Costco’s Mark Williamson on how retailers can control their own destiny through retail media

A decade ago, marketers could only have dreamed of the opportunities available today.

That’s thanks to what Mark Williamson, Costco’s assistant VP of retail media, calls an “interconnected highway system” of tools — from data collaboration to ad serving. Retailers like Costco are no longer confined to black-box ecosystems. They can now control their own destiny.

Williamson, who helped launch Costco’s retail media network last summer, recently spoke with The Current’s Editor-In-Chief, Stephanie Paterik, about how Costco’s RMN stands apart — and why off-site activation is a critical piece of the strategy.

How is the business going at Costco and how is your strategy changing?

The business is good. The underlying indicators suggest that members continue to trust Costco as a place to find everyday value.

With all the things going on and all the noise that's out there, whether it's the macroeconomic pressures or social pressures or whatever it may be, the beauty of Costco is that we stay the course.

We have our core principles and our core operating model. Our merchants and operators fight every day to bring the highest quality products at the lowest possible price. That model seems to work in all environments.

Tell me about the retail media side of the business. What are you focused on there right now?

We're focused on very similar things. And so retail media at Costco represents the opportunity to reinforce the value of membership.

A lot of retail media businesses are really positioned as profit centers and as a way to garner ancillary revenue streams.

What we've done is we've really focused on keeping retail media as a reinforcement of what our core mission is. That’s growing the member base and driving top line sales by delivering member value every day.

We really view retail media as a function of enhancing our supplier engagements and partnering with brands and agencies to reach more members with targeted, relevant messaging. [From there,] they can recognize and remember the value that Costco brings.

Can you share an example of how Costco is using data to enhance the customer experience?

Retailers have a lot of data. There's behavioral data, transaction data, there's clickstream data. There's a lot of indicators of what our members might be interested in. And for us, it's really about unlocking the power that's there to drive more relevance.

Shopping at Costco is a treasure hunt type of experience. It's all about the process of discovery.

We’re very well known for people coming in with a shopping list and ending up leaving with much more than they anticipated.

I’m one of those people.

Yeah, they find things that they never knew they always wanted. And what we believe is that if we leverage the data that we have, we can bring that discovery process further upstream.

And so, whether they're searching on our website or browsing the internet or consuming content or whatever it may be, we can help inform perhaps their next shop. Using that data to show them that we know them in a way that underpins the value of discovery and the joy of shopping at Costco.

Retail media doesn’t start and end at the point of purchase. We have to be mindful of how we reach audiences wherever they are consuming content. And so that's really what offsite represents to me.

It's about audience extension. It's about reaching the unreachable. It's about reaching our members whether they're perusing the internet, consuming content, doomscrolling on social, whatever it may be.

They're making decisions, they're discovering things, they're learning, they're being entertained. That's how we engage with them these days.

And so for me, if we're not activating offsite, I think we're limiting our ability to reach our members in a meaningful way.

The retail media space is transforming so rapidly. What element of it do you think has the power to be the most innovative and most impactful?

Everything has changed. I've been doing this for about 15 years, and this is the third retailer that I've worked to build a program at. There’s always been an understanding from brands that activating at the point of purchase makes sense. The data and the engagement that retailers have makes them a meaningful media publishing partner.

But what's changed though is the operating model that is informed by the technology that is available. It's more like we have eyeballs, we have traffic, let's monetize it. Whereas right now I think it can be much more purpose-built. The data collaboration tools that we have, the ad-serving tools that we have and the vast expanse of networks that are open and interconnected give the retailers the ability to be very purposeful. They can architect their ecosystem.

Yes, we have data, but we also have this very special relationship with our members. First and foremost, we can do no harm and we can't violate the trust that they have in us. But we do want to unlock the power of that data to reach them and to drive relevant experiences as much as possible.

Now more than ever, we have an interconnected highway system that allows us to activate on that data in a meaningful way.

Ten years ago, we might have dreamed of a scenario where we would have these kinds of tools, but they just didn't exist. And then you have big monolithic companies with big walled gardens and black-box type ecosystems where they say, “Hey, give us all your data and we can do all the things you want to do.”

You make a choice — is that really the business that we want to be in?

Whereas now I feel like [we have] the ability for a retailer to be in control of their own destiny, to use composable elements of an adtech stack and a martech stack in a very purposeful and deliberate way.

It's very encouraging to me that we can do the things that we want to do as a retailer and as a retail media program without compromising the principles that are most important to us.