Costco, the third largest retailer in the US with $250bn in global sales in 2024, is rapidly developing a retail media network built on its unique membership model and robust first-party data.
Costco is a membership warehouse club, dedicated to bringing members the best possible prices on quality brand-name merchandise. With more than 900 locations worldwide, it provides a wide selection of merchandise, plus the convenience of specialty departments and exclusive member services, all at a bargain price.
With this captive and data rich audience, Costco has started to embrace what it can do with retail media, specifically instore as that is where the bulk of all its sales still take place.
Unlike many competitors, Costco’s approach to retail media is rooted in its core value proposition: enhancing member experience and loyalty, rather than simply maximising ad revenue. This network is still in its early stages – still beta testing in late 2024 – but is poised to become a formidable player in the retail media landscape, leveraging both instore and digital touchpoints.
Costco’s greatest asset is its 80 million US cardholders, all of whom must use their membership cards for purchases. This creates a closed-loop environment, enabling Costco to link every transaction to a specific household and build detailed shopper profiles. Advertisers can then target audiences such as “Frequent Shoppers”, “Tenured Shoppers” and “Category Shoppers” using behavioural and purchase data to deliver highly relevant campaigns.
Already, Costco is expanding both instore and offsite media capabilities. Instore, advertisers can expect targeted signage, sampling events and digital displays, all informed by member data. Offsite, Costco has begun running campaigns with CPG partners on third-party media channels, achieving two to three times the typical return on ad spend in early tests.
It has also signed a deal with Yahoo DSP, allowing Yahoo’s customers to target Costco’s members across the the open web. Through partnerships like this, Costco’s retail media network extends beyond physical stores to digital environments. Brands can engage Costco members across instore displays, Costco.com and offsite digital channels, creating a seamless advertising experience. The Yahoo partnership also enables integration with Yahoo ConnectID, allowing for future-proof identity solutions and advanced measurement infrastructure.
Advertisers receive robust analytics and closed-loop measurement across this whole omnichannel portfolio of retail media, tracking campaign performance and sales impact within Costco’s audience segments. This transparency is a major draw for brands seeking to connect media spend to actual purchase behaviour.
With its membership driven data – which gives a uniquely rich dataset for ad targeting – Costco has been a late arrival in retail media, however this ‘last to market’ approach is also an advantage. The company is focused on building out infrastructure and capabilities over a multi-year roadmap, prioritizing data foundations and merchandising collaboration. It has also watched and learned from its competitors and, despite not actively pitching to agencies, Costco sees strong inbound interest from suppliers and brands. However, its limited product range compared to mass retailers may constrain the number of advertisers, ensuring campaigns remain highly relevant to members.

Download the Retail MediaX Instore report to learn more about CostCo’s retail media network and the wider instore retail media market and how it is developing