How smart is Jet.com’s decision to delist Costco’s Kirkland brand?
Walmart apparently has no problem selling Amazon.com’s Echo and Fire devices on its website, but the company has to draw the line when it comes to allowing its Jet.com business to sell Costco’s Kirkland private label.
Jet.com spokesperson Meredith Klein confirmed that the site is phasing out the sale of Kirkland products, according to a Bloomberg report, although some third-parties on its marketplace may carry items from Costco’s line. Searches on the Jet site and Walmart.com turned up multiple pages of results for Kirkland-branded products across a variety of categories.
Jet’s phasing out of Kirkland sales are backed up by numbers from Slice Intelligence, which saw the site’s share of the brand’s online sales fall from 10.9 percent in December to 2.2 percent in May. Only Amazon, which had a 41.7 percent share of Kirkland sales last month, Costco (31.5 percent) and Google Shop (22.8 percent), have a higher percentage of the brand’s sales online.
To replace Kirkland, Jet is shifting its focus to Member’s Mark, the private label of sister company Sam’s Club. Member’s Mark represents about $10 billion in sales for Sam’s and is a central focus of efforts to grow its business. Sam’s has announced plans to introduce 300 new Member’s Mark items this year with a similar number of rollouts scheduled for 2018. Among the new items are sea salt caramels, wines and Fair Trade certified coffee in K-Cups.
“In the past we made sure we were competitive with national brands,” said Chandra Holt, senior vice president of merchandising for Sam’s, in April. “But in today’s environment, a lot of our members want better than that. Our goal is to make sure every Member’s Mark item is developed based on what our members want today.”
- Jet.com Will Phase Out Costco Products After Walmart Acquisition – Bloomberg
- Sam’s Club Reinvents its $10B Private Brand – Sam’s Club
DISCUSSION QUESTION: Has selling products created by competitors such as Amazon and Costco become a reality of retailing today? How will the decision by Jet.com to phase out sales of Costco’s Kirkland brand affect each company?