Costco’s retail media effort reads less like a typical ad network and more like a member service. By putting membership value ahead of immediate monetization, the company is building an RMN that supports retention, merchant goals, and long-term tradeoffs advertisers should study.
Membership-First Philosophy
Costco frames retail media as a tool to support member acquisition and renewal, not as a standalone revenue engine. That mandate forces a high bar: every program must “prove value” to members or it does not proceed. The result is a cautious, restrained approach to advertising that protects the shopping experience and reinforces the membership proposition rather than eroding it.
Merchant-Centric Collaboration
Rather than housing retail media in a separate profit center, Costco organizes it inside merchandising and merchant teams. That alignment ensures campaigns reflect inventory, pricing, and store economics instead of short-term media margins. Mark Williamson, Costco AVP, Retail Media, has emphasized working with merchants to design opportunities that support category health and member satisfaction.
Foundational Data for Lasting Loyalty
Costco operates with 100% member-identified transaction data and has invested in a unified data platform. That first-party foundation enables precise measurement of how advertising affects renewals and lifetime value. It also supports transparent offsite advertising that links back to membership outcomes rather than just clicks or short-term conversions.
Lessons for the Industry
- Prioritize customer lifetime metrics over immediate ad revenue to protect long-term brand equity.
- Embed retail media within merchandising to align incentives and avoid internal conflict.
- Invest in member-identified data and a single platform to tie media to loyalty and renewals.
- Adopt a “prove value to the customer” filter before scaling programs.
Costco is an example of an anti-network in retail media: measured, merchant-led, and loyalty-focused. For networks chasing short-term sales lifts, the Costco approach offers a strategic alternative that may yield deeper returns over time.
