Costco, the E-Commerce CSR Leader?

An annual survey just released by the American Customer Satisfaction Index made some waves in the e-commerce world. Despite jumping relatively late into the online e-commerce circus ring, Costco narrowly edged out Amazon to take the crown as the “most satisfying online retailer.” The warehouse retailer made quite a debut indeed, as this is the first time Costco has ever been included in these rankings.

Retail experts could attribute this to countless factors: Costco’s Kirkland-branded products, from dress shirts to coconut oil, have established themselves with their low cost and high quality; the company has launched what is generally a well-regarded online grocery delivery service; and as anyone who has come across a harried delivery worker can testify, occasionally that Amazon package has endured quite the rough journey.

But there could also be another factor at play: maybe those Costco employees are just treated well and as a result, feel happier.

The debate over Amazon’s treatment of its warehouse and delivery workers has long festered online: some of this conversation has appeared here on TriplePundit. The counter argument, naturally, is that Amazon is creating jobs in areas where finding gainful employment can be a painful slog, from California’s Central Valley to southwestern Ohio.

Several years ago, I wrote an article that described Costco as a corporate social responsibility (CSR) leader in the retail sector. From my point of view, if one wants to start “sustainable,” we should start with people. As I wrote in 2012:

“Employees working on the floor can make a salary that reaches the mid-$40,000 range; not bad for someone who starts working for the company out of high school. And while the vast majority of Costco’s employees are not unionized (most of those are legacy employees from Price Club that the Teamsters represent), over 80 percent have competitively priced health insurance plans. The outcome includes more productive workers, lower turnover and for what it’s worth, relatively high job satisfaction.”

Almost seven years later, the general assessment of the benefits of working at a Costco warehouse have not changed much: competitive healthcare benefits, a 401K plan, paid lunch and rest breaks and perhaps most importantly to employees, growth potential, according to a 2018 Business Insider article.

Apply those same perks to someone driving a delivery truck for Costco, and the deal is relatively sweet as well. According to Glassdoor, average pay working as a Costco driver is in the low $60K range – compare that to the average salary for all truck drivers, which is approximately $43,500. Even for pay promised at $80,000, nowadays this truck driving of any distance involves a job few want to do. In fairness, Costco delivery drivers are not driving the lonely, long-haul routes that make this job physically exhausting and one constantly isolating. Nevertheless, the fact Costco has long has a reputation for low employee turnover speaks volumes.

Meanwhile, treating employees well does not mean Costco’s financial performance is lagging. While its stock price tumbled along with the rest of the market in late 2019, this year it has been on the rebound. Costco wins plaudits time and again for treating both floor workers and shareholders more than decently. If you believe in social sustainability and insist all workers should have the chance to earn a decent wage and be rewarded for hard work, face it: shopping at Costco is a compelling choice for some consumers to make.

Image credit: Tony Webster/Flickr