When we stop in to buy bulk items at our local wholesale club, we don’t expect to encounter Millennial shoppers stacking 24-count rolls of toilet paper into their carts. Yet, as many Millennials age into adulthood, these already-frugal money managers are looking for ways to get more for the dollars they spend, and according to a story in Retail Dive earlier this year, more and more of them are cozying up to wholesale clubs.
Wholesale club stores are seeing significant gains with older Millennials in particular, according to Richard George, professor emeritus of food marketing at St. Joseph’s University’s Haub School of Business, who was quoted in the piece. These consumers, aged 30 to 36, typically have more disposable income, have bought or are looking to buy a home, and are more likely to have young children.
Further, Jeff Fromm, a partner with the ad agency Berkley and co-author of “Millennials with Kids,” added that the percentage of Millennials with families who shop at club stores is higher than that of the overall U.S. population — 32% versus 26%, respectively.
As more Millennials age, they represent a significant sales opportunity for wholesale clubs that can build loyalty with this growing customer base. As a result, wholesale clubs are racing to adjust everything from product to pricing to loyalty programs to win favor with this important group, not to mention compete against the popularity of Amazon’s deals, easy checkout and quick delivery. Strategies include offering more advanced technology, better pricing and more diverse in-store offerings including organic products.
Recently, First Insight announced an agreement with BJ’s wholesale club, which operates more than 210 clubs nationwide, to use predictive analytics and machine learning to better match BJ’s products with the changing expectations of its evolving customer base. Using online social engagement tools to gather real-time preference, pricing and sentiment data on BJ’s potential product offerings, First Insight will filter the information through predictive analytic models to determine which products present the greatest opportunity for BJ’s.
“Providing the products our members really want at the right prices is critical to our growth strategy,” said Lee Delaney, Chief Growth Officer at BJ’s wholesale club in the press release.
“First Insight is helping us make sure we have the right products, including seasonal assortments, with the features and prices our members value.”
The partnership will give BJ’s a leg up on other wholesalers through a more scientific approach that incorporates the voice of the customer, builds confidence in product choices and pricing, and increases speed to market. This approach will not only attract and strengthen loyalty with a growing base of Millennials, but enable BJ’s to keep pace with Amazon.