Economic Club of Chicago<\/a> about how AI is\u2014and isn\u2019t\u2014changing Costco\u2019s workforce of 341,000.\u00a0<\/p>\nCostco has used AI in many parts of the business, and has seen an increase in sales in some of its departments, like in the pharmacy sector.<\/p>\n
\u201cAI has been extremely good for our company in an assistive nature,\u201d Vachris said. \u201cWhat we found is, it has worked very well, complementing our employees and the systems that we put in place in the pharmacy, in our gas stations, and in the accounting department that we have. And also in some of our IT. It was writing some code.\u201d<\/p>\n
In Vachris\u2019s eyes, the tech serves to empower Costco employees rather than replace them.<\/p>\n
\u201cEveryone that we put in place has enhanced the business,\u201d Vachris said. \u201cWe’ve not displaced people because now the business is growing at a faster rate. But those employees that were doing those tasks before have now elevated up to more of a forward-thinking role.\u201d<\/p>\n
Some of the decision-making at Costco will never be outsourced to artificial intelligence, Vachris added.<\/p>\n
\u201cI don\u2019t see AI making choices on items for Costco,\u201d he said. \u201cI don\u2019t know that we\u2019ll ever take that out of the hands of a skilled buyer. AI won\u2019t be doing evaluations with our employees. But there is a great place for developing AI systems, and it\u2019s going to make us a better company.\u201d<\/p>\n
Vachris started as a forklift driver at the company in the 1980s and became its CEO in January 2024, now overseeing the retail giant with more than $275 billion in annual revenue. When it comes to his leadership style, he said he abides by the rule of simply being himself.<\/p>\n
\u201cI’ve learned so much from multiple people in the organization. It really comes down to ‘you got to be you,’ right?\u201d Vachris said. \u201cI’m gonna be me with the attributes of all the things that I’ve learned over the years, and the strengths and the responsibility of taking care of our company and continuing to grow it and taking care of our employees. When you try to be somebody else, in my opinion, people see right through that.\u201d<\/p>\n
His paradigm seems to be paying off: As of last year, Costco had 81 million paying members, and Vachris said that the retailer is running a 90% renewal rate. The company has a market capitalization of more than $440 billion, with shares up 17% this year. <\/p>\n
Costco\u2019s culture also apparently works for employees, considering that 55% of them have been with the company for five years or more.\u00a0<\/p>\n
\u201cOur number one competitive advantage is our people,\u201d Vachris said. \u201cIt’s the best competitive advantage we have over anybody else in the industry.\u201d<\/p>\n
While Costco isn\u2019t outright resisting artificial intelligence, it seems like Vachris has other priorities to keep the company at the top of the game\u2014like $1.50 hot dogs . . . sold by human employees, of course.<\/p>\n
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