- Costco is testing a feature that would allow customers to scan items in its warehouses and pay for them on their phones, following the lead of Walmart-owned rival Sam’s Club. CEO Ron Vachris offered few details on the technology, but a guide on Costco’s website said customers will receive a QR code after paying that they scan at a kiosk before exiting.
Costco is turning to technology to get its customers out the door faster, a feature pioneered by rival Sam’s Club.
On the company’s fiscal third-quarter earnings call, CEO Ron Vachris said the company has been quietly testing technology that would allow customers to use their phones to scan items and pay, bypassing checkout lines and improving the speed at which customers can complete their purchases.
“We’ve also engaged in some ‘Scan & Go done by Costco’ kind of tests that we’re doing out there that have been extremely successful of moving people through the lines and expediting the transactions,” Vachris said on the earnings call. “We’ve seen some very, very early results that have been very positive and great adoption from our members—seeing that as well.”
The name Scan & Go is trademarked by Walmart-owned rival Sam’s Club, which has been developing this type of checkout technology for years. An early version of the tech, which launched in 2013, allowed customers to scan their items in the app but required them to pay in the self-checkout lane. Later, Sam’s Club allowed customers to pay for scanned items in the app, and is now looking to replace self-checkout lanes across the U.S. with the tech.
Costco CEO Vachris offered few details about its version of the technology, but a guide on the Costco website explains its Scan & Pay technology, offered in partnership with Instacart, is similar to that of Sam’s Club. By scanning items’ barcodes, customers build up a digital shopping cart which they can then pay for directly in the app and receive a QR code to scan at a Scan & Pay kiosk before exiting.
Costco did not immediately respond to Fortune’s request for comment.
Customers have long complained about the warehouse club’s lackluster digital services and the fact it doesn’t offer the scanning technology Sam’s Club has developed for more than a decade. Now Costco is apparently embracing the idea with “several new technology pilots,” Vachris said.
More than half of Costco members have downloaded the company’s app, and chief financial officer Gary Millerchip sees the company’s foray into Scan & Pay tech as a growth area for the company.
“We still think there’s plenty of opportunity to keep driving higher penetration of digital engagement with our members, and we think it’s got a runway to continue to grow in the future,” Millerchip said on the earnings call.