Club store Packaging

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The Club stores have been growing retail phenomena with their large warehouse format stores and exclusive memberships for an annual fee. There are three primary players in the North American market; Costco, Sam’s and B.J’s.  Costco, one example of the three largest Club stores, has grown to be the 7th largest retailer in the world and their impact and influence on packaging dramatically corresponds with their position. These large warehouses service their members by offering products in an industrial setting that eliminates the frills of usual retail shopping utilizing a pallet display merchandising strategy resulting in cost reduction which equals price reduction for the consumer.

Each Club store has identified their individual promotional and merchandising strategy. They have worked with their vendors to secure unique products and exclusive product offerings such as multi packs and specialized sizes. Their goal is to increase each transaction size and create constant traffic with a regular turnover of new and interesting product offerings.

Packaging is one of the most important factors in a warehouse club program. Each Club store has their specific merchandising strategy and the packaging is reflective of this.  The main drivers behind the packaging that are common amongst the Club stores are;

  • Shopper flexibility
  • Speed to shelf
  • Lowest cost
  • Sustainability
  • Low in-store Labor cost
  • Structurally sound
  • Impactful Graphics
  • Structural Strength to travel through Distribution Channel.

Each Club store has designed their specific packaging specifications that are outlined for their vendors to follow to create their own custom and identified brand look that is easily recognizable to their membership. The most popular display in the Club store is the pallet display usually designed on a 40” x 48” pallet. Product is stacked on trays with dividers, partitions or supports stacked to the maximum allowable height. This type of display can be designed so that shoppers can shop from all four sides allowing great flexibility, referred to as the 360 or 4 way shop. The pallet display is usually put in place, unwrapped and ready to shop which facilitates the speed to shelf and reduces the in store labor costs of extra handling. Most packaging designers are being challenged to use less and less packaging material both from a sustainability footprint perspective as well as reducing material and in store labor costs.

The packaging is not successful unless it can deliver the product safely through the distribution channel. Innovative structural designs can allow for light weighting the packaging material without compromising the structural strength. This compounded with impactful packaging graphics that are most reliant on the secondary and tertiary packaging relays effective messaging to the shopper from up to 30 feet away. By utilizing the pallet display format the club stores reduce the cost of space, transport and restocking.

The high impact multi color graphic packaging has evolved over the last decade from the humble brown box and trays that started out in Club stores. This is the result of the close relationship between the retailer, the CPG and the packaging provider.

The Club stores continue to flourish as the economy continues to perform slowly and loyal shopper members look for savings.

 

Fast Facts

  • Costco was founded in 1983 in Kirkland, Washington and therefore named their private label product line Kirkland.
  • Sam’s Clubs are owned by Wal-Mart and named after founder Sam Walton.
  • Wal-MartCanada announced the closing of their 6 Sam’s Club stores in Canada in 2009.
  • BJ’s Warehouse Clubs are located on the U.S.A. East coast and Ohio. They are one of the three largest Club store Groups beside Costco and Sam’s.

 

Interesting links

 www.cbc.ca/ageofpersuasion – Episode – Brand Loyalty
Stay connected following Moore Packaging on twitter @Moore_Packaging

 

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