Rudy Lai
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AI @ Costco

Membership model, consistent growth
Industry
Last updated
July 3, 2025 at 10:44 AM

Summary

  • Costco has progressively adopted AI technologies since 2019, evolving from experimentation in supply chain and inventory management to sophisticated AI-driven operations including employee scheduling, personalized shopping, and global market expansion by 2025.
  • Key AI implementations include inventory optimization, supplier performance monitoring, demand forecasting, and travel service enhancements, contributing to improved operational efficiency, cost reductions, and enhanced customer experience for their 796 million members.
  • Recent AI integration into retail media networks and backend agent systems has supported Costco's competitive advantage and stock momentum, notably boosting operating margins and positioning Costco as a leader in AI-powered retail innovation by late 2025.

VIBE METER

More AI announcements = more VIBE
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7 AI Use Cases at Costco

Retail Media Targeting
2025
Customer Facing
Traditional
Generative
Agentic
Outcome
Revenue
Using AI-powered tools, Costco's retail media network segments audiences more effectively to optimize advertising and promotions. [1]
Travel Assistance
2025
Customer Facing
Traditional
Generative
Agentic
Outcome
AI integration into travel services helps Costco members search trips faster and with greater convenience, enhancing the value of travel benefits. [1]
Supply Chain Automation
2025
Traditional
Generative
Agentic
Outcome
Costs
Automated AI-driven systems help streamline delivery processes, reducing lead times and costs by improving route planning, shipping schedules, and logistics coordination. [1][2]
Customer Personalization
2024
Customer Facing
Traditional
Generative
Agentic
Outcome
Costco leverages AI to personalize shopping experiences, tailoring product recommendations and improving customer service to create a better shopping experience overall. [1]
Inventory Optimization
2024
Traditional
Generative
Agentic
Outcome
Costs
Costco utilizes AI to monitor supplier performance, delivery times, and order accuracy in real time to optimize what items to restock and maintain ideal inventory levels across warehouses. [1][2]
Demand Forecasting
2024
Traditional
Generative
Agentic
Outcome
Costs
Machine learning models predict demand for bakery products and other goods daily, helping reduce waste and ensure stock availability. [1]
Employee Scheduling
2024
Traditional
Generative
Agentic
Outcome
Costs
AI systems optimize employee schedules by analyzing peak shopping hours, employee availability, and sales forecasts to improve labor efficiency and reduce scheduling conflicts. [1]

Timeline

2025 Q4: no updates

2025 Q3

5 updates

Costco leads a quiet AI revolution employing backend AI agents for retail efficiency, expanding globally, optimizing e-commerce, and enhancing retail media network segmentation while enjoying improved operating margins and upgraded membership perks.

2025 Q2

1 updates

Costco intensifies AI use to streamline logistics and supply chain operations, aiming to boost operational efficiency.

2025 Q1

2 updates

Implementation of AI-powered automated systems to improve supply chain efficiency and expanded travel benefits with AI-enhanced trip searching.

2024 Q4

1 updates

Costco uses AI to personalize the shopping experience, optimize inventory management, and enhance customer service.

2024 Q3

2 updates

AI applied to monitor supplier performance with real-time metrics and improve inventory restocking decisions; machine learning forecasts bakery product demand.

2024 Q2: no updates

2024 Q1

2 updates

Costco begins using AI for employee schedule optimization aligned with sales forecasts and tests systems to prevent non-member store entry.

2023 Q4

1 updates

Conceptual focus on leveraging generative AI and member shopping data to enhance operations and strategic initiatives at Costco.

2023 Q3: no updates

2023 Q2: no updates

2023 Q1: no updates

2022 Q4: no updates

2022 Q3: no updates

2022 Q2: no updates

2022 Q1: no updates

2021 Q4: no updates

2021 Q3: no updates

2021 Q2: no updates

2021 Q1: no updates

2020 Q4: no updates

2020 Q3: no updates

2020 Q2: no updates

2020 Q1: no updates

2019 Q4: no updates

2019 Q3

1 updates

Initial AI and ML discussions in big box retail including Costco, setting stage for future AI integration.