Latest / GrocerTalk / Costco’s Mark Williamson on Retail Media Membership and the Rise of AI Shopping Agents | Groceryshop 2026

Transcript

Costco’s Mark Williamson on Retail Media Membership and the Rise of AI Shopping Agents | Groceryshop 2026 · GrocerTalk

• 0:00
  Hello everyone.
• 0:00
  This is Omnitalk Retail.
• 0:01
  I'm Chris Walton and we are coming to you live from Las Vegas at Grocery Shop 2026 from the Fusion Podcast studio, which is in booth 91 3.
• 0:11
  Come on by, Say hello.
• 0:13
  And joining me now is Mark Williamson.
• 0:15
  Mark, he's been with us before.
• 0:17
  Many of you will remember him.
• 0:18
  It's always a pleasure to welcome him to the program.
• 0:21
  He is the AVP of retail media at Costco.
• 0:24
  Mark, it's great to see you again.
• 0:25
  Good to see you as well.
• 0:26
  Yeah.
• 0:26
  So how you been finding the show so far?
• 0:29
  I'm still getting acclimated.
• 0:30
  It's just first time on the floor in booth 913.
• 0:34
  It's the only booth I've seen so far.
• 0:35
  Nicely done.
• 0:36
  Nicely done.
• 0:37
  Nicely done.
• 0:38
  Well, it's a good booth to stop by, Mark.
• 0:40
  All right, so I mentioned at the outset you've been on the show.
• 0:42
  I think we were talking before.
• 0:43
  This is your third time.
• 0:44
  That's right.
• 0:45
  We last had you on in January, I think it was at Nrref, if I'm not mistaken.
• 0:50
  You told us that you had rebuilt your ad server, you'd built a clean room, you'd expanded your off site measurement capabilities and your search integrations.
• 0:58
  Just those things.
• 0:59
  Just those four things.
• 1:00
  How's it all going?
• 1:01
  Number one.
• 1:02
  And what has been the hardest of them to get right?
• 1:06
  Well, they're all still in some form or fashion or some iteration of some form or fashion.
• 1:12
  Because true products.
• 1:13
  Right.
• 1:13
  Technology never sleeps.
• 1:16
  Nope.
• 1:17
  And so I don't know if it's what we're finding out or if we're just validating the truth of that, but these projects are rolling targets.
• 1:25
  And so a lot of work has been accomplished.
• 1:27
  And I think what we've been talking about for the last couple of years is putting the foundational elements in place.
• 1:31
  And this last year has really been exciting for us because we've been putting activation layers or product layers on top of the infrastructure that's been built.
• 1:39
  And so I would say it continues to be a labor of love.
• 1:42
  There's puts and takes throughout the whole project.
• 1:44
  But we are, we're committed and I think validating the wisdom of the modular stack that we've assembled because not everything goes according to plan, not everything works the way that we designed it to, or there's new opportunities that
• 1:57
  can be pursued by plugging in, you know, plugging two existing partners together or plugging in another partner that was unplanned.
• 2:04
  Oh, go ahead.
• 2:05
  Sorry.
• 2:05
  So, like that, that's really been the, the journey for us this year is getting the first iterations out and then continuing to innovate.
• 2:11
  So that's interesting.
• 2:12
  So, like, I never thought about that.
• 2:13
  So is.
• 2:14
  Is like keeping a modular mindset, actually something that you have to keep top of mind as you're going about this.
• 2:20
  Yeah, I mean, you just can't get too precious about anything that you've done.
• 2:22
  And so, like, the, you know, we, we make plans.
• 2:24
  There's charts, there's, there's, there's slides, there's all these great things that we, we encounter.
• 2:30
  But there's also, you know, retail is a dynamic place.
• 2:33
  Technology is a dynamic thing.
• 2:35
  And so we, we've had to be nimble within things that we've done.
• 2:38
  And so it might be, you know, we need a little bit more performance out of this, we need a little bit more integration out of that, or we may have launched an MVP that needs further iteration.
• 2:47
  And so the, the whole goal for us has been able to take advantage of what we can take advantage of and flex when we need to.
• 2:53
  And that definitely, this year has definitely been a testament to the, the fact that, like, that is unavoidable for us.
• 2:58
  Right.
• 2:59
  That's really interesting.
• 2:59
  That's kind of counterintuitive to human nature too.
• 3:01
  I got to think it sometimes, like, to try to take that approach.
• 3:04
  You got to constantly remember and remind yourself like, modularity matters in how you're thinking about things.
• 3:08
  Well, it requires us to look and say, that didn't go as according to plan.
• 3:12
  Right.
• 3:13
  And, and you know, whether we got a pause, rethink, relaunch, retool, whatever it might be.
• 3:17
  And so I would say this year has been a mixed bag of some of the projects go exactly as we want.
• 3:21
  Some take a little bit longer than we thought.
• 3:23
  But the, the thing for us is, like, don't let perfection become the enemy of progress.
• 3:27
  Right.
• 3:28
  And we, we roughly know what we want to do.
• 3:31
  We think we know what our advertising partners want to do.
• 3:33
  And we just have to continue to push forward to that North Star until we.
• 3:36
  And I don't know if we'll.
• 3:38
  It's healthy to be a little discontent all the time.
• 3:41
  And so we continue to push for that and see, like, how far can we push this thing.
• 3:44
  That's great.
• 3:45
  I almost, actually, I almost quoted you this morning when I was interviewing one of your counterparts at a retail media company that's also here or they run a retail media organization for a fellow grocer that's also here.
• 3:56
  And the reason I did that is because something you've said has struck with me when I've interviewed you in the past and when I've read about you and followed you on social media, too, is that you say retail
• 4:06
  media is there to enforce the.
• 4:08
  Reinforce the value of the membership.
• 4:11
  Can you talk about that?
• 4:12
  Why is that your position?
• 4:14
  Ultimately, it's the only way we can get the job done at Costco.
• 4:18
  That is, like, abundantly clear.
• 4:20
  And I just passed three years with the company, and so I knew it going in, I know it a lot more now is something that makes sense for retail media or makes sense for a media agency or for
• 4:31
  marketing activations may not make sense for Costco.
• 4:34
  And I know when those two things butt up against each other, I know what side's gonna win.
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  And like, I'm a big proponent.
• 4:41
  I don't think this is any rocket science or anything particularly astute by me, But a retail media program is only as strong as its underlying retailer.
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  So if your retailer has a growing customer base, growing sales, and is generally viewed by the supplier community as an.
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  As an agent of growth, then it changes the dynamic of the retail media proposition.
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  And so we can't subordinate the member or the member experience or merchandising or operations to what we're doing.
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  We live in service of that world.
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  And so, like, it's not false humility, it's just reality.
• 5:12
  But it is also a new.
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  The important point, too, that I think you're trying to make, mark, is it's also a nuanced.
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  It's a.
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  It's a nuanced understanding in the relationship between you, Costco and the advertiser too.
• 5:22
  Right.
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  That it's not just about selling the item at the end of the day, it's about.
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  You're looking for more out of that relationship.
• 5:28
  Yeah.
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  And it might be because I represent a membership organization.
• 5:32
  And so for sure, like, we don't talk about loyalty the way other retailers talk about loyalty.
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  Membership is loyalty.
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  You join, and if you shop, you renew.
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  If you renew, you're loyal.
• 5:41
  Right.
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  And of course, like, we do want to take a look at, are you shopping more categories over time?
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  Are you spending more, making more visits?
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  Is your basket getting bigger?
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  Are you leveraging our ancillary member services?
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  Like, all those things matter, but the mark of a loyal member is a member that renews.
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  And so I think that that mindset shifts everything that we do because I think suppliers view us the same way.
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  If you can win, if you can acquire or acquire a new shopper at Costco, you're Probably going to be able to keep that member over time.
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  And if you can't drive growth and sales velocity at Costco, you're not going to be at Costco very long.
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  So that forces the supplier to also think about a longer term outcome rather than, I need to win the day, I need to win the week.
• 6:24
  Because we're thinking we want to retain members and a cpg, a supplier is thinking I need to retain a shopper.
• 6:30
  Right.
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  And both of those things can work magically well at Costco if we focus on what matters most for retail media.
• 6:36
  We're just trying to deliver the story, we aren't the story.
• 6:39
  And so as long as we can keep that at the forefront, I think we'll be all right.
• 6:43
  Yeah, it's great.
• 6:43
  I mean, it's a great, it's a great reminder that the membership serves as like almost a constant scorecard for you all.
• 6:48
  You know, in a lot of ways I'm curious, so I want to put your feet to the fire a little bit too.
• 6:51
  I don't want to let you off easy.
• 6:52
  What is there, is there an example you can give us of where you had to say no, where you were like, you know what, this maybe in a traditional retail media setting would work, but at Costco, nope, that's
• 7:01
  not our type of thing.
• 7:02
  Yeah, we very recent and potent and maybe a little PTSD inducing thing is like, post transaction is a hot topic right now.
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  And almost every retailer at this point has implemented some form of post transaction monetization.
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  And there's a very common model and that model's turnkey.
• 7:19
  I think it works.
• 7:21
  If it didn't work, then I think a lot of retailers wouldn't be doing it.
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  And it requires very little technical and commercial resources to get it done.
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  And like, as the guy responsible for driving media revenue, the business case writes itself.
• 7:34
  It's very tempting.
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  It's something that I, me and my team have pursued.
• 7:38
  But every single time you just kind of go up against that, that filter of is this something that we actually want to do?
• 7:43
  And if you actually sat down and said, do our members want this?
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  Like, the answer is no.
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  Like, clearly it's no.
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  And so we could force it.
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  Like, would they endure?
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  It is very different than will they, will they like it?
• 7:55
  And, and the thing is, is like, do they like banner advertising?
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  Do they like sponsored product ads?
• 7:59
  Like they can, if they're helpful, right?
• 8:02
  If they're, if they're presenting new opportunities, if it's helping them discover new items or find out about things that they might enjoy.
• 8:07
  And, like, that's a little bit easier for us to rationalize.
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  Whereas there are certain form factors that feel a little bit more of a money grab.
• 8:14
  And usually the more turnkey the solution is, the more likely it is that it's just a money grab.
• 8:20
  And so, like, that's one that was hard for, like, I'm not the one who said no.
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  I'm.
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  I'm the one thinking like, man, like you.
• 8:27
  And I've talked about some other ones which we won't mention, but.
• 8:29
  Yeah, yeah, very helpful.
• 8:30
  But.
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  But at the end of the day, though, that's where, like, in Costco culture, it's, you know, you bring a friend when you make these decisions, right.
• 8:37
  Ultimately, you're like, what's right for the member.
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  It doesn't matter what, how big the number is, how many zeros it has.
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  We will always look through that filter.
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  So that's an example when we have very recently said no to man, I.
• 8:47
  Always love having you on.
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  You always give me a nugget, like the turnkey thing, that's a nugget for everyone to take back.
• 8:51
  That's listening and watching.
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  All right, so the other point that we have to talk about is, you know, most of your business happens in the warehouse itself.
• 8:59
  So how do you connect ad exposure to warehouse in warehouse sales?
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  Let's start there.
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  And how does the membership play into or not play into that?
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  It plays into it entirely.
• 9:09
  Okay.
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  It's either that or it's witchcraft.
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  Ultimately, everything has to be traceable, which is easier said than done.
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  And privacy regulation doesn't make that any easier.
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  And so we say, like, our filters are, is it legal, Is it ethical?
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  And then does it reinforce member trust?
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  Right.
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  So that's always the filter we go through.
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  But fundamentally, to be a worthwhile retail media partner, we have to be able to connect online digital exposure with warehouse sales.
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  Because for us, it's about 90% ish, depending on the category.
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  There's examples on the high and low end of that range.
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  But ultimately, that's where most conversions are happening.
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  It's where we have the most traffic, the most growth.
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  We open new buildings, we sign up new members.
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  They're generally shopping in the warehouse.
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  We have to be very good at this.
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  And so for us, we already have the member with the member transaction data.
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  We've had it for a very long time.
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  You know, for.
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  For retailers have a loyalty program.
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  They may have a high card scan rate.
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  For us, it's 100% traceable transactions.
• 10:06
  Got it.
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  And it spans multiple categories across usually multiple decades.
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  And so there's a lot there, but it's useless if you can't connect a digital exposure at a, at a identifiable level.
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  So we've, that's usually valuable if you can too.
• 10:21
  Right, right.
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  That's the key piece here.
• 10:23
  Well, like there's always like, you know, you have models, you have deterministic and all that.
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  Like our thing is like we should be 100% deterministic all the time.
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  So from a targeting perspective, it's 100% deterministic because we know what people buy.
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  Right.
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  And there are solutions that help us to onboard that data for digital activation.
• 10:39
  But on the, on the measurement side, it's all who owns the exposure in our own and operated ecosystem, like we've solved for that, we can now track that behavior and whether it's purchase behavior, click behavior, whatever it may
• 10:50
  be at a member level, which enables us, it fuels that personalization engine that we have.
• 10:55
  And again, it's not necessarily new technology.
• 10:58
  It's just a willing or it's a commitment to understand that we can never tie a warehouse purchase to a digital impression until we've done this critical first step, which is to capture events at an identifiable level.
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  It gets complicated off site, but there are solutions for that.
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  And so we leverage clean rooms and a variety of different partners to help us have as much clarity as possible today.
• 11:22
  It really is the clean room model that's working for us today.
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  But I would say we're not done innovating in that space because with the goal of 100% deterministic targeting and 100% deterministic measurement, we have to be very, very good at this.
• 11:36
  Nice, Nice.
• 11:37
  All right, I want to get you out of here on this.
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  I want to look to the future a little bit.
• 11:40
  You've spent since, since I've known you, you've spent the last few years, you know, building out the retail media business at Costco to what it is.
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  But, but now I want to talk to the future.
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  I want to talk to the future about how things are going to change.
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  So how do you think about the evolution of retail media with the rise of agentic AI, where agentic shoppers are going to be doing the purchases for you via Costco's website?
• 12:01
  How are you thinking about that?
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  What new things are coming into play?
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  I mean, you said at the outset, like, you got to keep a mindset where things are always going to change, always going to evolve.
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  So how are you trying to get in front of that?
• 12:12
  To be completely honest, I don't know how in front of it we are.
• 12:15
  For me, it's really about getting our house in order in terms of data ownership and, and data management and all of the identity, the identity layer that we have and the event capture.
• 12:28
  Because I'm a, I'm a big believer people are going to shop the way that they shop and they're going to make these choices and if they find value in agentic, in a, in an agent that shops for them
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  and they want to give them their credit card number and log in and that's how they're going to shop.
• 12:41
  Like, like, it's not.
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  I don't think it's our job to talk them out of that.
• 12:44
  Right.
• 12:45
  But, but we may say like, but we may want to, we may want to figure out how to plug into that.
• 12:51
  Because the thing is, like, if they're driving commerce, then I think that's an okay outcome.
• 12:55
  It's the same thing is like, there's always this fear.
• 12:57
  When the, when the Internet was coming online, the brick and mortar purists were like, whoa, whoa, whoa, whoa, whoa.
• 13:02
  It's just channel shift.
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  We don't want to, you know, we don't want to push demand from the, from the store to the Internet.
• 13:09
  There's no incremental value there.
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  And that may be true.
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  There's no incremental value there.
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  But if you lose the customer because you aren't filling their needs or helping them shop the way they want to shop, then you've lost them entirely.
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  So now you went from no incremental channel shift to now you've lost a loyal shopper.
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  And so for us, I think it's about, like, how do we drive commerce and what role can AI play in that?
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  And from a retail media perspective, there's definitely risk.
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  If more people are going using an agent to shop, that's less traffic on a website.
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  There's less media to publish.
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  But, like, that's where I kind of have to take the retail media hat off, Put the Costco hat on and say, do we, are we are members choosing to shop with Costco?
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  Have, are we, are we integrated enough with the AI shopping agents?
• 13:51
  Really good point that their preferences and our items and our value are coming forward within that work.
• 13:55
  Like, that's more important to me than trying to debate over or trying to protect ourselves from an AI takeover of the world or just pretending like it doesn't exist.
• 14:05
  If it impacts the retail media business, let's say our business shrinks, like from a media sales perspective, but Costco grows as a retailer, I think that's a, that's a choice we'll make 100 times out of 100.
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  And so for me, it's just be realistic about what's happening.
• 14:20
  Our members, consumers, they're going to shop the way they shop.
• 14:22
  Technology is going to change.
• 14:24
  I don't think it's a complete doomsday scenario.
• 14:25
  I think it'd be really cool.
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  But the Internet's been around.
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  E commerce has been around for 25, 30 years now.
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  It's still depending on the channel.
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  5%, 10%, 15%, 20% of sales.
• 14:37
  There's value in all channels.
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  We just have to show up as best we can in each of them.
• 14:40
  Which comes back to the answer the second question that I asked you, which comes back to the memberships and what your goals are ultimate at the end of the day and keeping that, you know, solely in focus.
• 14:49
  All right, follow up to that then.
• 14:50
  From the chair atop which you sit.
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  Have you had any indications as of yet in terms of how advertising might change in the agentic world?
• 14:58
  Is there anything you're getting a hint to now?
• 15:01
  I mean, there's a lot of things that are seductive and like, you'll say, like, this is not a phrase that I can, I have coined, but you know, if you don't have a data strategy, you don't have an
• 15:10
  AI strategy.
• 15:11
  So I think a lot of, a lot of companies, retailers included, have a lot of work to do to get their data in a situation where AI can even work.
• 15:18
  And so like, like if you can do that.
• 15:19
  And then I think that's where the, the opportunities come in.
• 15:22
  I see it in advertising mostly in the operational efficiency space, okay, campaign planning, campaign briefs, channel optimization, those sorts of things, like where, where we can augment the things that a human is doing right to put together to
• 15:36
  just work more efficiently.
• 15:37
  And I think this is for retailers who generally run lean.
• 15:40
  I think that's one of the big challenges for advertisers that are used to a high managed service model or high capitol.
• 15:46
  Like retailers generally don't have large account teams, large, large ad operations teams.
• 15:51
  But the bigger we get and the more we want to play in the traditional media space, the more important it is that we're very good at this.
• 15:56
  And that's where I like, for me personally, I would lean into AI to figure out how do we turn 10 people, you know, 10 people that, that work like working like 100.
• 16:04
  And that's where I like.
• 16:05
  I think AI can help a lot with that.
• 16:06
  There's a lot of redundant data entry, copying, pasting, things that we do today that are just per, like, just perfect for, for an AI tool and agent to take over.
• 16:15
  So I think we'll tread lightly as we move into this space.
• 16:19
  Like human LED is, you know, it's, it's becoming an industry term.
• 16:22
  Right.
• 16:22
  It's definitely a way that we look at it as well, but I definitely see some clear applicability on the advertising side.
• 16:29
  Awesome.
• 16:30
  Great stuff, man.
• 16:31
  Great stuff.
• 16:31
  Always.
• 16:31
  Welcome back.
• 16:32
  Love talking to you.
• 16:33
  Mark Williamson, the AVP of Retail media at Costco.
• 16:36
  Thanks for joining us.
• 16:37
  Thanks to Vusion and to Grocery Shop for enabling all of our coverage here at this conference from Las Vegas as it's happening on the show floor.
• 16:44
  And as always, be careful out there.