Packaging – The Difference Between Success and Failure In The Club Store Channel

The three dominant club store players in the U.S. are Costco, Sam’s Club, and BJ’s. This channel’s distribution chain and warehouse merchandising environment have unique elements that directly affect the packaging design and resulting product sell through.  These elements include: 1) Wide aisles and open space; 2) low and inconsistent lighting; and 3) minimal sales associates.  To effectively address these challenges, and stack the odds in favour of a successful venture in the club store channel, it is important to consider the following best practices:

Retail-ready.  Stackable retail-ready pallet displays is the primary merchandising vehicle at club stores.  To begin, durability and stability need to be addressed.  After pallet displays depart the packaging facility, they are handled numerous times by various trucking and warehouse personnel.  Selling unit, secondary, and transport packaging need to be carefully designed to ensure the display withstands the rigors of the club channel distribution chain, including handling of the product package by the club member while in the store.  Consideration should be given to structural design, board strengths, board flutes, plastic gauge, and sealing processes, among other factors.   Further, pallet displays must be designed to minimize in-store handling.  When the pallet enters the club’s receiving area it should require minimal unpacking.  Once unpacked the pallet must be ready to be rolled out to the sales floor and be shopped. 

Multi-side shoppable. Retail-ready pallet displays may be placed in a variety of open space areas on the club floor, including under the steel or on an end cap.  To ensure the pallet is properly displayed to the shopper, pallet design configurations should work and communicate clearly when the packages are stacked on pallets, from at least three sides.

Billboard advertising.  Club store packaging should be designed like billboard advertising, which visually communicates within just a few seconds from at least five feet away.  The graphic design of the selling unit and secondary packaging (e.g., trays and skirts) should be considered when designing the “billboard.”  Included in this advertising strategy is a technique commonly used in grocery stores whereby two or more package facings create a larger design when the packages are either on top of each other or side-by-side.

Distinctive imagery.  Take full advantage of a brand’s equity by including large product and/or logo images on the pallet display graphics.  Package designs should lead with this distinctive imagery.

Color blocking.  The common technique of color blocking is particularly effective in the open space environment of club stores.  Essentially, when products are stacked on the pallet a solid bold and bright color will stand out to capture the shopper’s attention.  This is accomplished with the background color(s) of the selling unit and secondary packaging, as well as creating a simple design to eliminate distractions.

Eye-appeal.  Create high-impact graphics using vibrant and highly saturated colors to capture the interest of the club store shopper. The package messaging should be simple so as to communicate the core essence of the product without sacrificing key brand elements.  Value and product experience should also be reflected in the graphic design.

Theft-resistance.  Asset protection is a constant concern for club store operators.  The large space, limited personnel, and lack of security measures make high valuable items susceptible to theft.  Packages must be sealed in a manner that reduces shrink, but balances the shoppers post purchase experience.

With continuous annual growth and combined sales of nearly $148 billion, club stores offer a strategic, but highly competitive sales channel for consumer product companies. Brand owners given the opportunity to sell their product at the club store must ensure they put their best foot forward.  Well-designed club store packaging tilts the scale towards success.