Sometimes what you see is what you get, and when it comes to shopping for women’s apparel in the warehouse clubs, this phrase could be the key to success.
Though the merchandise frequently consists of brand name apparel piled high without a dressing room, attractive sign or display unit in sight, it is all part of the shopping experience at members-only warehouse clubs. Customers expect it, and industry experts believe this approach works for the warehouse clubs.
One question, however, is whether it makes sense for clubs, with their bare-bones selling floors, to be in a category like women’s apparel and accessories, which typically require a little bit of ambience and attention.
Britt Beemer, founder of Charleston, S.C.-based marketing firm America’s Research Group, said he believes “consumers who go to warehouse clubs want a deal, and as long as they get one, it certainly makes sense. The one thing to be careful about is that besides having a price-driven customer, they’ve also got a value-driven customer. A lot of people go there to buy famous brands at low prices, so if you are going to be selling women’s apparel, depending on what product categories you go after, make sure you have a very strong, quality product — and it’s got to be current fashions.”
Richard Hastings, senior retail analyst at Bernard Sands, agrees that the clubs are attractive to members because they are competitive on brand and price and while they do “impact department stores and moderate fashion stores like J.C. Penney’s, Sears and Kohl’s, the wholesale clubs do not offer a complete fashion solution. They are impossible to beat on price for the items they carry.”
A few brands that are frequently available at Sam’s Club include Jones, Anne Klein, Chaus, Champion, Speedo, Carole Hochman, Oscar de la Renta sleepwear, Nikki by Nicole Miller underwear and sleepwear and Esprit lounge wear. And while one assumption might be that apparel sold at the clubs (Sam’s, Costco and BJ’s) might not be top quality or style, Ronnie Robinson, divisional merchandise manager at Sam’s Club, said her company does not sell “end-of-run” or overrun product, and only offers members nationally branded merchandise.
Another aspect of shopping in warehouse clubs is that the same merchandise is not always available — which can be attractive to some consumers and aggravating to others. But as Robinson said, “Consistently offering nationally recognized brands at a value, along with other ‘treasure hunt’ items, keeps members wondering what they’ll find on their next trip.”
Beemer concurred. “I don’t think the consumer would care [that they might not find the same merchandise every time] as long as it’s a good deal. I don’t think [warehouse clubs] should go into any seconds or irregulars. Let the outlet centers deal with all that. But they should be selling first-quality merchandise.”
Michael Clayman, who publishes Warehouse Club Focus, said “high-end branded manufacturers appearing in the assortment” could help grow the women’s apparel business in the wholesale stores.
Though the warehouse clubs do not break out sales data on apparel, Warehouse Club Focus has compiled data based on sku counts, calendar year merchandise sales and industry research. It is estimated that apparel sales worldwide for the warehouse clubs in 2004 totaled about $1.78 billion, which accounted for 1.8 percent of sales. Costco was the largest player with apparel making up 1.9 percent of its sales, or $943 million; Sam’s Club did $704 million, or 1.6 percent, and BJ’s garnered $137 million, which represented 1.9 percent in apparel sales.
As for the women’s wear business and its potential in warehouse clubs, Beemer pointed out that though “the stores have a lot of husbands and wives shopping together, their shopper base is probably 74 to 76 percent female. That means that three of every four people who walk through the front door are women or women shopping with their spouses or children. I think that gives you a lot of exposure to a lot of females.”
The shopping habits survey commissioned by WWD found that 61 percent of respondents are members, and that slightly more than half — 51 percent — said they have purchased apparel or accessories in these clubs.
The experts’ consensus seems to be that warehouse clubs can do well with apparel but should stick to offering certain items. Beemer noted that as long as the clubs “do not begin selling evening gowns” they are on the right track. This seems to be the case and according to the survey, only 9 percent of women said they shop in warehouse clubs for clothes for work, with just 2 percent purchasing dresses and suits. Hastings added, “Apparel, the way it is done in wholesale clubs, works for this type of customer in this type of environment. The brand-to-price equation is absolutely unbeatable. Just don’t expect complete fashion solutions with deep sku’s. Ain’t gonna happen in this retail format.”
In order to grow the women’s apparel business, observers agreed that better displays and signage could help. “Too often with apparel, if there isn’t somebody there [almost] all the time, a display can get pretty messy, very quickly,” observed Beemer. “They’ve got to keep the display looking nice and organized so the woman who wants to make a decision can buy it, easily find her size and move on.”
Clayman noted that “in terms of competing and potential, the club channel continues to grow annually — average annual growth of 11.1 percent worldwide from calendar 2000 to calendar 2004 — so if you are any type of manufacturer, why wouldn’t you want to be involved?”
What type of apparel/accessories have you bought at a warehouse club?