Costco Signals New Era of Personalization, Retail Media
Costco Wholesale executives highlighted the retailer’s ongoing digital and retail media evolution during its fourth-quarter fiscal 2025 earnings call on Sept. 24, signaling stronger opportunities for suppliers to engage members through targeted marketing and enhanced omnichannel experiences.
Personalization as a Foundation for Retail Media
E-commerce traffic surged 27% year-over-year, with strong gains across categories such as jewelry, apparel, sporting goods and lawn and garden, according to Gary Millerchip, executive vice president and chief financial officer.
A centerpiece of Costco’s multi-year digital strategy is personalization, which is now directly tied to its retail media ambitions. During Q4, Costco rolled out more relevant membership-specific messaging on the Costco.com homepage:
- Executive members now see content highlighting exclusive benefits.
- Gold Star members receive upgrade prompts.
- Nonmembers are shown information about becoming members.
- Costco Visa cardholders see spend-related promotions, while non-cardholders receive acquisition offers.
“These digital capabilities are also a key enabler for retail media, as they allow us to target specific ads that deliver greater value for both members and suppliers while always honoring the privacy choices of our members,” Millerchip told investors.
Case Study: Kimberley-Clark Digital Campaign
An example of this personalization push is a recent Kimberly-Clark digital campaign using Costco’s targeted tools, Millerchip highlighted.
The partners ran a series of multi-vendor mailer (MVM) promotions and amplified them through targeted digital ads on third-party websites that drove shoppers back to product detail pages. The MVM is Costco’s long-running promotional vehicle — essentially a coupon booklet/circular sent to members (print and digital) that features offers from multiple CPG suppliers.
The campaign delivered a 14-to-1 return on ad spend, a 22% lift in traffic to product pages and a 45% increase in digital sales of promoted items.
Digitally Enabled Sales: A New Metric
In a move aligning with broader retail peers, Costco revealed that it will be changing its e-commerce comparable sales metric and begin reporting digitally enabled comparable sales starting with September results (on Oct. 8).
This metric will include sales initiated online but fulfilled across multiple channels — including same-day delivery partners Instacart, Uber Eats and DoorDash, as well as Costco Travel and Business Center delivery.
For fiscal 2025, Costco’s digitally enabled sales totaled more than $27 billion.
Tech Enhancements Powering Shopper Experience
Costco also unveiled several digital and operational upgrades designed to improve speed, access and security:
- Data augmentation to improve search effectiveness.
- Passwordless sign-in on mobile.
- “Waiting rooms” for high-demand items (such as Pokemon cards) to reduce bot traffic and stabilize site performance.
- Enhanced checkout technology across all U.S. warehouses, allowing employees to pre-scan smaller baskets before members reach the cashier, cutting wait times.
Ron Vachris, president and CEO, said these enhancements reinforce Costco’s focus on “improving the member experience,” both online and in-store.
What It Means for Marketers
For CPG partners, the earnings call underscored Costco’s growing retail media sophistication. With personalization now woven into the site experience, brands will see more opportunity to target members based on behavior, membership tier and credit card status.
Expansion Outlook
Beyond digital, Costco continues to expand its footprint. The retailer opened 27 net new warehouses in fiscal 2025, bringing its global total to 914, and plans to add 35 more in fiscal 2026.
