Costco introduced Kirkland Signature products nearly 15 years ago. The idea was to create a line of “signature” products, and Kirkland, Washington, was where the company had its home base at that time. Why invest in our own line of private-label products? There are several reasons, explains Jim Sinegal, Costco president and chief executive officer. With Kirkland Signature, Costco can:
For example, when the jars containing Kirkland Signature cashews were changed from round to square, the number of jars that could fit on a pallet increased from 288 to 432, saving 600 truckloads per year. “We will always be known for name brands such as Michelin and Sony” Jim says, “but we will continue to augment our product offerings with our own Kirkland Signature items. “The working rule followed by Costco buyers is that all Kirkland Signature products must be equal to or better than the national brands, and must offer a savings to our members,” adds Dick DiCerchio.
Another rule is continuous improvement. “We’re constantly looking at Kirkland Signature items, revisiting them with an eye to making them better,” says Jeff Lyons, Costco’s senior vice president of fresh foods.
In the traditional marketplace, brands are built over the years with expensive advertising campaigns built around cornerstone products. In contrast, the Kirkland Signature brand has grown by this formula: Offer high-quality products at great prices, and let the members decide. “With Kirkland Signature, the focus is always on quality,” says Jeff. In other words, the perfect product, from scratch.