Costco just made shopping faster and easier for members

There's a reason so many people love Costco. The company constantly goes out of its way to offer outstanding service, fresh inventory, and unbeatable prices. 

In fact, I've been a Costco member for 20 years, and there's a reason I've never once considered not renewing. The money I save at Costco more than makes up for the membership fee I pay. And at a time when inflation is up 2.7% annually, according to the most recent Consumer Price Index, that's important. 

But that doesn't mean Costco doesn't have room for improvement. 

Ask any Costco member, and they'll probably tell you that one of the worst aspects of shopping at the store is long lines and challenges navigating the aisles. 

When you're in a hurry, the last thing you need to deal with are bottlenecks in the snack area or throngs of people in the frigid produce section you can't wait to escape. 

There's also the intense disappointment that comes with finding that your favorite Costco product is out of stock. 

After all, Costco sells so many items you can't find anywhere else. So if the one thing you're looking for isn't available, you're out of luck.

The good news is that Costco is taking steps to make shopping faster and easier for members. And if the company continues on that path, there could be even more huge improvements in store.

Prescanning items at Costco is a huge time saver

Anyone who's ever gotten stuck in a long Costco line knows how frustrating it can be. Plus, the more crowded the checkout lanes get, the more likely you are to be rammed from behind by an overloaded shopping cart. 

Take it from someone who's had that happen multiple times – it's far from fun, and I may still have the welts on my back to prove it.

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Thankfully, Costco has taken steps to address the problem by prescanning smaller member carts to move along those long lines.

As CEO Ron Vachris said during the company's most recent earnings call, "Prescanning small to medium-sized baskets is leading to better member experience and improved productivity. The warehouses that have first adopted this prescan technology have shown checkout speed improvements of up to 20%."

Digital enhancement and personalization has improved online shopping at Costco

There's a reason Costco may have, in the past, neglected to invest heavily in its online shopping experience. The company prefers that members shop in person. That way, they're more likely to embrace the store's treasure-hunt nature and make unplanned purchases.

But Costco has started to recognize the importance of building out its e-commerce and mobile experience and making online browsing simpler and more relevant.

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As Vachris said during the past earnings call, "Online, we continue to make enhancements to improve the member experience on our site and app. As an example, this quarter, we launched new personalization capabilities that provide members with more relevant product recommendations based on their past search history."

Simplifying the discovery process online can help members find and buy products faster, allowing digital shopping to complement in-store trips. 

Costco is embracing AI for a very good reason

Costco isn't necessarily known to be a pioneer when it comes to technology. But that seems to be changing. 

Costco has begun integrating artificial intelligence into its backend systems to ensure that products are available when members need them, thereby improving the shopping experience by reducing out-of-stock situations.

As Vachris said, "AI is also being interwoven into our business where we believe it can strengthen our model...An early use case has involved integrating AI into our pharmacy inventory system. This system now compares prescription drug pricing across vendors and autonomously and predictively reorders inventory, improving our in-stocks to more than 98%."

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Vachris said Costco is also in the process of deploying AI tools in the company's gas business. 

While it may be unusual to visit a Costco fuel station and find it out of stock, it's a good thing that the company is taking steps to ensure it doesn't happen during times of heavy demand.

Maurie Backman owns shares of Costco.

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