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Costco testing pick-up lockers at 10 locations

Costco Wholesale Corp. is testing lockers that allow customers to pick up purchases made online — a move similar to a service that Inc. offers.

The Issaquah, Wash.-based retailer is piloting the lockers at 10 locations, Executive Vice President and CFO Richard Galanti told analysts during a call to discuss fiscal first-quarter results Dec. 13.

The lockers allow customers to pick up purchases at a Costco location without having to worry about having them stolen from their front steps, Galanti added. Costco is piloting the service for a narrow selection of small, high-value goods, such as luxury handbags and electronics, that customers have hesitated to have shipped to their houses in the past, he said.

The pilot is in its early stages, Galanti said, adding that the company does not have plans to expand it to fresh foods or larger items.

"They won't fit a sixty-inch television," Galanti said of the lockers.

Rival retailer Amazon has a network of about 2,800 lockers around the U.S. that allow customers to pick up orders of non-perishable products at locations ranging from convenience stores to its own Whole Foods Market Inc. supermarkets.

The lockers are the latest fulfillment option for online orders that Costco has deployed. In October 2017, the company introduced two grocery delivery options — a same-day service for fresh food through startup Instacart as well as two-day shipping for dry grocery items through United Parcel Service Inc.

For durable non-food items, Costco has been expanding the number of goods that customers can buy online and pick up at a Costco store.

The membership-based retailer has also toyed with implementing other e-commerce options similar to services Amazon offers, such as an auto-replenishment system for packaged goods that customers repurchase regularly.