BJ's Digitally Enabled Sales Skyrocket 350%

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BJ's Digitally Enabled Sales Skyrocket 350%

By Jamie Grill-Goodman - 05/26/2020
Digitally-enabled sales represented 5% of BJ’s merchandising comp sales for the quarter, compared to 3% in the fourth quarter and 1.5% in Q1 2019.

BJ's Wholesale Club reported that its “digitally enabled” sales skyrocketed 350% in its first quarter of 2020.

During the thirteen weeks, ending May 2, 2020, shopper behavior quickly shifted and the club retailer saw comparable club sales jump 19.9% in the quarter, compared to Q1 2019.

"While the coronavirus pandemic increased demand for our services, our team's hard work and the capabilities we have built over the last four years have enabled us to thrive and deliver very strong merchandise comparable sales,” said Lee Delaney, president and CEO, BJ’s Wholesale Club.

Over the last three years, the retailer has built a robust digital team, which launched buy-online-pickup-in-club (or BOPIC as BJ’s refers to it); same-day delivery; ship from club; and the BJ’s mobile app.

“Our investments in these platforms set us up for success in the current shopping environment,” Delaney said.

Digitally-enabled sales represented 5% of BJ’s merchandising comp sales for the quarter, compared to 3% in the fourth quarter and 1.5% in Q1 2019. Around three quarters of the Q1 growth in digitally-enabled sales was driven by same-day delivery and BOPIC.

BOPIC sales tend to skew towards higher ticket items, the retailer noted, and a same-day delivery sale through its partnership with Instacart has the same margins as a sale in BJ's clubs.

“We believe we have a structural cost advantage as we continue to grow these businesses, especially in our same-day delivery business, which was up more than eightfold over last year’s first quarter,” Delaney continued.

BJ’s also began testing curbside pickup and BOPIC for perishables in select clubs during Q1. Grocery goods, which represent roughly 85% of its merchandise sales, were in extremely high demand starting in late February and continuing throughout the quarter, Delaney said.

The retailer also noted that in late February it was able to identify demand signals, utilizing new demand and fulfillment software, to quickly and significantly bolster order flow and keep up with the surge in demand.

“Our merchants did an excellent job of working with existing suppliers as well as expanding our sources of supply from new vendors, including those that service the restaurant industry,” Delaney said.

BJ’s also said it saw a “strong increase” in the number of new members joining the club retailer in Q1, and membership fee income grew 8.4% in the quarter to $80 million.

Going forward, BJ’s plans to lean into membership investments, upgrading its acquisition tools and integrating membership, marketing and analytics capabilities to continue to accelerate positive membership trends. The retailer recently appointed Paul Cichocki to lead its membership, marketing and analytics organizations.

We believe that new members will be easier to acquire in this environment, and we will invest considerably into membership acquisition and analytics,” said Robert Eddy, EVP, chief financial and administrative officer.