AI @ Costco
Summary
- Costco has been steadily integrating AI technologies across its operations from 2019 through early 2026, with significant advances in inventory management, employee scheduling, customer personalization, and supply chain efficiency. Key leaders like CEO Ron Vachris have emphasized a 'very Costco way' approach to AI adoption.
- Financially, Costco leveraged AI to optimize operational efficiencies, contributing to increased in-stock levels over 98%, improved pharmacy script growth, and enhanced customer loyalty through exclusive membership perks. The company’s membership framework, especially its executive memberships, remained a strong profit pillar, boosted by AI-driven operational improvements.
- Costco's AI use cases span traditional predictive analytics and more advanced agentic AI applications, focusing on demand forecasting, supplier performance monitoring, and retail media network segmentation. These AI implementations mainly aim to reduce costs and improve the customer experience, while positioning Costco competitively in the evolving retail landscape.
VIBE METER
6 AI Use Cases at Costco
Inventory Forecasting2025
Customer Personalization2025Customer Facing
Retail Media Segmentation2025Customer Facing
Operational Efficiency2025
Supply Monitoring2024
Employee Scheduling2024
Timeline
2026 Q1
AI has improved in-stock levels to over 98%, boosted pharmacy script growth, and demonstrated that Costco’s digital ecosystem powered by AI drives robust growth.
2025 Q4
CEO Ron Vachris discusses embedding AI throughout operations in a tailored approach; focus on membership data and proprietary insights driving AI advantages; beginner guides published to educate customers; AI-enhanced forecasting and replenishment functionalities further advanced.
- Constellation Research: Costco approaching AI in 'very Costco way'
- MSN News: Costco's AI Secret: How Membership and Pristine Data Drive Unbeatable Stock Savings
- Costco Product Support: Understanding AI: A Beginner's Guide to Artificial Intelligence
- DigitalDefynd: 5 Ways Costco is using AI [Case Studies] [2025]
2025 Q3
Expansion of AI use cases across demand forecasting, retail media segmentation, operational efficiency, and exclusive membership perks; CEO Ron Vachris advocates cautious, integrated AI approach.
- DigitalCommerce360: Ecommerce Trends: How Costco is using AI
- DigitalCommerce360: Costco turns to GrowthLoop to build retail media network audience
- CommerceSystems: Costco's Quiet AI Revolution: How the Warehouse Giant Is Outmaneuvering Retail Rivals
- The Motley Fool: Costco Just Made a Big Change to Its Perks, and It Affects 79.6 Million Members
2025 Q2
Increased focus on AI-driven operational efficiency in logistics and supply chain gains attention ahead of Q3 earnings.
2025 Q1
Rollout of AI for travel benefits with Travelport+, plus implementation of automated systems to streamline delivery and reduce lead times and costs in supply chain.
2024 Q4
Costco uses AI to personalize shopping experiences, optimize inventory, and improve customer service ahead of growing competitive pressures.
2024 Q3
Implementation of AI for bakery product demand forecasting since 2018; monitoring supplier performance metrics, and discussions of long-term growth potential with AI integration.
2024 Q2: no updates
2024 Q1
Testing of AI systems to prevent nonmembers entering stores and optimization of employee scheduling using AI based on shopping patterns and sales forecasts.
2023 Q4
Highlighting potential for Costco to leverage generative AI to exploit its extensive member shopping data for operational improvements.
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
Early discussions on machine learning adoption in big-box retail, including Costco, Walmart, and Target.