Amazon Narrows CPG Gap with Costco: What the Shift Means for CX

What happened

Amazon is closing the gap on Costco as a destination for consumer packaged goods (CPG), according to new retail performance data reported by Retail Customer Experience. The findings point to a meaningful shift in where shoppers are choosing to purchase everyday household products, with Amazon's share of CPG spend edging closer to that of the membership warehouse giant.

The development marks a notable inflection point in the ongoing contest between digital-first and physical-format retail. Costco has long held a commanding position in CPG by bundling value, bulk purchasing and a curated assortment behind a membership model that generates strong habitual behaviour. Amazon's advance suggests that its combination of convenience, Subscribe & Save mechanics and expanding private-label range is beginning to replicate — and in some categories potentially surpass — those loyalty-driving dynamics online.

Why it matters

For customer experience and service-design practitioners, this shift is less about market share arithmetic and more about what it reveals in shopper behaviour. Costco's dominance in CPG has historically rested on a carefully engineered experience: treasure-hunt discovery, perceived value through bulk sizing, and the psychological pull of a paid membership that primes members to justify repeat visits. Amazon is now competing on a different but equally powerful set of behavioural levers — frictionless reordering, algorithmic personalisation and subscription defaults that reduce the cognitive effort of replenishment to near zero.

The convergence of these two models signals that the future of CPG retail will be won not simply on price or range, but on which platform most effectively reduces decision fatigue and embeds itself into the customer's routine. Brands that supply both channels face growing pressure to understand how their products are being discovered, evaluated and reordered differently across each environment — and to design their packaging, bundling and digital content accordingly.

The Renascence take

Most commentary on this story will focus on competitive positioning between two retail giants. The more instructive lens, however, is behavioural: what Amazon is really eroding is not Costco's price advantage, but its ritual advantage — the habitual, almost automatic nature of the Costco shop. That is a much harder thing to displace, and the fact that Amazon appears to be doing so points to the compounding power of low-friction defaults.

The deepest form of customer loyalty is not affection — it is automation. Costco built its CPG dominance on a membership ritual that made bulk buying feel like a smart, recurring decision. Amazon is dismantling that not through better prices, but through Subscribe & Save defaults and one-click reordering that make conscious choice almost unnecessary. What most operators miss is that the battle for CPG is really a battle for cognitive real estate: whichever platform requires the least mental effort at the moment of replenishment will win. Customer-obsessed brands should audit where their products sit in each platform's default reorder and recommendation flows — because presence in those flows is now more valuable than any promotional placement.