Costco working on an advertising network to sell shopper data, report says
Costco is the perfect place to shop whenever you need a 3-pound bag of pretzels or, perhaps more famously, those $1.50 hot dog combos. But now those purchases will help the retailer target you with ads, according to a report from Thursday.
Costco’s New Advertising Strategy
Costco plans to leverage customers’ purchase history in the retail media space, selling ads to brands that will hopefully entice you to buy more of the things you love. The Costco membership program is expected to make tracking purchases even easier, ensuring that ads for diapers, for example, reach parents with young children.
“We will not only help you reach a Costco member, but we will help you reach the right members in the right context based on past behavior,” said Mark Williamson, Associate Vice President of Retail Media at Costco.
Late Entry into Retail Media Sales
Costco, the third-largest retailer in the United States, is actually behind the curve when it comes to selling data-driven ads. However, with 130 million members worldwide, Costco is recognizing the changing consumer behavior and aims to evolve along with the market and its members.
Williamson acknowledges the drastic shift in customer behavior and the need to adapt quickly. He is excited about the progress in ad tracking over the last decade, allowing retailers and advertisers to deepen their reach and connect with people in a more granular way.
Target’s retail media sales have brought $1.5 billion in “value” to the company, showing the potential for generating revenue by leveraging customer data to sell more products.
