Costco Builds On Offsite Retail Media Momentum
Building on its first offsite retail media campaign with a CPG brand partner last year, Costco has entered into a number of similar, additional campaigns with roughly 10 different partners. They're currently live with many more in the pipeline.
"We do believe that the new sort of retail media theme, which is really going after the marketing dollars that the [CPG brands] are spending, is a significant growth opportunity for us," Gary Millerchip, Costco executive vice president and chief financial officer, told investors during the company's first-quarter earnings call March 6. "We are, though, in the very early stages of that."
The warehouse giant, Millerchip said, needs to continue to build out its infrastructure and capabilities to not only deliver on a retail media platform for its CPG brand suppliers, but deploy more targeted and relevant messaging to its members.
"Delivering ... the right offer, the right communication, through the right channel to the right member at the right time," Millerchip said. "This is really the capability that we're building for ourselves today and it will take some time to do that. It's likely to be a multiyear roadmap as we build those capabilities."
Last year, Costco completed its first targeted media campaign through third-party media channels with one of its largest CPG brand partners. The campaign achieved two to three times the return on ad spend typically expected, according to the retailer.
