BJ’s Wholesale Club is conducting a campaign to woo customers of the closed Sam’s Club locations that it directly competes against.
The Westborough, Mass.-based membership warehouse, which operates more than 210 units in 16 eastern states, has been airing radio commercials that specifically mention that former Sam’s Club members are welcomed at BJ’s. In addition, it has sent “Welcome former Sam’s Club Members” postcards to residences in areas surrounding closed Sam’s locations. As reported, earlier this month, Walmart abruptly shuttered 63 Sam’s Clubs across the country, almost 10% of the membership warehouse club’s store base.
In a special “limited-time introductory offer” that runs through April 2, Sam’s Club members can join BJ’s for $25 for a 12-month membership, a more than 50% discount off of the regular $55 membership price. To track the transfers, associates at the service desk and customers joining online have to enter a “SAMS18” market code.
“BJ’s has been very successful,” said Bill Bishop, chief architect and co-founder of the Barrington, Ill-based consulting firm Brick Meets Click. “They are good merchants and I think that the closure of the 63 Sam’s stores is going to definitely work to their advantage.”
Bishop noted that the warehouse club membership has been skewing toward wealthier customers in recent years, and those customers have been gravitating to Costco and BJ’s over Sam’s Club. “I’m not sure how long it is going to take for Sam’s to change the mix of business that they have. What they are doing is fundamentally using location to get themselves closer to higher income shoppers. They are closing stores that don’t have that proximity and they are trying to drive and modify those that do.”
BJ’s is wholly owned by Leonard Green & Partners and CVC Capital Partners, and has become Leonard Green’s crown jewel, said Burt P. Flickinger III, managing director at Strategic Resource Group, based in New York.
“Under its CEO Chris Baldwin and his team, BJ’s has been revolutionized,” Flickinger said. “They have become a shopping mall unto themselves and reversed category killing to their credit in consumer electronics, pet and party, as well as services and travel. BJ’s is exceptional at credit card marketing, data base marketing and converting customers from other classes of trade.”
Flickinger continued, “One of the reasons Sam’s Club closed so many stores is because of BJ’s exceptional ascendancy under Baldwin’s leadership. BJ’s has been dominating in markets where they are co-located with Sam’s Club. They are doing an exceptional job at increased sales per customer, increasing their customer base, as well as very successfully converting Sam’s Club customers.”
In addition to consumers, Flickinger said Baldwin has been increasing BJ’s business base with commercial and business customers, as well as large families with many pets.
“Another area where Chris has capitalized on catching Sam’s Club asleep at the switch is with fuel. BJ’s Fuel Perks program is the best anywhere across America. With cross-marketing and discounting with key vendors including Procter & Gamble and Kellogg, customers can save as much as 25 cents a gallon, and that is on top of BJ’s already being the low-price leader in gas in every market,” Flickinger said.
“Between business and conventional customers, BJ’s has been having exceptional growth and Sam’s Club got clobbered and didn’t know what BJ’s did to hit them until it was too late,” Flickinger said, adding that lesson was also lost on Amazon.
“Amazon made a major strategic mistake in not acquiring BJ’s Wholesale Club, which is what they should have done instead of buying Whole Foods,” Flickinger said. “BJ’s could have pole vaulted Amazon ahead of a lot of other competitors based on all of the exceptional initiatives Baldwin and his team are doing at BJ’s.”
And apparently the BJ’s team is still growing.
On its website, BJ’s also notes that it has received “numerous inquiries” from Sam’s Club employees who have lost their jobs. “BJ’s Wholesale Club is hiring, and anyone interested in joining our team can go to www.bjs.com/careers or visit their local club,” the company states.
