BJ’s Buying Operating Strategy
BJ’s overall buying and operating strategy focuses primarily on serving the needs of its consumer member. This consumer focus enables BJ’s to differentiate itself from its club competitors.
Grocery Stores
BJ’s doesn’t view Costco and Sam’s Club as its primary competitors. According to BJ’s, just 15% to 20% of its 6.5 million paid members also have a membership at Costco and/or Sam’s Club. BJ’s key competitor is the grocery store or supercenter and its primary goal is to offer a significant value compared to those retail operators.
Brands
BJ’s focus on stocking brand name products is important to its buying strategy. BJ’s philosophy of offering its members a wider variety enables the company to stock branded items that Costco and Sam’s Club would not purchase. Not only does this offer a competitive advantage in terms of product availability, but BJ’s is able to generate higher merchandise gross margins on these items.
Data and Analytics
BJ’s analyzes member shopping data, pricing and promotional data and product data to guide its buying strategy, guide its product selection, help it optimize category assortments, guide where it opens new locations, help it personalize promotional material and help it target potential new members.
Half Pallets
To be able to fit its larger selection of items in a smaller footprint, BJ’s, in many cases, utilizes pallets that are approximately one-half to two-thirds the height of a traditional 52-inch high pallet. Those shorter pallets enable BJ’s to merchandise two SKUs in the same space a single SKU is typically stocked with a pallet on the floor and a pallet above on the steel.
Learn More
To read more about BJ’s buying and operating strategy and how to sell them, download for free the BJ’s Buying Operating chapter from the 2024 Warehouse Club Industry Guide.