12 Issues That Could Impact The Clubs

Executive Summary

Warehouse club stores have enjoyed years of revenue growth, and clubs continue to post solid results despite flattish US retail sales. With the breakneck pace at which many technologies are evolving in the mobile and e-commerce worlds, we examine new opportunities — as well as potential risks — that could either curtail the current health of the industry or elevate it to the next level. In this report, we examine several major themes, the risks and opportunities as they apply to warehouse club stores, including:

• Sourcing and production: Domestic production, direct imports and onshoring versus nearshoring.
• Product identification: RFID tags and holograms.
• Supplier traceability: The genuineness of goods, the gray market and market for diverted goods.
• Pharmacies: Favorable long-term trends include an aging population and a strong drug pipeline.
• Private Label: Exclusives driving traffic and profit growth.
• Amazon and Jet.com: How does Amazon affect warehouse clubs, and what is Jet.com’s business model?
• Margins: What is the structure of and changes to margins?
• Mobile commerce: What can warehouse clubs do to enhance the mobile user experience in store?
• E-commerce in China: What is happening in China’s e-commerce, and what can be transplanted to the US?
• Robotics: What is the state of the robotics industry and what are other retailers doing with the technology?