Imitation is the sincerest form of flattery, and to get ahead in the game Sam’s Club is mimicking its biggest competitor. The company is following Costco’s playbook for their private label, Kirkland Signature…
In hopes it will take their brand, Members Mark, to new heights.
But will the war between opposing wholesalers crown a new champion?
Or are Sam’s Club efforts all in vain?
Kirkland Signature VS. Members Mark
Sam’s Club is going after its biggest rival, Costco, by targeting it’s private label, Kirkland Signature…
And revamping their own private label, Member’s Mark.
The two wholesalers have been up in arms since the beginning of their competition, with Costco winning every time. While the two companies have a similar number of locations…
COSTCO HAS DOUBLE THE ANNUAL REVENUE SAM’S CLUB MAKES.
In 2023, Sam’s Club made $86.2 billion in net sales…
Costco, on the other hand, made $176.63 billion.
Part of what gives Costco the edge over Sam’s Club is the popularity of it’s private label, Kirkland Signature. This label, in essence, revolutionized how storebrand products appeal to customers.
Kirkland Signature is a big draw for Costco Club members, with many of them signing up just for access to the label.
For wholesalers, a private label can amplify annual revenue exponentially. In terms of dollars, Member’s Mark accounts for 30% of Sam’s Club sales. Kirkland Signature, alternatively, makes 28% of sales.
Sam’s Club has big plans to boost Member’s Mark to match Kirkland Signature, and even surpass it…
But it’s not going to be easy…
Especially now.
The Private Label Wars
Between 2019 and 2023, sales of private label products increased 34%, amassing over $236.3 billion.
In recent years, storebrand goods and private labels have shed the stigma of being a cheap knock-off of name brand products.
In large part because of Kirkland Signature…
Customers now expect the same high quality product from private labels as they would from iconic, household brands…
Not to mention, inflation has customers looking for cheaper alternatives to their everyday goods.
Kirkland Signature has long had a loyal fanbase. As aforementioned, the exclusivity of the brand is what pushes customers to sign up for Costco memberships to begin with. Not to mention, this devotion goes beyond brand loyalty…
With many customers voicing their frustration, and subsequent joy when finding out the classic Coscto hotdog combo would not be going up in price.
Sam’s Club is trying to hone in on this same behavior with their private label. To stay ahead of the game, Member’s Mark has been taking a page or two out of Kirkland Signature’s book.
Over the past few years, Sam’s club took all of their private labels and consolidated them into Member’s Mark. Since then, while expanding their product offerings, the company also aims to turn this into a lifestyle brand…
Providing more options for furniture, appliances, and clothing.
One thing that sets Member’s Mark apart from Kirkland Signature is it’s program that allows customers to directly give feedback on products…
Before they’re finalized and put on store shelves.
According to Sam’s Club CEO, the program is already providing incredible feedback to hundreds of existing products.
BUT WILL THIS EFFORT BE ENOUGH?
Game On
Seems like Sam’s Club efforts against Kirkland Signature might be paying off. The company has reported record membership numbers every fiscal quarter for over a year.
Yet overcoming the brand’s biggest competitor is an effort that could take years…
Let’s just hope Member’s Mark is ready for this uphill battle against Kirkland Signature.
Be Great,
GCTV Staff
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