Dive Brief:
- Starting today and running through November 4, BJ’s Wholesale Club will run a “Welcome One and All” event where shoppers can experience a BJ’s membership for free, according to a press release.
- This promotion coincides with the wholesaler’s recent updates to its in-store product assortment, including additional fresh items, as well as new capabilities like online shopping with store pickup, same-day delivery, digital coupons and the BJ's mobile app. During the promotion, non-members can also take advantage of discounted fuel prices at BJ’s Gas stations.
- The Westborough, Massachusetts-based wholesale club chain operates a full-service deli department and claims its grocery prices are 25% less than competing grocery stores. BJ's operates 215 club stores and 136 fuel stations in 16 states.
Dive Insight:
As the smallest of the three big warehouse chains in the U.S., BJ’s has been working to edge up in the rankings. With Walmart’s recent closure of 63 of its Sam’s Clubs, the Massachusetts-based club retailer says it's seeing increased membership at many of its stores. It hopes to capitalize on these new customers and also draw in new ones with enhanced promotions, digital services and an improved grocery assortment.
The company recently updated its website to showcase featured products, top categories, personalized recommendations and seasonal solutions. Around the same time, the company beefed up its ordering capabilities, with store pickup within two hours now available for free at all 215 stores. BJ's has also launched "Add-to-Card" coupons, which can now be applied to online orders. Previously these digital coupons could only be redeemed at a club check stand. All of these functions can also be performed on BJ's new mobile app.
To give even more incentive to turn visitors into members, during this promotional period, shoppers not currently enrolled in membership can sign up for a free three-month trial membership or join for $25 for the year. Memberships are generally $55. Memberships at Costco are $60 and Sam’s Club sells them for $45.
Although middle of the road in membership pricing among warehouse retailers, BJ’s has the best prices, according to Reader’s Digest. These savings have clearly enticed consumers to buy memberships. After a seven-year hiatus, on June 28 this year the company began trading on the New York Stock Exchange again. The results were encouraging, with net sales up 4.3% to $3.2 billion in this year's second quarter. The company now says it expects full fiscal year net sales to range between $12.6 billion and $12.7 billion and merchandise comparable store sales excluding gasoline sales to rise 1.8% to 2.1%.
Still, BJ’s has a long way to go if it’s going to prosper against Sam's Club and red-hot Costco. One advantage it has is its fresh food selection. At BJ’s, fresh food makes up 27% of its sales whereas at Costco, by contrast, the fresh food section makes up 16%, according to Business Insider. By bridging this gap between bulk and weekly grocery needs, BJ's is building regular trips with customers – a smart tactic since members are more likely to make other purchases once they’re in the store.
With 215 clubs in 16 states, BJ’s is far from becoming a national staple. However, by catering to its demographic in a smaller area, the wholesaler has a chance to tap into customer needs and more effectively tailor its offerings. With deals on everything from deli meat to gas and travel, doing so stands to make the company a one-stop-shop for customers.