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Technology in Retail: How Costco’s Competitors Are Closing the Gap

For years, Costco has long been a leader in the warehouse club sector, providing its members with great deals on bulk purchases. However, rivals like BJ’s Wholesale Club and Sam’s Club are now challenging Costco’s position by leveraging the latest technologies to improve the customer experience and streamline operations.

In this article, we will delve into how these retailers are using technology to close the gap with Costco and what this means for the future of the retail industry.


Warehouse Club

A Warehouse club is a retail establishment that sell products in bulk quantities to their members. Typically requires a membership fee in order to access their stores and purchase their products. The primary appeal of warehouse clubs is the ability to buy large quantities of goods at discounted prices. These stores usually offer a wide variety of products for sale, including groceries, electronics, clothing, and household items

Overall, the warehouse club business model has proven to be highly successful, as customers are drawn to the discounts and other benefits provided by membership. However, with the rise of e-commerce and changing consumer preferences, warehouse clubs are increasingly turning to technology to stay ahead of the game.



The Success of Costco

Costco is a retail giant that has experienced incredible success over the years, with net sales of $222.7 billion in 2022. The company boasts a massive global membership base of over 123 million members who appreciate the value proposition offered by Costco’s business model. In fact, Costco has an impressive membership renewal rate of 93% in the United States and Canada, and 90% worldwide, a testament to the loyalty of its customer base.

These statistics highlight just how successful Costco has been at building a loyal customer base and delivering high-quality products at low prices. And, while Costco has enjoyed great success due to its focus on the warehouse and bulk purchasing, the company has fallen behind when it comes to technology investments in comparison to its competitors.

For example, both Sam’s Club and BJ’ wholesale have the “Scan & Go” feature on their app, allowing customers to scan their purchases as they shop, then checkout and show their receipt on their phone as they leave the store. This can help to avoid long checkout lines and make the shopping experience faster and smoother.

In contrast, Costco has yet to introduce a similar feature, despite other retailers adopting similar technologies.



What Sam’s Club Is Doing: Innovating with Technology to Stay Ahead of the Game

Sam’s Club is not shy about testing new technology. In fact, the company has made significant investments in automation and robotics to improve its operations and customer experience.

One of the ways Sam’s Club has incorporated technology into its operations is through the use of robot floor scrubbers. While this might not seem like a big deal at first, it can actually make more of an impact than you might think. The more jobs like this that can be automated, the more time staff members can devote time to take care of more member-focused activities, like assisting customers with their purchases. By using automation in this way, Sam’s Club is creating a better experience for its customers while also improving efficiency in its stores.

Building on the success of the scrubbers, Sam’s Club has taken its automation efforts to the next level adding a new purpose to these robots with its new inventory-scan towers. These towers are cloud-connected and capture data as they move autonomously around the club. This provides real-time inventory information to the club, allowing associates to better inform decision-making, run their clubs more efficiently, improve their warehouse processes and provide a better in-club experience for their members.

With the use of Inventory Scan, Sam’s Clubs across the country have access to critical inventory data that can help them improve their operations and provide better service to their members.


Sam's club shopping cart


BJ’s Wholesale Club Is Making Significant Investment In Technology

BJ’s Wholesale Club has also been making strides in improving their operations and enhancing the member experience. One of their recent efforts has been to partner with Simbe, a company specializing in AI-powered solutions, to roll out their business intelligence tool called Tally to all club locations.

Tally is an AI-powered solution that is designed to roam the aisles of a retail store or warehouse, collecting real-time data on product inventory, pricing, and placement. Using computer vision technology, Tally is able to scan shelves and detect items that are out of stock or misplaced, as well as identify pricing errors. This data is then sent to a centralized system where it can be analyzed to provide insights into warehouse processes, inventory levels, product placement, and pricing trends.

By incorporating Tally into its operations, BJ’s Wholesale Club will be able to gain unprecedented visibility into the conditions of its clubs and obtain deeper insights into its business operations. This will ultimately improve operational efficiencies and enhance the member experience.

With Tally, BJ’s team members will be able to focus on providing exceptional customer service instead of spending time and money on outdated warehouse systems and stocking tasks.



Is Automation the Future of Wholesale Clubs?

In an era where speed and convenience are paramount, the ability to automate repetitive tasks like inventory tracking and cleaning can free up staff members to focus on more value-added activities like customer service.

While Costco has historically led the way in the warehouse club industry, the investments made by BJ’s and Sam’s Club in automation and AI may provide them with a competitive edge.

It will be interesting to see how these companies keep using technology, automation and AI to gain an advantage and capture a larger share of the market. As warehouse clubs look towards the future, it’s clear that those who embrace automation and AI will be best positioned to succeed.



In Conclusion

As technology continues to advance and automation becomes more prevalent, businesses must stay ahead of the curve to remain competitive. From inventory management to customer service, incorporating the latest in technology and automation can greatly improve efficiency, reduce costs, and ultimately lead to a better customer experience. Companies that fail to invest in these areas risk falling behind their competitors and missing out on the many benefits that automation and technology can offer.

For B2B businesses looking to streamline their operations, save money, increase sales, and improve customer satisfaction, incorporating advanced automation is key. Orders in Seconds (OIS)  offers a set of solutions for field sales reps, like DSD and pre-sales designed to simplify the B2B order taking and fulfillment process, from placing orders in the field from a mobile app or tablet to accepting payments, end-of-day sales reporting, to accepting payments on the spot and so much more. You can also learn more about Setting Prices for Wholesale Distributors in our Blog.

With OIS and their DSD mobile solutions, businesses can save time, reduce costs, and provide a seamless customer experience. Schedule a FREE demo today to learn more and start streamlining your B2B operations today.