Costco Enters Retail Media Landscape with Launch of New Network

Costco Launches Own Retail Media Network, Taps into Member Data

In a bid to compete with industry giants like Target and Walmart, Costco has launched its own Retail Media network, under the direction of Executive Vice President of Retail Media Mark Williamson. The network is based on data collected from Costco’s 74.5 million users, utilizing their purchasing habits to boost targeted advertising both on and off its website.

According to eMarketer, the Retail Media network is expected to account for one-fifth of global advertising spending by 2024, reaching an investment of 140,000 million dollars (approximately 130,562 million euros) in 2024. The growth rate of Retail Media has surpassed 20%, making it the fastest-growing advertising investment format.

Costco’s membership program allows it to collect data on its customers, which can be used to target shoppers with relevant ads based on their shopping behavior. The retailer will be an attractive option for advertisers seeking first-party data, as its membership-based model provides a wealth of data points. Costco may also become a testing ground for in-store Retail Media, according to CEO Ron Vachris, who noted on a recent earnings call that "Costco has a significant program now with Retail Media, and we see a lot of upside potential."

Although Costco has entered the Retail Media space later than other retailers, Williamson sees this as an opportunity to learn from its competitors. "It is not incorrect to characterize Costco as lagging behind the rest of the industry in the retail media," Williamson noted. Amazon remains the category leader in US Retail Media advertising spending, with an estimated 77% share.

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This year, Amazon’s retail advertising revenue is expected to reach almost $1.5 billion, with a projected growth of over 42 billion dollars (approximately 39.192 billion euros). Despite facing increased competition, Costco’s entry into the Retail Media space is expected to increase targeted advertising and drive growth in the sector.

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