In the arms race of retail media networks — a market projected to hit $70 billion in U.S. spending this year — Costco has been conspicuously quiet. While Amazon built a $50-billion-plus advertising juggernaut and Walmart turned its marketplace into a media platform, Costco's Velocity network operated mostly in the background, running recommendation carousels and sponsored product placements without much fanfare. That just changed. Mark Williamson, Costco's associate vice president of retail media, unveiled Reserved Display — the first native ad format built on the Velocity stack — with a philosophy that sounds almost radical in an industry obsessed with monetizing eyeballs: "We aren't building a media network to hide margin," Williamson said. "We are building an engine to move merchandise."
How it works
Reserved Display placements will appear across Costco.com's highest-traffic pages — the homepage, search results, and category pages — functioning as what Williamson calls "personalized digital endcaps." The technology partner is Moloco, an ad-tech firm whose deep neural networks are trained on members' actual purchase behavior rather than browsing sessions alone.
That distinction matters. Because Costco is a membership club, it maintains 100% transaction-linked identity across its entire customer base. Every impression in the Reserved Display system matches an individual member to their full omnichannel shopping history — something Amazon and Walmart can approximate but not guarantee. As Conversations on Retail noted, this closed-loop data advantage means Costco can optimize for actual incremental sales rather than last-click attribution.
Beta partners get access in Q2 2026, with broader availability following through Q2 and Q3. Costco plans to expand ad slots, add new formats, and connect into SSP and DSP platforms for programmatic buying — a sign the company is serious about scale, not just experimentation.
The anti-Amazon play
The timing isn't accidental. Amazon's share of U.S. retail media spending dropped from 56% in 2024 to 46% in 2025, as brands diversified across multiple networks. That erosion creates an opening for differentiated platforms — and Costco's pitch is genuinely different.
Where Amazon treats retail media as a high-margin profit center and Walmart has followed a similar playbook, Costco says its ad revenue flows back to merchants for promotions and pricing. The Velocity tech stack is also unusually transparent: Costco has publicly disclosed its full infrastructure, including MetaRouter for data collection, LiveRamp for identity resolution, and Habu-based clean rooms for privacy-compliant audience building.
Why it matters
The numbers suggest Costco is building from a position of strength. Its digitally enabled sales exceeded $27 billion in fiscal 2025, and in Q2 2026 alone, recommendation carousels drove over $470 million in e-commerce sales. Reserved Display is the next step in converting that digital traffic into an advertising asset.
For brands, the value proposition is straightforward: advertise on a platform where every member is known, every purchase is tracked, and the retailer claims to be optimizing for your sales rather than its own ad revenue. Whether that promise holds as the program scales is the real test — but in a retail media landscape increasingly dominated by walled gardens and opaque attribution, Costco is betting that transparency sells.
Sam's Club and BJ's are exploring similar in-store retail media strategies, positioning the entire warehouse club sector as a credible third pillar alongside Amazon and traditional grocery retail media. The club model's inherent membership data advantage may make it the most advertiser-friendly format in the industry — if the clubs can scale their platforms fast enough to capture the budget shift already underway.