Inside the Digital Shift of Wholesale Clubs

The warehouse treasure hunt didn’t disappear—it went digital. We unpack how Costco, Sam’s Club, and BJ’s are extending the classic club model with omnichannel tools that make membership more valuable, suppliers more effective, and shopping far more flexible than a weekend stock-up run. From the rise of organics and stronger private labels to curbside, scan-and-go, and price parity, we show where convenience meets trust and why it’s winning.

We dig into the numbers and the moves shaping this shift: organics climbing from a niche to a meaningful share of the mix, Sam’s Club pushing 40+% member adoption on Scan & Go and leaning into price parity, BJ’s testing curbside and same-day to widen access, and Costco threading the needle with Instacart while growing .com sales faster than physical clubs. On the media side, personalization gets real as Costco partners with GrowthLoop to help brands reach millions of households using privacy-safe, first-party club data tied to fulfillment paths—pickup, local delivery, or ship-to-home—so relevant products surface when intent is highest.

If you’re a supplier, the playbook is evolving: design packs that work on pallets and in parcels, invest in retail media that targets member signals, and keep item pages, inventory, and replenishment tight to capture demand spikes without stockouts. If you’re a member, the value promise is clearer than ever—searchable discovery, reliable pricing, and flexible fulfillment that keeps the thrill of the hunt intact while saving time. Subscribe for more retail strategy breakdowns, share this with a fellow operator or brand partner, and leave a review with the biggest surprise you heard today.

Episode Transcript

SPEAKER_00 (00:08):
Well, hello everyone, and welcome to Scott's
Thoughts.
I'm Scott Benedict.
You know, today I want to talk alittle bit about the U.S.
wholesale club industry.
So Costco, Sam's Club, and BJ'swholesale, and how these
retailer formats are embracingOmnichannel when, in fact, their
business has been built on theconcept of big packs, large or

(00:33):
sharp prices, and treasure hunt,or how always having new and
exciting deals.
Now, the story about how digitalintegration, retail media, and
the blending of online andoffline experiences in these
channels, where I actually spentthe majority of my retail
career, is becoming reallycompelling and exciting in a

(00:57):
number of different ways.
First of all, is the role thatorganics play in the strategy of
all three major wholesale cluboperators.
One of the ways to see this isin the shift of their organic
assortments.
Back in 2014, about 4% of thewholesale club channel's food

(01:19):
mix was in organics.
Today it's closer to 7% overall,and Costco is actually leading
the pack there, with about 13%of their assortment represented
in organics.
Now, beyond the healthier uhoptions, organics tend to drive
higher basket rings, create abit of buy it now urgency, and

(01:43):
even be through the privatebrands that each of the club
operators uh uh focus on.
Kirkland Signature, our membersmark are two great examples.
Here's the the kind of theomnichannel uh link is that
these products in this categoryof goods are not just being
presented on pallets in clubs,they're also searchable online,

(02:05):
they're featured in digital ads,and they're available for
curbside delivery or ship tohome.
So omnichannel is starting toplay a role in that part of
their business.
Now, digital integration is alsoreally coming to the fore uh in
the wholesale club industry.
And here I'm proud to say Sam'sClub is is kind of leaning in

(02:26):
the hardest, having worked therefor a number of years.
40% of Sam's Club members, theysaid in a recent report, use
their scan and go uh capabilityfrom their app.
And they're committed also toprice parity in club and online.
And that's kind of rare inretail overall, not just in the

(02:47):
wholesale club channel.
They've also redesigned thespace in some of their newer
club locations to provide morespace for e-commerce
fulfillment, whether that's uhpickup orders or uh local
delivery as well.
BGA's uh wholesale isexperimenting with more curbside
and same-day delivery, whileCostco is expanding their

(03:12):
partnership with Instacart andis operating closer to having
price parity between uh whathappens in clubs and what
happens online.
And all three are proving thatdigital convenience can enhance,
not replace, their physical clublocation and that shopping
experience.
It probably won't shock you thatretail media and personalization

(03:35):
are also emerging elements ofthe wholesale club model.
Costco has just partnered with acompany called Growth Loop to
expand personalized digitaladvertising so that the products
that their members offer are areoffered are more focused on what
they've demonstrated theirinterest to be.

(03:55):
That means that Costco'ssuppliers can reach millions of
households based on club datathat ties to direct fulfillment,
whether that product isavailable in a club or through
other online fulfillmentoptions.
So that's kind of been a neatthing to see.
Also, scale and expansion of theof the format has also been an

(04:18):
interesting topic to see theclubs as a channel are really
growing.
In their most uh recent earningsreport, Costco reported nearly
$270 billion in sales this lastfiscal year, with about 19
billion of that coming fromCostco.com, or roughly about 7%

(04:39):
of their mix, but growing at amuch faster rate than their
physical location sales are.
They'll open up 35 new clublocations uh this next year in
2026, bringing them close to athousand locations worldwide.
Sam's Club has said publiclythat they have 30 new clubs in
their development pipeline, andthey're targeting 40% of their

(05:03):
sales to come from e-commerceover time.
BJ's, while smaller, issharpening the edge on fresh
categories and leaning intoprivate labels as well as
working to promote their brandsand their products both online
and through digital channels.
So the bottom line to all ofthis is that wholesale clubs are

(05:26):
proving that OmniChannel is notabout abandoning their physical
warehouse locations.
It's really about extending it.
They're using digital tools toamplify the value of their
memberships.
They're deepening their supplierpartnerships and offering
suppliers more ways to drivesales with them.

(05:47):
And they're starting to blur thelines a little bit between their
physical locations and the appsin what feels like a very
positive way.
For suppliers who sell into thewholesale club channel, it means
the playbook has changed alittle bit.
If your club strategy doesn'taccount for digital
personalization, for offeringmore fulfillment options, and

(06:08):
that of retail media in the clubchannel isn't part of your
strategy, you may be falling alittle bit behind.
So that's what I've beenthinking about recently.
I'm Scott Benedict.