Upon Costco’s creation in 1976, the club retailer has continued to grow in store additions, memberships, and traffic… along with its suppliers. With high quality, low price, bulk product offerings, and the retailer’s “try before you buy” strategy, Costco has created a unique shopping experience primed to expand your brand’s overall market touch. However, maximizing your brand’s potential at Costco can be tricky.

In this blog post, Shan Case, Harvest Group’s Vice President of Costco, explores why obtaining placement for your brand at Costco is crucial for organic growth and how Harvest Group’s deep experience at Costco only strengthens your brand’s organic growth market-wide moving forward.

The Importance of Product Placement at Costco

It is important to obtain store placement at Costco because of the potential organic growth your brand can experience through recent Costco warehouse additions, growing membership, and increased store traffic. Year to date, Costco has opened 14 new warehouses with plans to open an additional 10 new warehouses in the next quarter, bringing the club retailer to 24 new warehouses for the fiscal year (Earnings Report). So, with that understanding, Costco suppliers can experience organic growth strictly through volume increases.

With 3.7 million new members at Costco since 2020, overall membership was up 10.4 percent last quarter. Understanding that Costco members are central to the club retailer’s strategy, Costco announced they will not raise the price of their membership fee this quarter in hopes that consumers continue to find significant value at Costco amid the current inflationary economic environment. Costco store traffic was up 5.6 percent last quarter, continuing eight consecutive quarters of traffic growth, and learned that it “lost less traffic than other retailers during the height of the pandemic” (Earnings Report).

With stores, memberships, and traffic up, it is valuable for your brand to leverage Costco by offering a few unique items in exclusive sizes to drive trial for your brand. Costco’s high volume on limited SKUs helps drive down manufacturers’ overall fixed costs in ingredients, packaging, labor, and energy. Also, members can shop the broader line at other retailers resulting in a win-win strategy because of Costco’s treasure hunt shopping experience.

Getting Your Team Ready to Sell to Costco

When preparing for your Costco meeting, remember the Costco six rights of merchandising.

  1. Right Merchandise – ensure your product is top quality in branding/packaging, exciting, provides great value for the consumer, and propels shoppers on an in-store treasure hunt.
  2. Right Place – be certain your product is displayed presentably; it is important members can identify the product in 5 seconds and from 5 feet.
  3. Right Time – secure a new product at Costco before other competitors have it. Be early in, early out.
  4. Right Quantity – with the limited SKU environment at Costco, it is critical to be in stock.
  5. Right Condition – confirm your product is clean, undamaged, and that the pallet display is ready for the unique warehouse environment.
  6. Right Price – establish a value to rest of market.

How Harvest Group Serves Clients at Costco with Differentiation

Harvest Group provides customized solutions for your brand based on what matters to Costco without disrupting the rest of the marketplace. Your Harvest Group sales leader will partner with you in every step of the process.

  • Strategic Process – We call this our Client Growth Model. We are focused on sustainable, long-term growth. Respond to the short-term insights analytics, while staying focused on the long-term strategy.
  • Execution with Excellence – Costco is so successful because of their detailed focus on item differentiation, quality, and value. Our process at Harvest Group includes a deep dive into item development, promotional planning, and preparing our clients for supply chain readiness in order to be victorious at Costco.
  • Technology – Our technology platform, Ember, efficiently analyzes data to deliver insights, and answers the why’s of the business, so that we can adjust, capitalize on trends, and deliver growth. We see the consumer shifts as they happen.
  • Team Structure – We provide functional experts for each of our clients with a low client-to-resource ratio. Our clients have a seasoned sales operations manager who understands Costco’s supply chain requirements, and an account manager wearing your jersey that is not overloaded with clients.
  • Digital Expertise – As the consumer continues to shift, we see it in the data via our in-house tools, i.e. Share of Search tool, react to the insights, and adjust content if needed. Additionally, we have the team to adjust the digital advertising strategy, serve ads, and continue to read and adjust.

If you’re interested in learning more about how Harvest Group’s services clients at Costco, reach out to us at hello@harvestgroup.com or fill out our Contact Us form here.

Related Reading: Harvest Group Opens Office Serving Costco

Shan Case

Author Shan Case

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