BJ's Wholesale Club — overview

• BJ's Wholesale Club is a warehouse club that operates on the East Coast of the United States. The company has 216 stores.

• Lee Delaney is the President of the company, whose supervisory duties also include marketing, among other things. Donna Noa is the VP of marketing at BJ's Wholesale Club.
• It is unclear who the company's agency of record is, although the company worked with Terri & Sandy to develop an ad campaign in 2019.

Company history

• BJ's Wholesale Club was founded in 1984 by Mervyn Weich, who was also the first president of the company. At first, this company was a part of Zayre, which was a discount department store, and the 20th century warehouse giant Waban, before becoming an independent company.
• In the beginning, the company has faced fierce competition from its competitors Sam's Club and Costco, but sustained. By the end of 1988, the warehouse chain already had 22 stores in 11 states. When entering the Midwest in 1991, it faced issues and retreated two years later.
• The company hasn't always been profitable as desired, as it faced issues in 1992, when it didn't reach the expected results. As a consequence, the CEO of the company Waban was replaced.
• By the end of 1993, the chain had stores across the east coast.
• The company drove down expenses by using cross-docking facilities for acquisition of goods. This enabled it to charge manufacturers a lower fee and retain lower inventory levels.
• The company operated at a satisfactory level until today, going private in 2011 and then again public in 2018.

Company growth

• Comparing BJ's Wholesale Club's 2019 fiscal year results with 2018, it is evident that the company has seen an increase in revenue, income and total sales.
• During the 53 weeks preceding February 3rd, 2018, the company saw $12,754,589 in revenue, while during the 52 weeks ending on February 2nd, 2019, the company saw $13,007,347 in revenue. This is a 2% increase.
• During the same time periods, the company saw a 1.8% increase in net sales, from $12,495,995 in 2017 to $12,724,454 in 2018.

Target audience

• According to BJ's Wholesale Club current CEO Chris Baldwin, his company caters to middle-class working families who want to save money.
• According to RetailDive, this wholesaler is increasingly targeting younger customers.

Key competitive advantages

• BJ's Wholesale Club offers a wider array of grocery stock keeping units than its competitors, which makes it resemble supermarkets while offering cheaper prices.
• It also offers better prices, cheaper membership than Costco and issues discount coupons, which other wholesalers don't do.

Value proposition

• The wholesale club offers low gas prices, digital coupons and cash-back perks for its members.
• Overall, the company claims it offers fresh items, as well as 'real savings', which is the main value proposition of the brand.

Key mergers and acquisitions

• In 2011, after it stopped being a public company, BJ's Wholesale was funded by CVC Capital Partners and Leonard Green & Partners. It was acquired by Beacon Holdings.
• In 2018, the companies sold their stakes and BJ's Wholesale made its second initial public offering.

RESEARCH STRATEGY

Black Friday Deals

•  This article published by USA Today highlights several retailers who have published Black Friday ads, including BJs.
• The article states that BJs' 11 Days of Black Friday sale will begin on November 22.

Free Turkeys

•  This article published by Business Wire in November 2019 highlights Thanksgiving deals at BJs.
• BJs members can receive a free turkey if they purchase 3 qualifying items and present a coupon at checkout.
• The article also highlights other deals on foods traditionally served for Thanksgiving.

New BJs Wholesale Club

• The Detroit Free Press published this article about a new BJs wholesale club opening in Madison Heights, MI in November 2019.
• The article notes that this is the first of 3 clubs that will be opened in Michigan.
• The new location is 100,000 square feet and has a gas station.

Stock Performance

• In November 2019, TechRecorder published this article on the performance of BJs stock.
• The article notes that BJs stock is expected to rise by at least 41.63% and that as a result, investors are holding on to stock even though the company saw a slight downturn in stock value at the end of the last quarter.
• The article also states that BJs stock value increased 10.87% in the last year.

S&P 400

•  This article published by the Worcester Business Journal in October 2019 covers the addition of BJs to the S&P Midcap 400.
• BJs replaced Covetrus, Inc. on the list.
• The addition of BJs to this list caused an increase of 6% in the price of BJs stock on the day it was announced.

Feeding America Donation

• This October 2019 article on Business Wire states that BJs Charitable Foundation made a $1 million donation to Feed America.
• The donation is part of BJs partnership with Feed America in an effort to end hunger.
• This is the third year in a row that BJs has made a $1 million donation to the charity.

Meals on Wheels Donation

• This October 2019 article on Yahoo Finance reports on a donation made by BJs to Oakland Meals on Wheels.
• BJs donated a year's worth of gas and tires to the non-profit organization in celebration of the opening of two BJs gas locations in Michigan.

Location Approved Near Wetlands

• In October 2019, Stanten Island Live published this article on the approval of a BJs to be built next to protected wetlands.
• The construction of the store is controversial due to its potential impact on the wetlands.
• The start of construction is not yet scheduled.

Alcohol Delivery

•  This article published in October 2019 by Supermarket News is about BJs' expansion of their alcohol delivery service.
• The chain already provided the service in Massachusetts and Connecticut and recently added it in Ohio, Florida, Virginia and North Carolina.
• Beer, wine and hard liquor can be ordered online and delivered on the same day.

New President

•  This article published by Supermarket News in September 2019 announces that BJs promoted Lee Delaney to President of the company.
• Lee was previously chief commercial officer for BJs.

Redesigned Mobile App

• This September 2019 article in Retail Dive covers a redesign of BJs' mobile app.
• The new app has multiple new features, including allowing members to track their savings and check BJs gas prices.

Core Marketing Strategy

• BJ's Wholesale Club Inc's core marketing strategy is aimed at increasing membership growth and overall sales in the long-run. Therefore, it entails approaches such as marketing campaigns, which act as incentives for the public to become members of the club and enjoy the benefits it offers over the competitors. Since fresh foods are the company's differentiating factor, the marketing strategy emphasizes on promoting grocery sales by mentioning their reduced prices.
• Marketing is done using various media featuring messages that are designed to draw in new members such as "Welcome Former Sam's Club Members" postcards used in one of the campaigns. BJ's prioritizes sales in its core marketing strategy by encouraging the public to join the club and purchase products at discounted prices, among other benefits. It also concentrates on customer engagement by introducing benefits that make people join, such as limited introductory offers and treasure hunts.
• The strategy to increase sales also includes convenience features such as online purchase and same-day delivery with the items which contribute to more than three-quarters of sales being available for same-day purchase.

Marketing Campaigns

1. Cross Channel Campaign- "We Don’t Need a BJ’s Wholesale Club."

Overview

• The TV and video commercials launched on July 15, 2019, in Detroit before the opening of BJ's first two locations in Michigan during Fall.
• It highlighted the company's fresh take on the wholesale club experience.

• The ads center on a character called Frank, who tries to convince other consumers not to join BJ's.
• However, while giving his reasons, he ends up highlighting BJ's benefits and convincing the consumers, including his wife Brenda, to become members.

• In the awareness- focused ad campaign, some reasons to become a member of BJ's include 25% everyday savings on crucial food and nonfood items and a greater variety of fresh foods compared to other warehouse clubs.

• It is the only warehouse club that accepts manufacturers' coupons in addition to BJ's coupons.
• The commercials also illustrate the fact that members can purchase gas for two cents per gallon. That is enabled by the Gas Savings Program.
• The "Every day ClubVeniences" also include shopping at BJ's.com, pick up in the club, quick delivery of groceries, and the BJ's Stocked program.
• Terri Meyer, the co-founder and co-CEO of the creative agency responsible for developing the ad campaign, said that they wanted work that was just as unexpected as what BJ's wholesale club has to offer.

Channels Used

• The channels used in the cross channel campaign were television, radio, digital and social media, and OOH ads.

Core Objective

• According to BJ's chief commercial officer, the main objective was to highlight the attributes that differentiate the warehouse club from its competitors.
• The focus is on the everyday grocery prices that are, as the company claims, 25% less than supermarket prices on national brands.
• The campaign builds on the promise of offering consumers savings, creating a fresh take on the wholesale club, and other reasons for joining BJ's. It was done ahead of the opening of Taylor and Madison Heights, Michigan warehouse clubs.

Marketing Tools

• Social media was used as a marketing tool, whereby the video ads popped up on Facebook and Instagram.  
•  Traditional media was used as a tool and included commercials on television and radio.
• Digital Marketing Media featured interactive online advertisements. BJ's Wholesale Club's ads reached potential customers on their smartphones and computers, prompting them to join the club.
• Out- of -home ads were also used as part of digital marketing tools.

Results

• The campaign raised more customer awareness about BJ's offerings, discounts, and key differences between it and competitors.
• Frank, the entertaining anti-spokesperson's protests made consumers question why they had not joined BJ's yet.

2. A Marketing Campaign to Woo Customers of the Closed Sam's Club Locations.

Overview

• In January 2018, BJ's Wholesale Club conducted a marketing campaign to woo customers of the closed Sam's Club locations, with which it was in direct competition. It was done using radio commercials, which specifically mentioned that former Sam's Club members were welcomed at BJ's.

• BJ's also sent "Welcome Former Sam's Club Members" postcards to residences in the areas near closed Sam's locations.
• In a special "limited-time introductory offer" which ran up to April 2, 2018, Sam's Club members could join BJ's for $25 per 12-month membership. That was more than a 50% discount off of the regular $55 membership price.

Channels Used

• The channels used in the campaign were radio and postcards.

Core Objective

• The main objective of the marketing campaign was to woo the former members of the closed Sam's Club locations.

Marketing Tools

• Traditional marketing was used through radio commercials and postcards.

Results

• BJ's received numerous inquiries from Sam's Club employees who had lost their jobs.
• There was also an immediate increase in Sam's Club members joining BJ's Wholesale Club.

Bjs Wholesale Club Inc. Competitors

•  Costco is a wholesale chain that has hundreds of stores stretching across the entire United States, and offers everything a typical wholesale chain would, as well as high-end goods, such as organic food and designer jeans.
•  Sam's Club is a wholesale chain spread across the US with more than 600 stores and 47 million members, offering groceries and office supplies, as well as jewelry and furniture.
•  Boxed.com is an American online wholesale retailer which offers membership-free shopping and delivers bulk-sized packages via the Boxed app or the website.
•  Smart Foodservice (formerly Cash&Carry) is a chain of wholesale American grocery stores spread across the US. with a similar offering to Costco.
•  C&S Wholesale Grocers is an American wholesale chain that specializes in offering food and grocery store items across the US.
•  Jet.com is a Walmart subsidiary focused on offering low-priced wholesale products via online ordering.

Research methodology

• The company had to be a wholesale chain that sells all of some of the following: electronics, groceries, and other household items.
• The company had to be operating on the East Coast of the United States and/or the states of Ohio and Michigan.

Costco

• Unlike many traditional retailers who spend large sums on advertising and marketing, Costco has virtually no advertising budget at all.
• Costco has received the reputation of turning their customers into loyal fanatics.
• The company has been criticized for its lack of effort when it comes to sustainable initiatives.

Sam's Club

• Rather than utilizing traditional marketing, Sam's Club aims to discern their customer's needs by monitoring their mobile app usage and targeting products to them based on their habits.
• Sam's Club excels in expanding into new market areas and creating a high level of customer satisfaction.

Boxed.com

• Boxed.com aims to make bulk shopping convenient, fun, and easy. The company offers the ability to shop anytime, anywhere with an app operated from a mobile phone.
• Items are delivered to the address of the customer and can be scheduled to fit in with daily routines.
•  No memberships are required to use the service.
• The company also offers express services and personalized shoppers in some locations.

Smart Foodservice Warehouse Stores

• Smart Foodservice Warehouse Stores is a wholesale food distributor in the Northwest.
• They have over 8,000 products available at each of its 67 locations and provide a comprehensive range of food supplies, wholesale restaurant supplies, catering supplies, and chef supplies to local businesses to help them save both money and time.

KEY FINDINGS

• C&S offers quality services at a low cost. Their world-class supply chain capabilities and innovative insights also serves as their competitive advantage.
• C&S provides best-in-class service and delivery of more than 137,000 products across different stores. Their affordable pricing and good services also serve as a core strength.
• Jet's main competitive advantage revolves around its cutting-edge technology, real-time pricing engine, and commitment to transparency.
• Jet invest in initiatives to help provide the best services to their clients. They aim to openly share their information and ideas to help empower their clients.