Sam’s Club using more technology to boost sales, connect better with business shoppers

by Kim Souza ([email protected]) 1,486 views 

Sam’s Club, once the rockstar of Wal-Mart Stores, is trying to recapture its mojo by embracing technology to enhance members’ shopping experience, a move some analysts say could make a difference.

On its own, the wholesale club would be one of the nation’s largest retailers with $56.828 billion in revenue last year. But profits slid 2.1% and net comp sales were flat, excluding fuel. One of the bright spots in the retailer’s business is expanded online sales as e-commerce business grew 27% in the first quarter.

Jamie Iannone, president and CEO of, attributed the e-commerce growth to investments made in the online shopping experience. He said the website was revamped for more shopping ease and in-club shoppers have been exposed more to online products via several “endless aisle” kiosks found around the store.

“Inside the store you will see a couple of patio sets but we sell a couple dozen patio sets online. These products are the same value and quality of what’s offered in club,” Iannone told the media during a recent tour of the Bentonville club during Walmart shareholders week.

He said the online products can be browsed via the kiosk, added to the cart and then shipped to a member’s home, and that’s part of the uplift in e-commerce sales. Sam’s has added endless aisle kiosks to fine jewelry, heath and wellness caregiving as well as tires. He said educating Sam’s workforce to become problem solvers is also playing a role in the uptick in e-commerce sales.

An example of an “endless aisle” kiosk now being used in Sam’s Club stores.
An example of an “endless aisle” kiosk now being used in Sam’s Club stores.

“If a member can’t find a product they want in the club, our associates are instructed to try and help them find it at,” he said.

Iannone said investments in mobile technology are also helping to drive e-commerce and overall club sales. The Sam’s Club mobile app continues to add new functions like pharmacy refill, membership renewal, club check-in for online pickup and more recently Scan and Go functionality which is now being tested in Bentonville. The Scan and Go function allows members to come into the club and scan the items into their phone and pay with a card payment system that’s been set up by the member. There is no need to go through a line, and the greeter at the door simply scans the e-receipt generated on the app. Executives hope to roll out this function across the country in the coming months.

Club pickup at Sam’s Club has been available for 10 years, but the enhancements that Sam’s Club has made with the mobile check-in, drive through collection and automatic recorder has helped increase this business by 46% year-over-year, according to Sam’s Club CEO Rosalind Brewer.

Sam’s has also equipped its busy onsite cafe to allow for online orders which can be picked up at the lunch counter. Brewer said the initiatives at Sam’s Club are about simplifying and enhancing the shopping experience and that happens by integrating technology for a digital savvy shopper base, while also ensuring quality merchandise is sold at a value.

Retail analysts applaud the technical integration that Sam’s Club is making in its physical formats.

“It’s great to see Sam’s making some bold moves when it comes to technology and more specifically, bringing digital innovation into the club environment,” said Carol Spieckerman, CEO of Spieckerman Retail.

She said two factors combine to make the upgrades relevant for Sam’s members. Many members are business owners and are more technologically savvy. Successful entrepreneurs have to stay on top of innovation in order to drive efficiencies in their businesses and keep pace with their own customers, particularly through mobile-forward solutions, she said.

Secondly, the business and family focus for Sam’s members – groups who typically buy in large quantities – also point to the need for convenience and time management. The solutions Sam’s is rolling out cover both of these criteria, Spieckerman said.

“Sam’s is smart to leverage its existing online platform to aggressively expand into new categories and increase the breadth of assortment in existing ones. Just as Amazon Prime members try to get the most out of their memberships by going to Amazon first, Sam’s has the opportunity to drive the same kind of top-of-mind loyalty both online and in its clubs. Expanded assortments help to seal the deal,” Spieckerman said.

Fayetteville-based Field Agent recently surveyed 500 club members and found that 68% shop Costco, 52% shop Sam’s Club and 17% shop BJ’s. The survey looked at what members were buying as well as their likes and dislikes around shopping experiences.

It came as no surprise the biggest “likes” were the value pricing they found in the club shopping experience. In fact 87% of the respondents said the everyday low prices they find in clubs while 65% pointed to sales and promotions, samples and demos also ranked high at 64%.

The respondents “dislikes” involved shopping experience. A little more than half (51%) said they’re not pleased with the crowds, and 39% said they don’t like the checkout processes/lines at wholesale clubs.

The study also looked at how happy shoppers were with wholesale clubs. Field Agent asked all 500 shoppers to assess wholesale clubs on five characteristics: customer service, store environment, prices, quality of merchandise and assortment of merchandise. The shoppers indicated they are mostly satisfied with the club shopping experience. It wasn’t just price that drove the satisfaction higher it was the quality of the merchandise as 90% of the respondents were extremely and very satisfied. Customer service satisfaction was also high as 73% of the respondents were at least “very satisfied” with customer service at the club they shopped.

Club shoppers in the survey were not active online with the clubs they belong to as 22% said they had purchased an item online for home delivery. Just 18% said they had used the club pickup option for online orders. Slightly more than a third of the respondents (37%) said they had downloaded the wholesale club’s mobile app. The respondents were asked to make suggestions to wholesale club operators about improving overall customer experience.

Roughly 37% said something must be done about the long checkout process. Sam’s Club has attempted to address that with Scan and Go for those members who download and set up payment information into the app.

About 20% would like to see greater selection in merchandise which Sam’s Club is also doing with its expanded online offerings.

Approximately 8% would like to see lower membership fees or their elimination, something that is not likely to happen given that a club’s profit margin is largely its membership revenue. Membership prices are going up, not down given the level of investment the wholesalers are making in technology. Sam’s Club has made it a priority to recruit members whose households earn at least $100,000 annually up from about $70,000 previously given that that higher income households members spend more and have a renewal rate than lower income households.