Could Medical Devices Be Coming to a Costco Near You?

Posted in Medical Device Business by Jamie Hartford on May 12, 2014

Makers of low-risk medical devices could reap a number of benefits by selling their products in warehouse stores.  

By Martin Riedi

Low-risk medical devices such as hearing aids, vision aids, wheelchairs, and walkers have traditionally been sold in physical locations such as doctor’s offices and in recent years made the leap to online. But a new opportunity is emerging that many believe could be the biggest opportunity yet for makers of these products: warehouse stores.

Recent research shows that consumers are willing to consider purchasing low-risk medical devices in stores such as Costco, BJs, and Sam’s Club. A survey by hearing aid manufacturer Phonak found that 3% of consumers purchased a hearing aid or ear care product from a warehouse store. Better yet, there appear to be low cannibalization rates between this channel and more traditional sales channels. In 2012 , Costco reported that its sales of hearing aids had grown 26% per year on average for the past four years, and executives expected another 19% gain in 2013. To the surprise of many, hearing aids have been cited as one of the company’s fastest-growing business segments.

Bringing low-risk devices to mainstream venues such as warehouse stores makes them more accessible for customers. From the manufacturer’s standpoint, offering products in the warehouse channel allows for additional brand touch points and exposure to the target audience. For example, previously a user might only have been exposed to these low-risk devices when making a separate trip to a specialty store or inputting an order online. Now, customers are exposed to the brand when running a weekend errand at a warehouse store. Additionally, broadening distribution to include warehouse stores can attract new customer segments. People who would not have a personal need to visit a specialty medical store will now be exposed to these low-risk devices when they shop for everyday items at warehouse stores.

Some manufacturers of low-risk devices adopted warehouse distribution channels early on. For example, warehouse retailers have been selling contact lenses and glasses for years, and many stores have trained optometrists on staff. More recently, makers of hearing care device have also adopted this channel. Costco employs licensed audiologists and hearing aid dispensers. So it stands to reason that these stores can staff professionals or even use sales representatives to train their associates to sell other low-risk medical devices in a way that demonstrates understanding and expertise.

To be successful, the healthcare industry must leverage multichannel marketing as a tool to attract new customers through different media. Category and penetration rates have historically grown as consumer awareness and access increases through new channels. This benefits other existing channels, too. One channel, such as online or warehouse, will never replace another channel for healthcare products—and that’s not the goal. Different channels offer different benefits. Membership warehouse clubs, for example, offer a strong value proposition and convenient operating hours. It’s important to understand the respective strength of the channel and to leverage these.

However, without a marketing mix that cultivates relationships with new and existing customers, low-risk medical devices will be viewed as commodities–easily interchangeable from one brand to the next—instead of as a unique brand that has an identity and relationship with its customers.

Martin Riedi is director of market insight at Phonak, a manufacturer of hearing aids for children and adults. Reach him at


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