Is Costco Missing Out?

Electrify America added several more stations to the queue for phase one of the 5 phase project as part of the Dieselgate settlement against Volkswagen.   This includes 3 in the State of Washington and all are located at Walmart Supercenters. 

Not only is Walmart playing the very willing host to EA, but also EVGO and The WCEH have also charging stations located at Walmart Supercenters as well.

In Oregon, Fred Meyer leads the way as host to Oregon's extended WCEH.  Besides Walmart, EVGO has partnered with Simon, a company that manages shopping malls around the country for installation of charging stations as well.

Going to EA's  website,  we see an overview of the planned network that will be phase one.  Listed there are the 9 sites that are up and running along with 55 sites that are beyond the siting process and have likely broken ground or at the very least, has a concrete agreement with the host for the station installs.  Its been my experience that construction has started well before the sites make it to the "Coming Soon" list.

Of the 64 sites listed;

Walmart Supercenters; 35

Shopping Malls; 9

Outposts; 9. These are random locations, mostly gas stations, fast food row, a truck stop, a few hotels, etc. I call them outposts because they are essentially oases for  travelers out in the middle of nowhere.

Gas Stations; 4

Not mentioned in the list above are random shopping centers with generally one major host in a strip mall type of setup.  Mostly grocery stores like Food Lion, Safeway, Ralph's and Albertsons.

So looks like everyone is getting into the game but.... Where is Costco?

Costco was one of the first to offer plug's for EV's dating back to the early part of this century.  The Tumwater Costco had nothing but a sign and a 120 volt outlet but in my ZENN, that is all I needed! But the great gesture was not well thought out. The outlet was attached to the building which meant it was prime spot for ICEing.  Nearly every time I went there, I had to wait for someone to move before I could park and charge.   A few times when a time crunch was involved, I would park in the walkway (Easy to do with my super small ZENN) and plug in anyway. I had a 25 ft charging cord with 50 ft extension if needed so only had to be "in the neighborhood." although I never failed to get the charge I needed (in the ZENN, not charging meant a lot of pushing) it was obvious the location was not a place I could rely on.

So now the question becomes is Costco giving away an advantage? Today,  brick and mortar stores are mostly fighting a losing battle against the likes of Amazon and Groupon for survival.  Every day, more and more fail.  The stores that are surviving now are doing so from pinpoint inventory control to reduce costs (Walmart, Target) or from over the top loyalty like Costco. 

Of the 3, Costco is doing the best.  Walmart is not. Walmart (and Target) recently copied a page from the  Amazon playbook  by starting their own delivery service but with more of a "drive thru" twist where you can go to a store (there are millions of them out there) and a Walmart Associate will bring your order out to the car. 

Now, don't get me wrong, none of the 3 are in trouble. In fact, far from it. Unlike other retailers, they have survived and prospered by tightly controlling costs but are now realizing that any advantage over the other 2, no matter how small, can make the difference in their cut throat world. While Target and Walmart are in a virtual lockstep with each other,  Costco is in a unique space increasing memberships despite an increase in the annual fee  that is sure to go up again within the next two years. If you recall; Walmart's answer to Costco; Sam's Club has not come close to seeing the success of the paid membership model. Maybe its because I live in Costco's backyard but most of the Sam's Clubs here are no more.

So the question becomes? Is Costco giving away a competitive advantage by allowing Walmart and others to swoop up the charging stations?  Right now, a mere raising of the hand ensures stations in the lot at a minimal cost to the host due to VW's miscues.

Maybe Costco feels they can overcome the advantage Walmart or Target hosting stations?  Despite near identical numbers between Costco and Target, Costco is in a MUCH better position

2017 Forbes Report

At first glance, it would seem both are in a near dead heat but pay attention to the two bottom categories.  Target has 12½ Billion in debt while Costco actually has a half Billion in cash on hand.  Now we could get into why Costco is doing so well and for me the reasons are obvious. I am pro labor and Costco is one the leaders in employee pay and benefits in the retail sector. They also have one of the lowest CEO to employee pay ratios. Both I support vehemently. 

So does that mean I avoid the other 2? Well, no, not really. Walmart is open 24/7 here and has literally everything. So yeah, I go there once in a while simply because there are very few viable 5 AM options out there.   Costco also has a rather limited selection but generally high quality. Unlike the other 2, they have no clearance or dollar bins although the do have random price cuts which can make for a pretty decent deal. I do tend to "experiment" a bit when something I have never tried before has a price reduction. 

Maybe, part of the Costco allure is the much easier job of spotting bargains.  Both Target and Walmart literally wallpaper the store with sales ads, price cuts, etc. The reality is there is so much to look at, its quite easy to ignore ALL of it.  The pessimistic me generally writes these off as the "embellished" regular sale price. 

Another question is with so many hosts willing to put charging stations on their site, is it really necessary to have Costco in the mix as well? Well, that is one of the easiest answers ever!

Of course Costco is needed! Whether it happens in a few decades or a few years, there will come a time when fast chargers are every 2-3 blocks.  That day is inevitable. I am hoping for the latter but am expecting something in the middle of two time frames above. 

The other thing is being barely 60 miles from Costco's World Headquarters means that only California has more than the 31 Costco locations located here.  (count as of Sept 3, 2017)

Now the reason Walmart is anxious to host charging stations should be quite obvious.  Their drive thru pickup service is effortless, easy and at no extra charge. The reason Walmart has survived has been pinpoint inventory control which can and does frequently backfire. IOW, they have a huge selection but frequently may have only half the sizes available. It doesn't take many of these experiences to turn customers off. 

Recently I tested this Walmart service and I will say it did work exactly as they described.  I first went to the store in Lacey to verify they did not have said product on shelf, then ordered it thru their online service and selected store pickup.  Less than 10 mins later, I received an email specifying a day (5 day wait) to pick up said item.  I was simply to advise them when I arrived at the store which of the designated spaces I would be in.  I did so and less than 5 mins later, an associate delivered my order. VERY convenient.   

Now, Walmart is ONLY providing this service in an attempt to cut into Amazon's business of super convenience.  Now its not home delivery, but its completely free without any minimum purchase requirement and is essentially just as easy as stopping at the drive thru at McDonalds. 

This is completely against their business model of generating foot traffic thru the store. I never left my car. I was parked on the side of the building so somewhat away from the mass hysteria of the front of the store. From entry into the parking lot to exiting was barely 10 minutes.  By doing this, Walmart is killing one its largest profit models AKA impulse buying. 

This makes Walmart's willingness to host charging stations (and sequester potential customers for 20-45 minutes) quite transparent.   I love Costco but can they really afford to ignore one of the fastest growing segments of the population AKA the EV driving public?

Within my own reality (which is very active BTW) I see Costco hosting queueable stations where membership does have privileges with rates based on membership level and perhaps the amount spent at Costco the previous month or quarter... Yeah, NOW WE ARE TALKING!!