Is Sam’s reimagining the future of warehouse clubs?

Discussion
Photo: Sam's Club
Oct 30, 2018

The headline of the latest blog post from Jamie Iannone, CEO of SamsClub.com and executive vice president membership and technology, claims that the chain’s latest store concept is “reimagining the future of retail.” While that may or may not prove to be hyperbole, there’s no doubt that the new Sam’s is, at the very least, different than the rest of the chain’s warehouse clubs.

The new concept — Sam’s Club Now — has been described by the retailer as “more lab than club” where the “latest innovations and shopping technology are being tested and implemented.”

The shopping experience is built around the Sam’s Club Now mobile app, which gives customers access to smart shopping lists, store maps, augmented reality tech to provide information on products and make shopping more entertaining, one-hour club pickup, and the ability to pay without having to stop at a checkout. The cashier-free checkout feature within the app is similar to parent company Walmart’s Scan and Go app.

The store, which was first announced in June, measures 32,000-square-feet, much smaller than the 100,000 to 150,000-square-foot clubs typical of Sam’s. The product selection is focused on fresh foods, groceries and grab-and-go meals.

Is Sam’s reimagining the future of warehouse clubs?
Photo: Sam’s Club

As to the store’s role as a laboratory — Sam’s does not plan to open any others — Mr. Iannone said that testing is not singularly focused on technology.

“Our associates are key to bringing this experience to life, which is why we’re introducing a new role called the member host,” he writes. “Think of these associates as the concierge of the club. We’ll empower them with new technology that will allow them to serve members better and faster.”

Is Sam’s reimagining the future of warehouse clubs?
Photo: Sam’s Club

DISCUSSION QUESTIONS: What do you think Sam’s should be looking to learn from its new Sam’s Club Now in Dallas? How do you see Costco, BJ’s Wholesale or other competitors reacting to this?

Please practice The RetailWire Golden Rule when submitting your comments.
Braintrust
"Subscription services and home delivery are beginning to marginalize warehouse clubs. They are a prime candidate for disruption."
"We should all be a little skeptical whenever a retailer announces that they are “changing the future of retail.”"
"What I find most encouraging about seeing stories like this is that they are no longer “ground breaking”... "

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10 Comments on "Is Sam’s reimagining the future of warehouse clubs?"


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Mark Ryski
BrainTrust

Ultimately, the Sam’s leadership team wants to understand if the new service features and experience in the test store deliver a better shopping experience. Did shoppers buy more? Was it a better, more seamless shopping experience? Did shoppers like it? Can the most desired features be applied in other Sam’s locations? It seems that technology and new services tend to evolve more slowly in the wholesale club category, so it’s interesting to see Sam’s launching the Dallas store using the highly experimental test-and-learn approach that is becoming a hallmark of Walmart.

Bob Amster
BrainTrust

Sam’s is experimenting. The different format is a trial balloon. Sam’s can test the optimization of space by identifying the product assortment that creates the most profitability per linear and square foot. It will experiment with technology and it will try to measure acceptance by consumers of a more limited assortment and more technology. While Sam’s claims that it does not plan to open more of these stores, it most likely will open and expand the successor model that embodies all lessons learned in this laboratory.

David Weinand
BrainTrust

What I find most encouraging about seeing stories like this is that they are no longer “ground breaking” — which means that there are a lot of legacy retailers that are making concerted efforts to adapt their models, leverage new technologies and redefine their associates’ roles. To quote Austin Powers: “Yay capitalism.” Walmart has continued to push the envelope so I will assume that Sam’s will take the most successful aspects of the “lab” and roll them out across the chain. Costco is certainly no slouch and they have never been a follower so while they will be watching, they will undergo initiatives that they feel are right for their chain.

Neil Saunders
BrainTrust

I don’t actually see this as an experiment just for wholesale clubs: this is an experiment that will provide learnings for all of Walmart. The reason the Sam’s format was chosen is because it is a more controlled environment where customers need to be members.

I know the article mentions Walmart Scan and Go, but this was abandoned earlier this year due to low customer take-up. One of the things Walmart will be looking to do is understand how customers use technology, how this can add value to the shopping experience, and the ways in which it can be used to streamline operations.

Chris Petersen, PhD.
Guest

The horse you rode in on will not win the retail race of the future. With all the innovation from the national grocery chains and Amazon, Sam’s must reinvent its customer experience. Subscription services and home delivery are beginning to marginalize warehouse clubs. They are a prime candidate for disruption. So it’s great to see Sam’s lab in Dallas, and the specific focus on customer experience. The “little things” like lists, navigation, one-hour pickup and grab and go add up to create value through convenience and time saving. The biggest thing that Sam’s should learn from Dallas is the “power of people” and how to optimize the member hosts.

Ananda Chakravarty
BrainTrust

This is a great opportunity for Sam’s Club to go deeper into understanding their customer and customer needs. Competing against Costco and BJs is a challenge with similar models. Sam’s Club now has the opportunity to validate customer preferences, understand new ways of associate-customer engagement, and establish the value of technology in various parts of its operations. Good move on its part. Costco and BJs have their own methods of testing the market, for instance mobile and apps at BJs. There will be continued investment in experimentation — but this store opening won’t trigger rapid investment, or a reaction from competitors.

Carol Spieckerman
BrainTrust
Carol Spieckerman
President, Spieckerman Retail
3 years 6 months ago

Walmart is smart to peel off and create a dedicated test-and-learn lab, particularly as brick-and-mortar scale remains a Walmart strength (for now). Sam’s customers are more open to experimentation so launching under that banner makes sense. The trick will be to quickly deconstruct and deploy what works across Walmart’s growing platform and portfolio. Walmart is poised to define the next generation of brick-and-mortar innovation and Sam’s Club Now marks an important next step.

Ricardo Belmar
BrainTrust
Ricardo Belmar
Retail Transformation Thought Leader, Advisor, & Strategist
3 years 6 months ago

I see this as Walmart’s answer to Amazon 4-star. It’s a great experiment to leverage the data they have on their shoppers to change how they engage in the store and deliver a product mix. The learnings from this experiment will surely influence both Sam’s Club and Walmart stores in the future.

Lee Peterson
BrainTrust

We see the future of physical retail as two things: smaller, better. And this fits the bill. What really matters in this era of new retail is that they’re trying. Trying smaller stores, scan and go, home delivery, better associates (huge IMO), different naming, on and on. Walmart has learned the most from what Amazon has taught retail and is putting it to great use. No matter what, Walmart will learn a lot, which is way more important right now that dollars per square foot.

Michael La Kier
BrainTrust

We should all be a little skeptical whenever a retailer announces that they are “changing the future of retail.” Using technology to serve the shopper and make the experience better is certainly an admirable goal, but this announcement seems like others we’ve seen and heard before. The club experience is one that has not changed for quite some time and is ripe for disruption, so best of luck!

wpDiscuz
Braintrust
"Subscription services and home delivery are beginning to marginalize warehouse clubs. They are a prime candidate for disruption."
"We should all be a little skeptical whenever a retailer announces that they are “changing the future of retail.”"
"What I find most encouraging about seeing stories like this is that they are no longer “ground breaking”... "

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