Club Store Strategies for National Brands
Nearly 9 out of 10 CPG executives expect their company’s sales in the warehouse club channel to increase during the next three years, more than any other channel.
While grocery, mass merchandisers, and supercenters accounted for the majority of CPG sales in 2011 (72.6 percent), this share reflects an erosion of 2 percentage points in three years. The warehouse club channel is a growing and profitable segment for those consumer product goods (CPG) companies that have tailored their business for club retailers. Consumer attitudes have changed, driving CPG and retail executives to take notice. As a result of warehouse members making more trips, spending more at club stores and finding these stores more appealing than just three years ago, some CPG companies have taken the pains to understand the characteristics unique to the warehouse club channel in five distinct areas:
- Successful CPG companies begin with a channel, and often retailer-specific approach to brand, product strategy, and innovation.
- They pursue unique merchandising and assortment strategies for the channel, and at the store level.
- Their pricing and trade promotion strategy acknowledges potential channel conflict by providing unique product-price value propositions across channels.
- They partner with the club retailers to tailor their supply chain, distribution, and operations to the unique channel logistics and distribution environment.
- Finally, those CPG companies serious about succeeding in the warehouse club channel build strong account and support teams with marketing, packaging, pricing, and supply chain expertise for this channel.
“The club retailers want to deal with someone who understands the club business”
– Retail executive
As the growth expectations for the Club Channel are expected to outpace other channels, will you be ready?
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