Costco Adds Ad Network, Phases Out Book Sales

• by Tanya Gazdik , June 10, 2024

Photo Credit: Tanya Gazdik/MediaPost

Costco is adding an ad network built on loyalty membership data at the same time it is eliminating book sales.

The ad network will use Costco's 74.5 million household members’ shopping habits and past purchases for targeted advertising.

“The wholesale retailer is still testing such capabilities, and it’s fielding offers from potential ad-tech vendors, but the move signals that the third-largest retailer in the U.S. could become a formidable player in the already deeply fragmented retail media space, which is estimated to reach $166 billion by 2025, and responsible for 20% of all digital media spend this year,” according to Marketing Brew. 

The wealth of data will enable the network to help brands reach the right members in the right context based on past shopping behavior.

Meanwhile, one product that customers won’t be able to buy year round at the retailer are books. 

“Beginning in January 2025, the company will stop stocking books regularly, and will instead sell them only during the holiday shopping period, from September through December,” according to The New York Times, which broke the story last week. “During the rest of the year, some books may be sold at Costco stores from time to time, but not in a consistent manner, according to the executives, who spoke anonymously in order to discuss a confidential business matter that has not yet been publicly announced.”

The company had already stopped selling books in its Hawaii and Alaska warehouses in 2022.

“The book industry is facing economic headwinds as younger people migrate to online sources,” according to the New York Post.

Publishing executives said Costco was looking to cut back on labor costs associated with stocking books, which is often done by hand. 

“Costco may not be the country's largest bookseller -- Publishers Weekly editor-at-large Jim Milliot estimates that the retailer along with other big-box stores like Target make up just 4% of book sales -- but the shift is a symbolic blow to an industry that has already been struggling to keep up with rising operating costs,” according to USA Today. 

Customers expressed disappointment about the news on social media platforms. 

"I remember going as a kid in the '90s and the book section was right in the middle of the store and seemed to go on for miles. My parents would just leave me there to browse while they shopped. Glorious," one person wrote on Reddit, according to Men’s Journal. “Others mourned the loss of the children's book section, which allowed many parents to stock up on reads for their kids at a good price.”