BJ’s Wholesale to launch smaller club concept
BJ’s Wholesale Club is piloting a smaller store, BJ’s Market, to serve as an innovation lab and potentially become an expansion vehicle.
The size of the location, to open in Warwick, RI, was not provided in the company’s press release covering the development. B.J.’s boxes range from 63,000 to 163,000 square feet.
Last week on BJ’s fourth-quarter conference call, Bob Eddy, president and CEO, said BJ’s Market “first and foremost” will work as a lab to test assortments, displays, product demonstrations and convenience features.
“One of the things we’re trying to do here in this company is install a culture of growth,” said Mr. Eddy. “And that means we need to up the innovation quotient in the business. And one of the ways to do that is to give people the freedom to do it. And having a place to do it, that’s a safe place, the way we can tinker and try new things is really what we’re after.”
Among other things, BJ’s will test fresh approaches to its labor structure and ways to speed traffic with its front-end model. “All sorts of different things that we’d like to try out, see what works, and then take what works and port it back to the mothership,” said Mr. Eddy.
Bill Werner, EVP, strategy and development, said BJ’s was particularly looking at whether smaller locations would boost omnichannel convenience. Online sales grew 22 percent last year to nearly eight percent of sales. About 80 percent of online sales were fulfilled by clubs through BOPIS, curbside and same-day delivery, up from about 45 percent in 2020.
“Think about the ability for a member to quickly get in and out to get everything they need for the lunch box while you’ll still be able to access all the other value that we offer through our full-size boxes,” said Mr. Werner.
Mr. Eddy added, “If it becomes a new growth vector for us, if it really works in its own right, that would be wonderful. It would be a real symmetric growth chance. Where if this thing doesn’t work, we lose a few million dollars in trying new things.”
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DISCUSSION QUESTIONS: Does a smaller format store make sense for BJ’s Wholesale Club to support omnichannel selling or for other reasons? What should be the biggest factors in evaluating whether to roll out BJ’s Market as a standalone concept?