Sam’s Club learned how fast it could move during the pandemic
Sam’s Club learned some fast lessons after the novel coronavirus pandemic hit the U.S. last year. Much of that knowledge is now enabling the warehouse club chain to double-down on customer-focused steps that helped it increase its new member numbers and retain a higher percentage of existing ones during that time.
Curbside pickup was among the initiatives that Sam’s members gravitated to as social distancing and occupancy measures were put in place to reduce the spread of COVID-19. Kathryn McLay, Sam’s president and CEO, said at last week’s NRF Retail Converge conference that the chain had been “playing” with the concept at about 16 clubs before the pandemic hit.
“We decided going into the pandemic, boy, we better escalate this and we rolled it out to the nation in about seven weeks,” said Ms. McLay, who added that the option helped grow Sam’s business last year as members were able to shop in a secure and contactless manner.
Sam’s CEO also pointed to its Scan and Go technology as another contactless confidence builder for members shopping its clubs. She said her company saw “extraordinary growth” in usage of the technology that allows members to use their phones to purchase items while shopping in the club and then bypass the checkout.
Ms. McLay said Sam’s was also focused on expanding the capabilities of Scan and Go to process electronic balance transfer payments and SNAP transactions. Conducting alcohol sales through the technology is another capability that Sam’s is trying to work out.
Sam’s is committed to expanding members’ use of the technology and has reached out to those who do not use Scan and Go to determine why not. One of the main barriers was that members did not want to download another app on their phones. Sam’s team developed a “digital demo” in response whereby members could test the technology by using a QR code. “It’s all of these like little micro innovations that all build into actually creating this delightful environment where you’re growing your relationship with members,” said Ms. McLay.
“If you put profit as the primary goal, you fail. You always have to start with how am I creating value.” Ms. McLay said that means offering great items at disruptive prices for Sam’s members.
DISCUSSION QUESTIONS: How likely are most consumers who became new members of warehouse clubs during the pandemic to remain so as disruption concerns ease? How do you see Sam’s merchandising and operational capabilities stacking up against its warehouse club competition?