Club stores require people to pay annual membership fees, so they cater to a different market than big-box retailers. The people who agree to pay those fees quickly learn there are a few key differences to notice while shopping. For example, the club store packaging is often different because these outlets sell products in bulk. Pallets are also fixtures of the store layout. What role do they play in club store optimization?

Showcasing Products in Club Store Packaging

Many club store members realize their fees quickly pay off. They save so much money by purchasing staple products in much larger quantities than other retailers typically offer. Joan Driggs is the vice president of thought leadership at Information Resources Inc. She believes curation is another reason why members appreciate club stores.

She explained club stores don’t stock products for long unless they sell well. That approach ties into the curation customers expect when shopping there. Driggs also noted that — although she doesn’t have data to support it — she believes products with long shelf lives sell robustly in club stores.

Since people are already accustomed to shopping in bulk at club stores, it makes sense they’d prioritize buying things that’ll remain in date for several months or years. Whether displaying bags of coffee, cartons of soda or family-sized jars of nuts, pallets work well for helping club stores attract interest in the products.

The best designs for club store packages allow customers to quickly choose the number of desired items from pallets without requiring assistance. That’s why many display boxes built for club stores feature cutout sections or easy-to-carry dimensions.

Shoppers who want the largest quantities of palletized goods may grab full display boxes and put them directly into their carts. In other instances, display boxes designed for pallets have removable sections. Taking those panels off mimics the look of shelved products without requiring people to take time to stock — or even use — shelves.

Moving Products Directly From Trucks to the Sales Floor

Most club stores operate much differently than other retailers due to how they handle incoming products. The most common approach at non-club stores is to move products from trucks to storerooms and then to the sales floor. However, that approach requires significant labor because the goods come off the trucks on pallets, and then people shift them from the pallets to shelves.

Club store employees typically put products on the sales floor without removing them from pallets. This system results in a no-touch supply chain that results in the items reaching customers much faster and with fewer labor requirements. That’s why club stores typically enforce highly specific requirements for any current or potential brands selling products through these outlets.

One common rule is that goods sold in club stores must reach those outlets on 48 x 40 Commonwealth Handling Equipment Pool (CHEP) pallets. Additionally, the club store packaging must be structurally sound enough to stay intact during transit and in-store display. This rule keeps customers and employees safe and prevents suppliers from incurring chargebacks due to unsuitability.

Pallets support club store optimization by allowing employees to bring products to customer-facing areas immediately after unloading them from trucks. That enhanced efficiency also allows the stores to keep prices lower, offering the excellent value shoppers expect.

Stimulating Impulse Purchases Through Club Store Optimization

When warehouse managers optimize workspaces, they remain aware of traffic flow patterns, ensuring pallets or other items do not restrict vehicular or pedestrian movement. Club store leaders do something similar, but their main goal is to entice shoppers and make them buy more than planned.

Costco does not have signs to help people navigate to different product sections. Similarly, you won’t find a store directory. The lack is an intentional sales practice. Leaders want customers to linger and wander around the store. People who visit club stores frequently may find the items they typically purchase are never in the same place every time.

The club store optimization process of keeping products on pallets supports moving products to different locations. Employees can use forklifts to bring pallet-stored goods to other store areas within minutes.

Although the club store layout and specific item locations may seem random to the average visitor, employees do follow a reasonable process when determining where to place merchandise on the sales floor.

For example, Costco workers refer to the central part of the store as “the racetrack.” Following it takes shoppers to all major sections. The frozen foods never move and they’re always strategically located at the back of the store. The hope is that the greater exposure to more palletized products will lead to larger transaction sizes during each visit.

Supporting Technological Advancements

Many club store packaging decisions enable these retail outlets to stay competitive as leaders continually invest in new technologies. Some plastic pallets have built-in radio frequency identification codes, making it easier to track individual locations.

Sam’s Club also provides an excellent example of club store optimization through automation. The brand will add 160,000 square feet of distribution center space within its new stores. Additionally, it opened several dedicated distribution and fulfillment centers in 2023. Those facilities feature robots and other automated technologies. Many robots can work with full or empty pallets, making the club store packaging strategy ideal for automation plans.

In 2022, Sam’s Club announced a nationwide rollout of automated inventory-tracking robots across its chain. Leaders opted for a multipurpose approach, attaching the inventory scanners to 600 floor-scrubbing robots. Decision-makers anticipated this new inventory management approach would keep products easily accessible for customers while giving employees valuable data about stock levels, product availability and pricing accuracy.

Most robots do best with repetitive tasks. Although many can recognize minor or real-time changes in an environment, these machines are often more efficient in familiar settings. Maintaining the club store packaging method of displaying goods on pallets within warehouse stores brings the consistency that enables automated scanners and other self-moving technologies to gather dependable data.

A 2022 robotics investment involved BJ’s Wholesale Club leaders taking a similar approach by deploying self-scanning robots in nearly 250 locations. Representatives from the chosen technology vendor worked with BJ’s employees before the rollout, studying club store optimization specifics so the robots would work effectively in each location.

Pallets Help Club Stores Succeed

As many customers struggle with rising living costs, they appreciate the need club stores fill by offering bulk items at appealing prices. Although many shoppers probably don’t realize the vital role pallets play in keeping the retailers’ costs down and supporting their business model, these structures facilitate the easy moving and display of items in massive warehouse environments.

Emily Newton is the Editor-in-Chief of Revolutionized. She regularly covers trends in the industrial sector.