Costco adds new ways to make money from members

Core Insights - Retailers, including Walmart and Costco, are increasingly monetizing their relationships with customers through advertising and data utilization, often without consumers' awareness [1][2]. Group 1: Walmart's Advertising Strategy - Walmart generates revenue through its Walmart Connect platform, which includes online ads, in-store ads, and targeted advertising based on shopper data [7]. - The revenue model for Walmart's advertising is primarily pay-per-click (CPC) or pay-per-impression (CPM), similar to Amazon's retail media network [7]. - Competitors like Amazon and Target have similar advertising programs, while Costco has been more cautious due to its membership model [2]. Group 2: Costco's Media Sales Initiatives - Costco is expanding its media sales efforts, as highlighted by CFO Gary Millerchip during the fourth-quarter earnings call, indicating a long-term strategy to enhance member experiences [3][6]. - The company is utilizing technology to tailor messaging on its website based on membership type and co-brand credit card status, aiming to engage members more effectively [4]. - Costco is exploring the potential to sell external ads while maintaining a focus on member privacy [5]. Group 3: Alternative Revenue Streams - Costco's approach to alternative revenue extends beyond media sales, indicating a broader strategy to enhance profitability while respecting member privacy [6]. - The company has multiple initiatives underway to diversify its revenue sources [8].