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BJ's Wholesale (BJ) on Track to Strengthen Digital Capabilities

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In this ultra-competitive retail landscape, BJ's Wholesale Club Holdings, Inc. (BJ - Free Report) has been making multiple changes to its business model to adapt and stay relevant. Amid consumers’ growing preference for digital transactions, this operator of membership warehouse clubs has been making investments to enhance omni-channel capacities.

Let’s Introspect

BJ's Wholesale Club has been sparing no effort to bolster omni-channel operations and ramp up delivery services. The company has been directing resources toward expanding digital capabilities in order to better engage with members and provide them a convenient way to shop, including same-day delivery, curbside pick-up and buy-online, pickup-in-club (BOPIC).

The company has built a strong digital portfolio with Bjs.com, BerkleyJensen.com, Wellsleyfarms.com, delivery.bjs.com and the BJ’s mobile app. This facilitates members to buy, review products and digitally add coupons to their membership card. Markedly, the company has launched curbside pickup and expanded BOPIC service for fresh and frozen grocery items at all its locations.

During fourth-quarter fiscal 2020, digitally-enabled sales soared 168% and added 5 percentage points to comparable club sales, excluding gasoline sales. This was preceded by increases of 200%, 300% and 350% in the third, second and first quarter, respectively.

Meanwhile, comparable club sales during the fourth quarter rose 13%, following an increase of 14.1%, 17.2% and 19.9% in the third, second and first quarter, respectively. Excluding the impact of gasoline sales, comparable club sales surged 15.9% during the quarter, after increasing 18.5% in the preceding period. Impressive comparable sales growth of 18% in the grocery division contributed to this upbeat performance.

Measures to Strengthen Digital Offerings

BJ's Wholesale recently started accepting EBT payments for SNAP eligible items on its website. The company’s members in Florida and North Carolina can now utilize their EBT card for SNAP qualified items during checkout, when they shop on BJs.com for in-club pickup or contactless curbside pickup. The service also enables members to check their card balance as well as use multiple payment options.

The company is committed to providing consumers greater flexibility and convenience when they shop online. In prior efforts to strengthen digital offerings, BJ's Wholesale added several new features to its app including easier search and scan functionalities, personalized product recommendations, and seamless navigation for discovering deals and products.

Also, BJ's Wholesale entered into a three-year exclusive agreement with CommerceHub, a leading e-commerce platform that enables online order fulfillment and delivery solutions. The company’s partnership with Citizens Pay for providing customers with improved online financing solutions for large purchases is also encouraging.

Wrapping Up

Undoubtedly, this Westborough, MA-based company is leaving no stone unturned to improve top-line performance and expand customer base be it through better pricing, private label offerings, merchandise initiatives or digital solutions. These endeavors have been contributing to growth in membership signups and renewals, resulting in increasing membership fee income, higher average members per club and decent comparable club sales growth.

Impressively, shares of this Zacks Rank #3 (Hold) have climbed 76.8% in the past year compared with the industry’s growth of 58.3%.

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