Costco may have found its 'Netflix moment' with this membership-boosting move
Costco's introduction of membership card scanners at the front of US stores is still rolling out, but the move is already paying off big for the wholesale club.
Costco’s introduction of membership card scanners at the front of US stores is still rolling out, but the move is already paying off big for the wholesale club.
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Morgan Stanley analysts wrote in a note this week that Costco warehouses are seeing as much as low double-digit increases in membership counts after implementing the scanners, and suggested the high conversion rates of previously non-paying customers could lead to the retailer’s “Netflix moment.”
The report, led by Simeon Gutman, acknowledged that Costco and Netflix have two very different business models, but suggested the warehouse club’s new tool for checking memberships could lead to the kind of growth in paying customers that the streaming giant saw after it cracked down on password sharing.
Since limiting password-sharing last year, Netflix has seen a significant surge in new accounts.
In the first quarter of 2024 alone, the streaming company added 9.3 million sign-ups – a five-fold increase compared to the same quarter in 2023.
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