While the five-pack of Clorox (CLX - Get Report) wipes for $20.99 and free food samples continue to work well in attracting Americans into Costco's enormous stores, it's the future of how people are likely to shop that has some analysts concerned about the retailer.
"While we do believe Costco [will] remain strong merchants and consistently deliver a great in-store experience and treasure hunt atmosphere, we believe the retailer should intensify focus on e-commerce," Cowen & Co. analyst Oliver Chen said in a research note on Friday.
While Costco's online sales grew 11% in its most recent quarter, that increase just didn't compare to competitors Walmart (WMT - Get Report) and Target (TGT - Get Report) , which saw e-commerce sales boosts of 63% and 22%, respectively.
For its part, Costco is implementing a number of improvements within e-commerce, such as increasing the number of e-commerce fulfillment centers to 19 from seven and adding new online functions like an order tracking system. But Chen said that as consumers gradually move further and further away from bricks-and-mortar to online shopping, the initiatives just don't cut it.
"In our view, the retailer needs to implement a number of new and exciting features which customers have come to expect at other retailers including [an] improved app and a more seamless shopping experience," Chen said.
Chen suggested Costco follow Walmart's and Target's lead by offering an option to buy online and pickup in store, for example.
Analysts from financial services firm Stifel also said in a new research note that Costco's weaker position in e-commerce against giants like Amazon (AMZN - Get Report) remains a risk for the company.
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Editor's Pick: Originally published May 26.