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Costco Wholesale Ventures into Advertising Business
Costco Wholesale is delving into the world of advertising by leveraging the vast amount of shopping data it collects from its over 70 million members. The retail giant is in talks with an ad-tech firm to transform this data into a powerful advertising tool, aiming to charge advertisers for access to its valuable consumer base.
Beta Tests and Future Plans
Mark Williamson, Costco’s assistant vice president of retail media, disclosed that the company is currently running beta tests using audience data to target users on external websites. These initial trials are paving the way for implementing the strategy on Costco’s own site in the near future.
While Costco has not yet finalized a partnership with an advertising company, Williamson revealed that they are actively considering various offers. This potential move signifies a significant shift for the retailer, which has traditionally operated without a public relations team.
Competitive Landscape
By venturing into the advertising realm, Costco is positioning itself to compete with industry rivals like Target and Walmart, both of which have established retail media partnerships. If a collaboration materializes, Williamson asserts that advertisers will be able to target Costco members based on their past behavior, whether in-store or online.
Strategic Vision
Williamson emphasized that Costco’s foray into retail media is not just about generating revenue but also about enhancing member value and keeping prices low. This initiative could potentially help offset operational costs and ensure that Costco can continue offering popular items like its famous $5 rotisserie chicken and hotdog combo.
Embracing Technology for Future Growth
According to Costco’s CEO, Roland M. Vachris, technology will play a pivotal role in the company’s future endeavors. During a recent earnings call, Vachris highlighted the importance of leveraging technology to enhance member engagement, both in physical stores and online.
Vachris expressed optimism about utilizing data analytics and retail media to drive business growth, citing a significant investment in these areas. With a strong focus on technology, Costco is poised to evolve its operations and stay ahead in an increasingly digital retail landscape.
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