Costco Wholesale is strengthening its competitive position in the home goods and appliance market by controlling one of retail’s most challenging operations: the delivery and installation of large, bulky products.

The strategy stems from Costco’s 2020 acquisition of Innovel Solutions, a nationwide logistics company specializing in final-mile delivery, installation, and white-glove service for appliances, furniture, hot tubs, and other oversized merchandise. The $1 billion acquisition has allowed Costco to oversee the entire delivery experience rather than relying primarily on outside contractors.

Direct Control Over Last-Mile Delivery

Innovel Solutions, formerly a subsidiary of Sears owner Transform Holdco, had decades of experience providing delivery and installation services throughout the United States and Puerto Rico. As Sears’ retail footprint declined, Costco acquired the business to expand its own logistics capabilities.

The acquisition gave Costco a delivery network covering nearly 90% of the United States and Puerto Rico, allowing the retailer to shorten delivery times while improving service quality for members purchasing large household items.

Costco Chief Executive Officer Ron Vachris said the investment has proven successful since its completion.

Speaking during the company’s third-quarter earnings call, Vachris said Costco viewed the acquisition as an opportunity to improve delivery times for large merchandise and described the initiative as highly productive for the company.

Differentiating From Home Improvement Rivals

While Costco operates its own large-item delivery network, many competing retailers—including Lowe’s and Home Depot—continue to depend on combinations of company-operated logistics and third-party delivery providers for appliances and other oversized products.

Best Buy similarly uses a mix of internal Geek Squad installation teams and external logistics partners for appliance deliveries.

Industry analysts say the difference is significant because customers typically associate the delivery experience with the retailer itself, regardless of which company actually completes the shipment.

By directly managing transportation, installation, scheduling, and customer service, Costco can respond more quickly to delivery issues while maintaining greater consistency throughout the purchasing process.

Customer Experience Becomes a Competitive Advantage

Retail experts argue that last-mile delivery has become one of the most important drivers of customer satisfaction, particularly for expensive products that require scheduling, installation, or specialized handling.

RTM Nexus Chief Executive Officer Dominick Miserandino said retailers assume considerable reputational risk when they outsource deliveries to third-party logistics providers.

According to Miserandino, customers hold retailers—not contractors—responsible when deliveries are delayed, damaged, or improperly completed. Maintaining ownership of the delivery process helps Costco protect the trust that supports its membership-based business model.

David Naumann, who leads marketing strategy at Verizon and commented through RetailWire, said controlling delivery and installation gives Costco greater oversight of the entire customer journey and improves overall service quality.

Strategic Benefits Beyond Logistics

Owning its logistics network provides Costco with advantages beyond customer satisfaction. Internal control allows the company to better coordinate inventory, delivery scheduling, installation services, and post-sale support while reducing dependence on external transportation providers.

The strategy also positions Costco to compete more effectively in categories such as appliances, furniture, outdoor products, and other high-value merchandise where delivery quality can influence repeat purchases and member loyalty.

As consumers increasingly expect reliable delivery windows and professional installation services, retailers that directly manage these operations may gain an advantage in attracting and retaining customers.

Closing Insights

Costco’s decision to bring large-item delivery in-house reflects a broader shift in retail toward greater control over the customer experience. Rather than treating logistics as a back-end function, the company has integrated delivery into its overall value proposition, reinforcing the trust that underpins its membership model. As competition intensifies across home improvement and durable goods retailing, operational execution and service quality may become increasingly important differentiators alongside pricing and product selection.