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BJ's Wholesale (BJ) Digital Transformation Effort is Paying Off

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BJ's Wholesale Club Holdings, Inc. (BJ - Free Report) 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.

Digitization a Key Catalyst

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). Management believes that digitally engaged members have higher average baskets and make more trips per year than members who shop in-club only.

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 enables 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.

We note that digitally-enabled sales rose 31% during the first quarter of fiscal 2021. On a two-year stacked basis, the metric soared 381% and drove nearly 7 percentage points of merchandise comparable sales, excluding gasoline sales. On a stacked basis, the company witnessed sturdy growth in all its digital channels, especially BOPIC, curbside pickup and same-day delivery. A significant portion of digital growth is being fulfilled through clubs.

 

Zacks Investment ResearchImage Source: Zacks Investment Research

Enhancing Shopping Experience

BJ's Wholesale remains on track with its plan to allow members to use EBT payments, when shopping on BJs.com for in-club pickup and curbside pickup. Markedly, the company’s members in Florida and North Carolina can 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 allows 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.

Impressively, shares of this Zacks Rank #3 (Hold) company have climbed 26.3% in the past six months compared with the industry’s growth of 5.4%.

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Target (TGT - Free Report) has a long-term earnings growth rate of 13.3%. It currently flaunts a Zacks Rank #1 (Strong Buy). You can see the complete list of today’s Zacks #1 Rank stocks here.

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Costco (COST - Free Report) has a long-term earnings growth rate of 9.1%. It presently carries a Zacks Rank #2 (Buy).

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