We get it. Amazon (AMZN) is an e-commerce behemoth, tackling every category, from consumer products to entertainment (“Transparent,” anyone?). But despite its apparent monopoly on our shopping dollars, there’s still one major player that can’t be overlooked — Costco (COST).
Memberships at the two companies are not mutually exclusive. Actually, of the 23% who are Costco members, 45% are Amazon Prime members as well, according to a new Morgan Stanley survey. And, of the 33% surveyed who are Prime members, 32% are also Costco members. Of the 14% of the survey respondents who shop at both, only 8% plan to shift their spending away from Costco towards Amazon.
Because Costco’s presence is entirely offline and largely suburban, you may think that the chain wouldn’t be able to lure in the younger customer. However, Morgan Stanley points out that Costco members are far younger than perceived — 49 years old (the average Prime member is 44.5).
“This four-year gap seems insignificant and is counter to the bear case that Costco does not resonate with millennials,” according to Morgan Stanley analysts. After all, millennials love their experiences, and Amazon is severely lacking in free samples and incredibly affordable food court options like chicken bakes and churros. Also, Costco members are actually 7% wealthier than Prime members ($92,850 vs. $86,800 annual income).
Though Amazon is aggressively entering new markets with its grocery delivery service, AmazonFresh, announcing on Wednesday its expansion into Dallas and Chicago, Costco still has a leg up when it comes to fresh foods. 11% of Costco members say they have increased their spending on fresh grocery, well ahead of the 2% of Prime members, according to Morgan Stanley.
Consumers are still carving out dollars to spend at Costco — a magical megastore of sorts where you can pick up anything from a hearing aid to a casket. Costco shouldn’t see Amazon as an existential threat just yet.
Melody Hahm is a writer at Yahoo Finance, covering entrepreneurship, technology and real estate. Follow her on Twitter @melodyhahm.