Sam’s Club Takes On Convenience In Age of Amazon

Sam's Club

Warehouse clubs may conjure up images of cavernous stores stocked high with merchandise as far as the eye can see, but Walmart’s Sam’s Club is taking a different approach with a new store in Texas. The new brick-and-mortar location will come chock-full of new retail innovations, but the store won’t carry a plethora of items. Instead, the warehouse will focus on a smaller assortment of offerings, such as prepared foods.

“This site will carry a limited number of items focused on the community,” said Jamie Iannone, the chief executive officer of and executive vice president of membership and technology, in an announcement. “We’ll lean heavily into grocery and fresh food items, such as grab-and-go meals, the consumable items members buy most frequently, and services like fast, same-day Club Pickup and delivery options that will help busy families.”

The new 32,000-square-foot store will carry only 1,000 to 2,000 stock keeping units (SKUs). It will also notably come full of digital features, such as checkout using Scan & Go and digital signage in the store.

“This will be smaller than a typical club which is perfect for testing innovations in a live shopping environment,” Iannone said. “You can expect to see a new level of convenience at this facility, and the technologies we use will continue to evolve.”

One of those technologies, Scan & Go, comes as Amazon opened the doors to its Amazon Go C-Store in January. At that location, the shopping is done via mobile app, and customers get to leave with what they’ve bought without having to wait to checkout. It’s all about the cameras and sensors working in conjunction with mobile devices held by consumers’ record purchases. Upon exit the store, shoppers receive a receipt via phone. Amazon calls it “Just Walk Out.”

The idea behind such a feature is to get rid of a large pain point for consumers, which happens to be the checkout line. The technology is part of a move by retailers such as the Amazon’s and Sam’s Clubs of the world to improve the customer experience.

“Amazon Go was a success because it found a way to remove that friction from the experience,” Clarus Commerce CEO Tom Caporaso told Chain Store Age. “Retailers like Walmart and Sam’s Club are realizing how important it is to focus on their customers. As consumers continue to change, retailers need to find ways to change with them.”

Shipping And Delivery

Beyond introducing a store with fewer products and a focus on digital features, Sam’s Club has taken other omnichannel initiatives such as delivery. In February, for example, the warehouse chain announced that it intends to offer home delivery of grocery goods through a new tie-in with Instacart. The expanded service will be online and available for consumers in the Dallas-Forth Worth area the new tech-driven store also happens to be in Dallas and in St. Louis. Orders can include fresh product or small appliance delivery and can be accessed by customers who are not presently Sam’s Club members.

The move comes shortly after the news that Amazon will be leveraging its nearly $14 billion purchase of Whole Foods to offer essentially free grocery delivery to customers in range of their stores. The move also comes as Sam’s Club CEO John Furner is searching for way to help the warehouse business standout as opposed to struggle.

In February, Sam’s Club undertook a strategic shift one that began in January with something of a bang when Sam’s announced it was closing 63 stores as part of its overhaul strategy for the business. The next phase of that strategy went public this week, when Sam’s announced that it would be making a bigger shift toward eCommerce and offering Sam’s members that paid $100 a year for their Sam’s Plus membership free shipping on any item. That perk is familiar, of course, as it is also the foundational perk of Amazon Prime.

Click-And-Collect And Mobile Apps

Sam’s Club is not the only warehouse chain taking on omnichannel innovation: BJ’s Wholesale Club has brought a click-and-collect service to 215 of its brick-and-mortar locations as part of its efforts to enhance its customer experience. The service, dubbed “Shop Pick Up in Club,” allows shoppers to pick up their online orders as soon as two hours after placing them, Supermarket News reported.

Customers check in with a door greeter once they arrive at a BJ’s location, and they will point the customer in the direction of the designated order pick-up area. With the service rollout, BJ’s has also added the ability for shoppers to automatically add select coupons to their online orders through its “Add-to-Card” functionality. Shoppers could previously make use of that option only while shopping in one of the BJ’s stores.

The wholesale chain rolled out its redesigned mobile app last fall, offering customers an option built nearly entirely around an enhanced experience. According to Rafeh Masood, senior vice president and chief digital officer at BJ’s, “The new mobile site is an important step in our omnichannel transformation. More and more members use their mobile devices every day, and enhancing the BJ’s mobile experience makes shopping more convenient for our members.”

Beyond BJ’s and Sam’s Club, Costco CFO Richard Galanti said in a post-earnings conference call in June that the retailer has “eCommerce product showcases” in 220 of its roughly 520 locations in the U.S. — along with online ordering capabilities. Galanti said the retailer will roll out more omnicommerce offerings in its stores by the end of the year: “All U.S. locations will have something in place … by this year’s upcoming fall holiday season.”

In all, warehouse clubs aren’t just relying on good deals on rows of bulk items. To stack up against the competition, omnichannel and digital innovation is becoming part of their strategy, too.