Sam’s Club, the Walmart-owned membership club, is making efforts to revamp its private brand, Member’s Mark, in order to catch up with its chief rival, Costco, and its popular private label, Kirkland Signature. The decision to improve Member’s Mark came after Sam’s Club chief merchant, Megan Crozier, experienced a disappointing purchase of an inflatable pool that leaked air after just a few uses. Sam’s Club CEO Chris Nicholas acknowledged Costco’s success with Kirkland Signature as inspiration for the brand’s revamp.
Sam’s Club’s plans to open more stores and expand its presence make the success of Member’s Mark crucial. However, surpassing Costco and its beloved private label won’t be easy, according to retail analyst Michael Baker. Nevertheless, Baker believes that Sam’s Club can follow Costco’s formula for success with Kirkland Signature.
The private label market has evolved in recent years, shedding the stigma of inferior quality and cheaper knockoffs. Retailers like Kroger, Target, and Walmart have introduced their own labels with unique flavors and exclusive items. Kirkland Signature played a role in changing the perception of private labels by offering high-quality products. Other factors that have contributed to the growth of private labels include consumers’ willingness to try new brands during the pandemic, the success of fast-growing grocers like Trader Joe’s and Aldi, and the impact of inflation driving consumers to seek more affordable options.
Exclusive offerings are particularly important for clubs like Sam’s Club and Costco, which require shoppers to pay a membership fee. Sam’s Club’s Member’s Mark accounts for about 30% of sales in terms of dollars and over one-third of sales in terms of units. Costco’s Kirkland Signature accounts for approximately 28% of its annual sales.
In an effort to raise the quality of Member’s Mark, Sam’s Club has consolidated its private labels into a single brand and announced new goals for food and merchandise standards. The company has also launched a program that allows customers to provide feedback on Member’s Mark items before they are introduced to the market. Sam’s Club aims to turn Member’s Mark into a well-respected lifestyle brand and plans to expand its offerings in home categories and small appliances.
The efforts to improve Member’s Mark seem to be paying off, as Sam’s Club has reported a record number of members in each consecutive quarter for over a year. Customer transactions have increased, while the average ticket price has declined, indicating that shoppers are opting for the more affordable Member’s Mark items. Sam’s Club’s sales growth of the private brand has outpaced the rest of the store, giving the club leverage to negotiate lower prices with suppliers.
The success of Member’s Mark will depend on the quality of its products. Since 2020, the brand has launched, tweaked, and upgraded over 1,200 items. One notable success story is the reformulation of the inflatable pool that initially disappointed Megan Crozier. The pool now works well and sells in high quantities at Sam’s Club.
In conclusion, Sam’s Club is making significant efforts to enhance its private brand, Member’s Mark, in order to compete with Costco’s successful private label, Kirkland Signature. The company recognizes the importance of offering high-quality products and exclusive offerings to attract and retain members. While surpassing Costco may be a challenge, Sam’s Club is following Costco’s formula for success and has seen positive results from its brand revamp so far. The future success of Member’s Mark will depend on continued product quality and innovation.
