Vachris said the devices help everything run more smoothly – for the company and its customers.
• The company also said members largely ignored the recent annual fee increase.

Costco’s ID scanners seem to be a hit.

The devices, which launched in the U.S. earlier this year, are now active in about 350 warehouses across the country – and CEO Ron Vachris said they’re already having an impact on business.

“The response has been very positive,” Vachris said during the company’s fourth-quarter earnings call on Thursday. “Both from the members and the operators.”

Vachris noted that the technology has been a fixture in the company’s European and U.K. warehouses for years and was tested for months in the U.S. before being rolled out on a larger scale.

The managing director, who started at the company as a forklift driver, explained several important benefits that have resulted from the new system.

“It gives our operators real-time traffic numbers throughout the day so we can adjust the front-end lines we need to open and close,” he said. “We can monitor our fresh food a little better because we know what the traffic numbers are and so on.”

He also said it speeds up checkout because shoppers are no longer surprised when they learn their membership fee is due. Instead, expired members will be directed to the service desk for renewal before filling their cart.

“The members are very grateful for this,” said Vachris. “They’re coming forward and they’re not shocked by this process.”

Vachris praised the new process for a slight increase in registrations and renewals.

“As our volume grows, we are looking for anything we can find to use technology to move our members smoothly through the front ends,” he said.

Of course, Costco is still far behind the technological pace set by Sam’s Club, where members can use the mobile app to shop and pay in stores and even leave the store without a physical receipt check.

Elsewhere on the call, CFO Gary Millerchip noted that members had largely ignored news of the recent annual fee increase.

“We’ve been able to fend off inflation on things like the $1.50 price of hot dogs and $4.99 fried chicken, and generally show that we’re lowering prices for members wherever we can,” said he.

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