Boston, 2016-Aug-15 — /EPR Retail News/ — For clubs like Costco, Sam’s Club and BJ’s Wholesale, ecommerce presents both a threat and an opportunity. Though their membership model helps insulate clubs from some online erosion, club shoppers are also more likely than average to cross-shop online. At what point does online cross-shopping eat into club trips? With this question looming large, clubs are increasingly mindful of strategies that capture their shoppers’ online dollars.
To better understand how each club is positioning itself online, Kantar Retail conducted a comprehensive SKU count and pricing study of Costco.com, SamsClub.com, and BJs.com using data retrieved from Content Analytics. Across the board, Costco offered the best online prices. Between clubs, Sam’s Club and BJ’s had the most online SKUs in common, though comparable items between Costco and Sam’s were the most competitively priced.
• Comparing across all clubs, Costco was the most competitively priced online followed by Sam’s and BJ’s, respectively. Costco charges the highest membership fee ($55) of the clubs and this may help enable Costco’s low prices. The three clubs had only nine items in common. More comparable items were available between pairs of clubs, revealing that each club pursued a relatively distinct merchandising strategy.
• Costco and Sam’s shared 39 comparable online items with Costco priced lower on average. While Sam’s barely underpriced Costco on the majority of items, Costco won by a larger margin on select SKUs. Including discounts, Costco was even more competitively priced. Though this set had the fewest comparable SKUs, it was also the most competitive with smaller price differences.
• Costco and BJ’s shared 47 comparable online items, with Costco priced significantly lower than BJ’s. The difference was slightly less once discounts were included.
• Sam’s Club and BJ’s shared 353 comparable items and Sam’s was significantly cheaper than BJ’s. The price differential was smaller when discounts were included.
• By a wide margin, the largest category represented online included business or office-related supplies. This affirms that the clubs are also approaching online as a key platform for business members.
Minimal SKU overlap among the clubs suggests they are pursuing relatively differentiated online merchandising and pricing strategies to appeal to shoppers. For the shopper willing to pay five dollars more for the membership fee, the online pricing at Costco will be hard to beat. Though Costco boasts low prices, attracting shoppers including small businesses will increasingly require online merchandising that encompasses more than just price.
According to Tim Campbell, analyst at Kantar Retail, “For clubs to compete online effectively and boost their share of online shopping, item quality, convenience, delivery, services, and the user interface must be visible differentiators. This is one of several e-commerce analyses we’re undertaking at Kantar Retail that explore how online merchandising is evolving specifically in club and what this means for club members, the club retailers and their suppliers.”
“The right combination of assortment, price, quality of content and availability is key to winning in ecommerce, as evidenced by this latest Kantar Retail study. At Content Analytics we make ecommerce insights available to the world’s leading brands and retailers and help them sell more online with our market leading ecommerce Product Optimization Platform.”
About the Study
Using data retrieved from Content Analytics in May, Kantar Retail compared prices of like-for-like items with identical model numbers across all three clubs online and separately for each pair of clubs online (e.g., Costco and Sam’s, Costco and BJ’s, and Sam’s and BJ’s). All available SKUs with pricing information were analyzed, including 11,161 SKUs at Costco, 9,553 SKUs at Sam’s, and 16,945 SKUs at BJ’s. To eliminate regional pricing differences, the data was retrieved for a hypothetical online club shopper in the Sarasota, Fla., area.
Notes to editors:
About Kantar Retail
We are the retail and shopper specialists. We are a leading retail and shopper insight, consulting and analytics and technology business and part of Kantar, the data investment management division of WPP. We work with leading brand manufacturers and retailers to help them sell more effectively and profitably. At Kantar Retail we track and forecast over 1200 retailers globally and have purchase data on over 200 million shoppers. Amongst our market leading reports are the annual PoweRanking survey and the Digital Power Study. Kantar Retail works with over 400 clients and has 26 offices in 15 markets around the globe.
About Content Analytics
Content Analytics is the leading eCommerce Product Optimization Platform. Our end-to-end solution enables brands to store and catalog product content, syndicate content to multiple retailers and optimize sales through integrated analytics. With Content Analytics, brands gain deep insight into competitive pricing, on-site search rankings, content quality, product assortment and product availability. Once opportunities are identified, it’s easy to take action to improve.
For further information, please visit www.contentanalyticsinc.com.
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Source: Kantar Retail