PYMNTS MonitorEdge May 2024

Sam’s Club Recruits Its Customers to Drive Private-Label Innovation

Sam's Club

As retailers rethink their relationships with their customers looking to drive deeper loyalty and higher engagement, Sam’s Club is looking to its membership base to help guide the future of its Member’s Mark private-label brand.

The Walmart-owned warehouse club chain announced Thursday (June 6) the launch of a new initiative aimed at involving its members more deeply in product development. The process, dubbed “dynamic consumer engagement,” aims to gather and act on feedback from the retailer’s opt-in Member’s Mark Community, which has grown to 50,000 active participants. These community members vote on product decisions, test new items and provide ongoing feedback.

“In today’s ‘experience economy,’ our approach sets us apart from other retailers in ways that translate to real value for our members,” Sam’s Club Chief Merchant Megan Crozier said in a statement. “This is more than just an idea; it’s a collaboration that is already happening at scale, with input flowing from 50,000 active members, and we see the opportunity to include all members in the future. Our approach goes way beyond traditional focus groups and surveys, with true engagement that will shape the future of retail by creating more personalized experiences for our members.”

Currently, the community predominantly includes members who frequently purchase Member’s Mark products and are selected to broader Sam’s Club customers’ demographic trends. The next step of the program aims to expand participation to all Sam’s Club members, allowing them to engage with the brand more interactively.

The move plays into two broader trends in retail right now. The first is an increasing demand for consumers to feel heard and known by merchants. Take, for instance, shoppers’ growing expectations that retailers will personalize messaging to their individual habits and preferences.

According to the PYMNTS Intelligence report “Personalized Offers Are Powerful — but Too Often Off-Base,” which surveyed more than 2,500 consumers in the U.S., 83% of shoppers expressed interest in receiving personalized offers. Plus, retailers are finding that consumers specifically want these personalized experiences to drive emotional connections. In recent months, retailers have been rethinking loyalty programs to drive deeper engagement.

The second trend represented by the initiative deals with trade-down. As shoppers have been switching to less expensive retail products, merchants have been seizing the opportunity for their own-brand products to gain share. Target’s private-label lines, for instance, have been performing so well that the retailer is beginning to sell its products at other stores. Last month, CVS dropped a new brand of 40 products under the name Well Market. Walmart announced in April its most significant private-brand food rollout in two decades with its new bettergoods line.

Shoppers are switching out from their previous favorite national brands for more budget-friendly alternatives, according to a PYMNTS Intelligence survey of more than 4,000 U.S. conducted earlier this year. The study, part of the New Reality Check: The Paycheck-to-Paycheck Report series, found that 45% of shoppers who earn less than $50,000 annually, 41% of those who earn $50,000 to $100,000, and 28% of those who earn more than $100,000 said they had traded down on quality in the previous year.

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