Costco

Objective

Close the digital gap of a retailer whose e-commerce accounts for a small share of revenue, by making the site and the app more relevant to each member: more items in the online basket, more visits, and a stronger member relationship at a time when memberships taken online renew slightly less well than those taken in the warehouse.

The deployment

Costco began personalizing its site and app in the first quarter of its fiscal 2026 (September to November 2025). CEO Ron Vachris then presented new capabilities that offer members more relevant product recommendations based on their search history. The most visible format is the personalized product recommendation carousel, placed on costco.com and in the app. CFO Gary Millerchip reports its results quarter after quarter on the earnings calls. In the second quarter (call of March 5, 2026), the carousels generate more than $470 million in e-commerce sales. In the third quarter (call of May 28, 2026), they convert three times better than the site's usual conversion rate; Retail Dive reports that Millerchip puts their contribution at just under $500 million in digital sales, while the Motley Fool transcript of that passage carries an obvious amount error. In the fourth quarter (call of September 24, 2026), Costco widens the scope to product placements and emails: sales from personalization initiatives show triple-digit growth and 10% of costco.com orders contain a personalized item. Costco discloses neither the model, nor the vendor, nor the method used to measure these attributed sales, and does not itself call the carousels AI on its calls; it is the retail press (Retail Customer Experience) that describes them as AI-powered. Not to be confused with a result of this system: traffic from external AI search engines, which Costco says is growing at triple digits on the same call, comes from third-party assistants and not from Costco's personalization.

Results Proof A

The figures are stated by Costco's CFO in his prepared remarks on three consecutive earnings calls (Q2, Q3 and Q4 of fiscal 2026), cited here through the transcripts published by The Motley Fool, and picked up by Retail Dive and Digital Commerce 360. Earnings communication, several consistent sources; the AI label for the engine comes from the trade press, not from Costco.

The internal detail is not public. Here is a proven approach that leads to the same result, to adapt to your stack.

1. 1
   Signal collection Platform

   The site and the app record the member's searches and purchases, tied to their membership number.

2. 2
   Recommendation computation AI

   The engine selects the products to push in the carousels based on this history.

3. 3
   Display Platform and e-commerce teams

   The personalized carousels appear on costco.com and in the app; in Q4, the same logic feeds product placements and emails.

4. 4
   Attribution and quarterly review Finance and digital team

   Costco tracks sales made through the carousels, their conversion against the site's usual rate and the share of orders containing a personalized item, then reports them to investors.