The down side of a wealthy, home-owning membership base? They're aging, and it's unclear that Costco can replace them with Generation X or millennials.
Amazon is much more in tune with millennials, The Motley Fool reports. Costco has shopped itself to Baby Boomers, placing its warehouses in higher-income areas. That strategy has worked well, but that's not where the millennials are.
Now, younger consumers are drifting to more urban areas where they don't necessarily need to own a car. They don't spend as much as Baby Boomers, and some would scoff at the idea of dropping hundreds of dollars on a bunch of bulk warehouse goods.
"So far, Costco has been good at thwarting the Amazon threat, but this might not be true when Baby Boomers age," writes Dan Moskowitz at The Motley Fool.