Warehouse clubs carry two fundamentally different types of merchandise, and each creates its own visibility challenge.

The first is what the industry calls must-haves: the core staple items that drive trip frequency and form the backbone of member value. Kirkland Signature at Costco, Member's Mark at Sam's Club, and Berkley & Jensen at BJ's are not afterthoughts. Private label represents roughly 25 to 30% of merchandise sales at each club and is a primary reason members renew. When a must-have is out of stock, members do not substitute. They remember, and they factor it into the renewal decision.

The second product type is what Costco famously calls the treasure hunt: rotating, limited-time, often premium merchandise that creates a sense of discovery and urgency. These items contribute disproportionately to gross margin and are what members tell their friends about. They are why people walk in for paper towels and leave with a $400 appliance.

Both categories share the same execution vulnerability: the gap between what the inventory system reports as available and what a member or picker can actually access on the floor at any given moment.

"The treasure hunt only works if the treasure is actually there when the member shows up."

In conventional grocery retail, the inventory execution failure is well-documented. IHL Group's now eighteenth year of longitudinal research on inventory distortion has consistently found that the largest single category of preventable out-of-stocks is product in the building that never reaches the shelf. Merchandise receives into the backroom and stalls. The customer sees an empty position, assumes the item is gone, and leaves without buying it.

Warehouse clubs share this problem, but its physical form is different. There is often no separate backroom at all. The "backroom" in a club is the space below the floor-level display tables, behind the pallet stacks, in the overstock bays above the primary display positions, and under the very merchandise a member is already standing in front of. A full pallet of special-buy merchandise may be sitting directly beneath an empty display, invisible to anyone who does not physically inspect every position in the aisle.

Shrink compounds the challenge. Product that has been moved, sampled, opened, or misplaced creates phantom inventory counts that are as damaging as a genuine out-of-stock. The club format's deliberately lean floor staffing model, a structural advantage that enables competitive pricing, means these conditions often go undetected for hours. Automation matters as much in a club as it does in any other retail format. The floor does not staff itself, and the gap between what the system believes and what a member can actually buy does not close on its own.

Sam's Club now offers curbside pickup at all 600 of its U.S. clubs and has been actively building out its Ship-from-Club service, in which associates fulfill online orders directly from store inventory. Scan & Go, the app-based self-checkout tool, has achieved a net promoter score above 90 and is used by three-quarters of Sam's Club members. Costco has accelerated its own digital capabilities, with 22.6% digital sales growth in its most recent quarter. BJ's has invested similarly in digital fulfillment infrastructure across its East Coast footprint.

Every one of those digital investments depends on floor-level inventory accuracy. When a member places a curbside order, she has made an explicit purchase decision. A picker who cannot locate the merchandise, or cannot determine whether additional units are buried below a display table, either substitutes an item the member did not choose or spends time searching that costs the entire operation. Research on in-store order picking consistently finds that picking accounts for 50 to 55% of total fulfillment operating costs. In a club environment where the member has paid for access, the tolerance for fulfillment error is compressed further still.

Many club operators have explored RFID as a solution to inventory accuracy challenges, and the technology delivers genuine value at the case and pallet level. Item-level RFID, where deployed, has raised inventory accuracy from the 60 to 65% range to 95 to 99% in documented retail deployments.

But RFID with a handheld data capture has a known limitation that is rarely discussed plainly in the club context: it tells you what is in the store, not where it is positioned at any given moment. RFID can confirm that 12 units of a special-buy appliance are somewhere in the club. It cannot confirm whether those 12 units are on the floor display, stacked below the display table, staged in an overstock bay, or sitting on a receiving cart that has not yet been moved. That distinction matters enormously for both member experience and fulfillment accuracy.

The question is not whether the merchandise is in the building. The question is whether a member can buy it today. That is precisely what autonomous in-store scanning delivers.

"RFID tells you the merchandise is in the club. Autonomous scanning tells you whether it is on the floor and accessible for a member to buy."

Badger Technologies' Digital Teammate traverses club aisles multiple times per day, capturing continuous floor-level data on product availability, pricing accuracy, and display compliance. In a warehouse club environment, this capability addresses the specific execution challenges of the format in ways that neither manual processes nor fixed RFID infrastructure can replicate.

For must-have and private-label merchandise, autonomous scanning confirms that items are on the floor before a planned member trip is disrupted. Associates receive prioritized restocking tasks based on real-time floor conditions, not scheduled cycle counts that may be hours away.

For special buys and treasure hunt merchandise, the scanning capability adds a layer of visibility unique to the club format: the ability to distinguish between what is on display and what is available below the table or in adjacent positions. Combined with RFID sensing, Badger Technologies' system can identify whether additional inventory is accessible at floor level or staged in a position that requires associate action before it becomes purchasable. This closes the gap between system inventory and member-accessible inventory.

For curbside and delivery fulfillment, the benefit is direct and documented. Retailers working with Badger Technologies have documented reductions in out-of-stocks in the range of 40 to 50%, pricing error rates declining by up to 97%, and 70 to 80 labor hours per week per store redirected from manual counting toward customer-facing activity. These results come from active deployments across multiple banners and geographies. They are not pilot-stage projections. They are what happens when autonomous visibility does the work that lean staffing models never could.

Detection without verification is half a solution. Badger Technologies' system does not only identify gaps and generate tasks. It rescans after associate action to confirm the issue was actually resolved.

In conventional retail, task management systems frequently suffer from a verification gap: a task is generated, an associate marks it complete, and the system accepts the resolution. In practice, the associate may have partially addressed the issue or addressed it in a way that creates a new gap elsewhere. The system has no way to know, and the floor condition remains inaccurate.

In a club environment, this is particularly consequential. A restocking task completed by placing merchandise in an overstock bay rather than the floor display position still leaves the member-facing location empty. Autonomous rescanning eliminates that gap and gives operators something they have rarely had: confidence that what the system says is happening on the floor is actually happening.

Warehouse clubs are, at their structural core, subscription businesses. Membership fee revenue is the primary profit driver: merchandise margins generally cover operating costs, while membership fees flow largely to the bottom line. Costco's membership fee revenue exceeded $1.36 billion in a single quarter in early 2026, with renewal rates at 92.3%. Industry analysts project that figure will exceed $5 billion for full-year 2025 and could reach $10 billion or more by the mid-2030s.

The membership model creates a virtuous cycle when execution meets expectations and a corrosive one when it does not. A member who consistently finds what she came for, discovers new special buys that deliver genuine value, and receives her curbside order accurately renews automatically. A member who encounters empty displays, missed treasure hunt items, or substituted curbside orders begins calculating whether the fee is worth paying.

The industry's renewal rates, above 90% at Costco and growing at Sam's Club and BJ's, are the product of decades of execution discipline. They are not guaranteed. Each membership is re-earned annually, and each store visit is a data point in that evaluation.

The pattern I described in my previous articles on grocery and apparel automation applies with equal force in the club channel. Early adopters of autonomous in-store intelligence do not just solve today's execution problems. They build institutional capabilities that compound over time. Associates learn to act on real-time floor intelligence rather than scheduled audits. Fulfillment workflows become calibrated to accurate inventory positions. Buyers and category managers receive better sell-through signals because floor data reflects actual member-accessible availability, not system-level counts that include merchandise staged in inaccessible positions.

A club that deploys autonomous scanning today is building the data infrastructure and operational habits that will define its competitive position in three to five years, when the performance gap between clubs with continuous floor intelligence and those without it becomes visible in renewal rates, member satisfaction scores, and e-commerce fulfillment metrics.

Mike Graen is Principal of Collaboration LLC and Advisory Board Member for Badger Technologies. With more than four decades of experience at Procter & Gamble, Walmart, and CROSSMARK, Mike has made a career out of using technology to solve retail business problems. As P&G's Director of Information Technology for the Walmart account, he helped develop what would become Retail Link. He later led Walmart's RFID and on-shelf availability programs as Director of Innovations for Supplier Collaboration. He hosts the Supply Chain LEAD Podcast and the Conversations On Retail platform.

Badger Technologies, a product division of Jabil, is a leader in retail automation and artificial intelligence solutions. Its autonomous robots and digital teammates help retailers improve on-shelf availability, pricing accuracy, planogram compliance, and store safety.

With deployments across grocery, building supply, and other high-SKU retail environments, Badger Technologies provides retailers with real-time data and actionable insights that drive measurable results. Headquartered in Nicholasville, Kentucky, the company is committed to helping retailers build smarter, safer, and more efficient stores.