Sonova Halts Hearing Aid Sales to Costco; Pulls Products and Brochures
Sonova, the largest hearing aid company in the world and the manufacturer of Phonak and Unitron hearing aids, has discontinued the sale and promotion of its products at Costco, according to sources within both companies. HearingTracker was in contact with two Costco Hearing Centers’ employees who were both instructed on Friday (November 18) not to order or sell any Sonova products, and to remove all pamphlets and signs promoting them.
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Phonak-branded hearing aids have been discontinued for sale at Costco.
As first reported by HearingTracker in October, Costco discontinued the sale of its Sonova-manufactured Kirkland Signature 10.0 (KS10) hearing aid due to issues with device rechargeability. Although some people close to the situation at Sonova acknowledged rechargeability was an issue, they contend the incidence of problems did not rise substantially above industry norms for lithium-ion rechargeable hearing aids. However, they say Sonova ultimately decided to end sales of the Phonak brand at the retail giant primarily for market-driven reasons.
Sandy Brandmeier, President of Hearing Instruments Wholesale for Sonova USA, released this statement to hearing care professionals as this story was going to press:
Based on our recent assessments, we have made the decision to focus the distribution of our Phonak brand with strategic channels and eliminate our offering in certain large retail chains.
We are also ensuring that customers who want to engage in omni-channel models adhere to a new Phonak brand standards agreement for our prescription devices.
Finally, as part of our brand and channel assessment, we can confirm that the Phonak brand will not be offering an over the counter (OTC) solution.
The Phonak brand stands for leading-edge innovation and deep partnerships with hearing care professionals. We want to continue to partner with those who understand how to convey the powerful technology behind the Phonak brand to improve the lives of people with hearing loss.”
While future Costco sales under other Sonova brands remain hypothetically possible, Costco's reaction to having a major supplier walk away remains unknown. HearingTracker contacted Costco and the company’s management declined comment.
Along with the KS10, Costco’s sales of Phonak Brio hearing aids have also been discontinued, although there are reports Brio may still be available at Costco stores in Canada and possibly other countries.
The KS10, introduced by Costco in April 2021, was offered until October 2022, a span of about 18 months—which is about the “effective shelf life” for a typical Kirkland Signature hearing aid. A successor KS11 product is expected to be announced soon. Sonova had also produced the previous KS9 hearing aid, which had an approximate shelf life of 21 months. There has been speculation among industry analysts that Phonak’s new Lumity hearing aid might serve as the template for the upcoming KS11, but that now appears highly unlikely.
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HearingTracker estimates that Costco is the nation's second largest dispenser of hearing aids, following only the VA.
HearingTracker estimates Costco is the second-largest distributor of hearing aids in the United States, with a unit volume market share of about 12-14%, behind only the Department of Veterans Affairs (VA) which accounts for about 18% of all hearing aids dispensed in the country.
Audiologist Matthew Allsop comments on the Costco / Phonak news.
For those consumers who enjoyed access to Phonak’s cutting-edge hearing technology at a substantially reduced cost, Costco is no longer an option. HearingTracker hopes to see other Sonova brands and technology in Costco in the near future.
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WOW!!! No more KS10s. I wonder which manufacturer Costco will source for the coming KS11 iteration.
And " the Phonak brand will not be offering an over the counter (OTC) solution.”
My guess (and it's only a guess) is that, eventually, Sonova's Sennheiser brand will be used for a future OTC. But, judging from the company's comments, they're certainly in no rush to place one on the market and this poses some interesting questions about how they see OTC hearing aid sales developing.
I couldn't agree more, Karl. Also I wonder how well the OTC market will shake out in general. By the time that I realized that I had some hearing loss, my loss was already greater than "moderate." So, how many folks might try the OTC solution and find that the OTC devices will not suffice, and then return them for a refund?
Ask "How many people use the Equalizer feature of their audio equipment?"
VERY few.
Of those that use it, "How many use it correctly?"
Some.
So, ask, "Given those estimates, how many people will PROPERLY configure OTC hearing aids?"
EXTREMELY few? Some?
I'm not an expert, but asked a LOT of questions at my child's hearing appointments.
Having a SKILLED hearing aid dispenser or audiologist properly program and adjust hearing aids is worth the additional cost.
The goal of hearing aids is to improve quality of life.
Fair point but Sennheiser is well known in Europe but not so in the US. Hence, Demant with Philips or WS with Sony or GN with Jabra both have strong and well known US consumer brands, hence they are all much better positioned in the OTC channel
Yes, and everybody walking into Costco is desperately looking for a HelloGo, which is as famous as an Apple iPhone :-)
If only Costco can unlock the hearing aids sold by Costco, will they continue to service the ones they've already sold? If not, how will your local audiologist access them?
I have a KS-9 that may require service, and you can bet that if Sonova won't service the aids, I will never buy a Sonova product in the future, whether from Costco, an audiologist, or any other dispenser.
Yes, Sonova is the bad and CostCo the good. Have you ever studied CostCo's business model with their private label strategy? Price, price, price = king. They kicked out Pampers and replaced it with a no-name and they once kicked out Coca Cola and replaced it with Pepsi...
The KS10s are unlocked. The challenge is finding an audiologist who will work on them for adjustments and such. My assumption is this ends sales, not service and support at Costco for the KS10.
I’ve happily use the KS8's, Costco's last Rexton aids, since shortly after they were released, and I’m eager to learn what the 11's will be. The 8's were my first HA's and improved my hearing substantially. Go ahead, Costco, tempt me into an upgrade!
My KS10 charger started malfunctioning months ago - stopped charging in the middle of the night - so I bought another on eBay. Now one of the hearing aids only lasts about 10 hrs before shutting down. Costco says bring them in for "repair" expected to take 7-10 days. We will see. In the meantime I will use my backup Oticons, which aren't nearly as good. Thinking about switching to Jabra with batteries anyway. I never liked the short life-time for the rechargeable versions.
I think Phonak will come to regret this decision, they are burying their head in the sand. I have Phonak P90 Audeo Marvels, my third set of Phonaks but when they die I will be looking at OTC options before anything else. Phonak would be well served to get into the OTC market as a first mover with lower prices and dominate it as opposed to trying to protect their high margin business, that never ends well, it's a classic business mistake. It works only until the low end quality improves such that they begin to eat into your market share and by then it's too late, customers feel the new product is just as good as yours and conclude you've been ripping them off for years with higher prices. It takes a lot of time and money to get that customer back, if ever.
I really wonder why everybody bashes on the manufacturer. I guess you all know who takes the biggest part in the value chain....
I have been reading the comments about the KS10 being dropped by Costco but nothing about what Costco is doing about the warranty.
I purchased my KS10 hearing aids 2 years ago and the right hearing aid is not charging properly overnight.
Is Costco standing behind the 5 year warranty or am I simply out of luck?
My experience with KS10: I love the connectivity to my iphone and tv. BUT, in the 20 months I've had them, they stopped taking a charge 4 times. nothing wrong with the charger or seating them properly. Costco adds a year to the warranty, so only 3 years total. Even though Costco and Sonovo severed their relationship I'm still getting repairs/replacements.
I recently had a charging problem with my right hearing aid not charging, so contacted Costco in Ottawa. They told me to re-boot my hearing aids by holding down the button for 30 seconds. Then place back on the charger. I also cleaned the contacts on the charger. I also read where you should keep the charging box closed as much as possible to keep dust and dirt away from the contacts.
I have not yet had any problems since taking these steps.
I apparently have been living in a cave. I have the kirkland 10 bought in 2021. Recently i sent the whole system back thru costco not knowing or being informed of any of this tho i have returned to the store a few times for little issues. I have now received the refurbished aids and replacement charger and called before the opening time to express my disappointment and concerns after learning of this situation and to ask where i "stood." Whoever called me back was combative, defensive and down right rude. The representative kept calling them "Phillips hearing aids" instead of Sonovia/Phonak and would not listen when i tried to correct. I had never had that experience with Costco. I was assured my warranty was in place and would be covered with the extended warranty i got thru the costco card. My guess is they have a company line in responding to these inquiries, but i am definitely shaken and disappointed in the Costco hearing aid store front. In fairness, the devices are qorking very well as of this moment