Package Design | packagedesignmag.com

(January 2009) posted on Mon Oct 05, 2009

By Ron Romanik

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By all accounts, Costco shoppers are a loyal bunch. In the 25 years of its existence, the big box retailer has become the fourth largest retailer in the U.S. by sales volume, despite having only 400 stores in the U.S. By comparison, all the other retailers in the top 10 have over 1500 outlets each.

Also unlike the other retailers in the top 10, Costco has only one store brand, Kirkland Signature, named after Kirkland, WA, where the company was headquartered between 1987 and 1996. In recent years, the consistent, black rectangular Kirkland Signature logo box has found its way onto packages in a number of unexpected categories, including vodka, scotch, and a variety of French wines. In addition, Costco has expanded its "co-branding" strategy to include some well-recognized brand names.

A black box of approval

The atmosphere of a typical Costco store is one of hustle and bustle. There is a lot to see and explore. The typical Costco shopper probably only visits once a month, and there are often new products on the floor each visit, while other product options may have been discontinued. For many Costco loyalists, seeing the Kirkland logo on a product must certainly be a reassuring sign that encourages the sale. Costco shoppers have come to trust the store, trust the choices it makes in deciding what goods to stock, and expect high quality from Kirkland-branded products.

"The Kirkland brand becomes a 'seal of approval,'" explains Philippe Becker, creative director at PBD International in San Francisco. The logo is instantly recognizable and always takes the top, center position on every package. On the back of each package, the logo is repeated with a guarantee: "Every Kirkland Signature product is guaran- teed to meet or exceed the quality standards of the leading national brands. If you're not completely satisfied, your money will be refunded."

Tom Newmaster, partner at William Fox Munroe Inc. in Shillington, PA, agrees that the Kirkland box on a package is "an endorsement" that means both quality and value. "The packaging doesn't look like Costco is cutting costs, and the customers know the products are going to be good," says Newmaster.