Costco Wholesale Club is making drastic changes to its photo program, continuing an apparent ongoing exodus from active participation in the category. The company, which closed its in-warehouse labs in 2021, announced that Costco has partnered with category leader Shutterfly to offer a 51-percent discount and free shipping on orders priced above $49.
Beginning Jan. 11, Costco customers can transfer photo account information, photos, and address book to Shutterfly. Beginning Jan. 31, Costco members will have a year to download their photos. And, as of Jan. 28, products and services will no longer be available through Costco but only through Shutterfly. Completed and in-process projects will be unavailable on that date, as well.
The move also signals continued defection away from the PNI platform. Late last year, visual eCommerce platform Amaze announced it won the Sam’s Club photo center business, which had long been featured (along with Costco) as premier customers.
The deal is certainly a win for Shutterfly, which gains direct access to Costco’s affluent but cost-conscious clientele. Considering the drastic discounting happening in the consumer photo space, there’s a question if a 51%-off everyday pricing deal is any better than chasing coupons. Also, considering Shutterfly has to pay Costco a commission on orders, there may not be much margin left for the Redwood City, Calif-based Shutterfly.
Industry consultant Bruce Watermann, of PrintReady Network, noted in this LinkedIn post comment: “In the race to the bottom on consumer photo pricing, 51% is around SOP and no special deal. Costco’s business products were really great for SMB’s, and it will be interesting to see if Shutterfly can successfully maintain that business.”
The other possible market impact is the new “everyday low price” now offered by Costco via Shutterfly may put pressure on competitors to match it, on which they will then have to offer discounts and coupons.
The message sent to members is reproduced below:
Dear Costco Member,
We are excited to announce Shutterfly’s new offerings for Costco members and all of your photo creation needs. Costco Photo Center users will now have access to the entire suite of products and services at Shutterfly, each backed by their 100% satisfaction guarantee.
Shutterfly is the industry leader in photo personalization, offering quality services at a Costco member value. Costco members will receive 51% off every Shutterfly order plus free shipping on orders over $49.
Watch your inbox for more detailed information beginning January 11th, 2023, as that’s when you will have the opportunity to begin the transition. At that time, Costco members can visit Costco.com and click Photo to opt-in and transfer your Costco photo account information, photos and address book to Shutterfly. Additionally, Costco members will be able to download their images, currently available at CostcoPhotoCenter.com, to their personal computer through January 31st, 2024.
On January 28, 2023, products and services previously available from CostcoPhotoCenter.com, CostcoDVD.com, and CostcoBusinessPrinting.com will no longer be available. Costco members are being offered the opportunity to transfer their photos and address book to Shutterfly.
Projects saved on CostcoPhotoCenter.com will not be available at Shutterfly. If you’ve started a project at CostcoPhotoCenter.com, CostcoDVD.com, or CostcoBusinessPrinting.com or would like extra copies of earlier projects, your order must be placed prior to this January 28th, 2023. These projects include:
• Photo Books
• Greeting Cards
• Collage Prints