While over 80 retail media networks compete for advertiser attention in the US alone, Costco has been suspiciously absent from the hype. No splashy announcements, no media kits circulating at industry conferences, no vendor partnerships trumpeted in press releases. Mark Williamson, assistant vice-president of retail media at Costco, freely admits the company is a “last mover” in this space.
Williamson doesn’t do traditional press interviews – just the occasional podcast — making even basic information about Costco’s retail media plans hard to come by. In an industry where networks compete for attention with constant announcements, the mystery is part of the strategy.
After stints building retail media at Sam’s Club and Ahold Delhaize, plus a year on the technology vendor side at Citrus Ad (now Epsilon), Williamson joined Costco two years ago with a clear mandate: build a retail media business that serves membership value, not margin extraction.
This approach counters the common approach to retail media. Williamson said curiosity about Costco’s plans was so intense during his years working at competitors that he eventually had to join just to find out what they were building.
At most retailers, the pitch is straightforward: retail media generates high-margin revenue that can offset e-commerce losses or fund price investments. The business case writes itself.
Costco flips that logic. “We don’t use the word monetization,” Williamson said on the CPG Guys podcast in June this year. “We work very hard to make sure we maintain our purpose.”
All efforts point to the company’s north star: sign up new members, and keep existing members renewing. If retail media doesn’t actively reinforce membership value, it doesn’t ship. As I wrote earlier this year, this focus creates scarcity that paradoxically makes Costco’s offerings more valuable.
Costco will walk away from what Williamson calls “free money” to protect member trust. Wiliamson shares an example of when Costco first tested offsite advertising with co-branded units. The team braced for member backlash. “We’re very sensitive to how our members react,” Williamson explained in a separate interview on Flywheel’s Commerce Collective podcast in October. They waited to see if complaints flooded the CEO’s inbox or the call center. The test passed, but the caution reflects something fundamental: Costco charges people to shop there, creating an obligation that shapes every decision.
Many retail media networks talk about “do no harm” to shoppers. Costco’s bar is higher: prove you’re adding value to membership, or don’t do it.
The philosophy creates built-in scarcity. While competitors rush to launch non-endemic advertising or experimental formats, Costco moves deliberately. In a fragmented landscape where brands manage relationships with five to seven retail media platforms on average, Costco’s restraint makes its inventory more valuable, not less.
Walk into most retailers today and you’ll find retail media operating as a separate fiefdom — different P&L, different leadership, often reporting through a chief revenue officer rather than merchandising. The separation creates organizational efficiency but fractures strategic alignment.
Costco takes the opposite approach. “We will always be retailers to our core,” Williamson said on the CPG Guys podcast. “The merchants are still the center of our universe — regardless of the source of funding.”
This is a core philosophical question within retailers today: who owns the supplier relationship when ad dollars are involved? As my earlier profile with Molly Hjelm of Ace Hardware’s RedVest Media shared, incompanies where retail media teams control the “ask,” merchant teams can feel sidelined from revenue conversations they historically owned.
Williamson framed it bluntly in the interview: “Is the merchant the face of the ask, or is the retail media team the face of the ask?”
At Costco, merchants rule the roost. To bridge the gap between traditional merchandising negotiations and agency-driven media opportunities, the company created a nine-person Growth Management Team. Every member came from merchandising backgrounds; most started their Costco careers in the warehouse. They’re accountable to VPs of merchandising, not to a standalone media P&L.
Their job: translate retail media opportunities into merchant language and ensure every campaign ladders up to core business objectives. When an agency wants to activate, the Growth Team becomes what Williamson calls “the Costco Sherpa” — removing friction while maintaining merchant primacy.
The structure forces accountability. When reporting results to the chief merchant, Williamson can’t simply cite media margin. Instead, he must demonstrate how media investments translated into actual sales growth for Costco. “If it’s not $3bn, $4bn, $5bn of returns, we could have spent that money differently,” he explained.
To reinforce this alignment, retail media revenue at Costco gets immediately allocated back to merchandising departments. Merchants use those funds for deeper promotions, longer promotional windows, or everyday price investments. Williamson describes this as “clearing our P&L” frequently – retail media doesn’t hoard margin or operate as a profit center detached from core retail goals.
Other retail media networks use advertising revenue to pad out net margins. Costco ostensibly uses it to make its membership better value.
Costco’s restraint would be annoying if they couldn’t back it up. The data foundations are anything but casual.
Every Costco transaction is member-identified. Not 80%, not 95%, but 100%. That deterministic foundation spans an unusually broad mix of categories: food, consumer electronics, tires, gas, travel, health and beauty, and apparel. The cross-category breadth paints a richer picture of member behavior than grocers, capturing primarily food purchases.
Williamson contrasted this with his experience at a previous grocery retailer where he pulled his own customer profile, as he recounted on the Commerce Collective podcast. The data classified him as vegan and low-sugar — neither of which were true. His purchases during short promotional windows had skewed the model, a perfect example of how narrow data slices can create false precision.
At Costco, the investment dynamics work differently. Members aren’t buying single units on promotion — they’re buying bulk quantities that represent real commitment. “You’re not buying a house on a 30-year mortgage, but you’re making an investment in a lot of product,” Williamson noted. That creates stickiness and loyalty that runs deeper than typical retailer-shopper relationships.
Over the past two years, Costco has invested heavily in what Williamson calls “boring, unsexy foundational work” to unlock this data. They’ve built a unified data platform in a private Google Cloud instance. They’re stitching together more than 15 unique identifiers that previously didn’t talk to each other, creating massive signal loss across their digital ecosystem. They’ve implemented universal consent and preference management to satisfy internal privacy requirements that Williamson describes as “over-compliant.”
The offsite offering launched roughly a year ago demonstrates the payoff. Costco builds custom audiences from first-party data, onboards them through LiveRamp, and pushes to multiple DSPs, including Trade Desk, Epsilon, Stack Adapt, and Yahoo. Advertisers can activate on their preferred DSP – some run the same audience across multiple platforms simultaneously to test performance differences.
On the back end, Costco ingests exposure files, brings them into a clean room, and marries ad exposure with transaction data spanning online and warehouse sales. The data science team provides custom campaign analytics including new-to-item, new-to-brand, and new-to-category metrics. They support holdout audiences for lift testing.
It’s a managed service today, which is “fairly manual,” Williamson admitted on the CPG Guys podcast. But the roadmap includes launching a Habu-based clean room strategy where select partners get self-service access to audience planning, creation, and performance measurement.
For brands exhausted by black-box attribution and retailers grading their own homework, Costco’s focus on transparency matters. And for the 200-plus retail media networks struggling to differentiate beyond audience size and pricing, watching Costco build methodically rather than quickly offers a valuable lesson.
Costco’s approach raises three questions for competitors:
The cool-kid routine only works if you can deliver. Costco is demonstrating that the retailer that appears least interested in retail media might be building the version of it that actually works – for members, for merchants, and ultimately for brands.
The rest of the industry continues to gawk from afar. Perhaps the best way to promote a retail media network, is to refuse to promote it at all.
