Costco killed a popular member perk and finally says why

Over the past few years, Costco has quietly invested heavily in its digital business.

Those efforts have paid off, according to CEO Ron Vachris' comments during the warehouse club's fourth-quarter earnings call .

"Digitally enabled sales, which include third-party delivery, exceeded $33 billion and was an increase of more than 20%," he said.

Rather than build every digital capability itself, Costco has increasingly used partnerships to expand what members can do online.

"Over the last few weeks, we further expanded the ways in which our members can engage with us online with the announcement that our Uber Eats partnership is growing from 17 states to the entire U.S., as well as the expansion of our DoorDash partnership to include the U.S. These partnerships will complement the successful long-term partnership that we've had with Instacart in the U.S. and Canada," he added.

In addition to these added deals, however, Costco quietly, and without any comment, shut down its Amazon-style marketplace, Costco Next, in September.

That's a blow, as it allowed members, like me, access to more items at Costco-style prices. It wasn't a site I used a lot, but it was a worthwhile selection of items that enhanced the value of membership.

Now, the company has finally explained that decision and shared what it's doing to replace that offering for members.

Costco Next was an online marketplace that let members access items the warehouse club didn't stock. It's not a new service; it has technically been around since 2017. But Costco didn't promote the offering, and it was something many members may not have been aware of.

For those who did use it, however, the shutdown was abrupt.

On the day it closed in September, members who visited the web page were greeted with a terse note.

"Access to Costco Next storefronts is no longer available. Please refer to the list below for contact information for vendors with active return policies. For eligible returns and warranty inquiries, contact the vendor directly," the company shared.

That was followed by a long list of company names with their contact information.

Costco Next, before its abrupt closure, gave members up to 40% off on select products not offered in the chain's warehouses. The program featured items from a specific list of vendor partners, ranging from home goods and luggage to electronics.