Sam’s Club exec says the retailer is gaining traction with ‘club pickup’

by Kim Souza (ksouza@talkbusiness.net) 552 views 

Sam’s Club has installed drive-through pickup lanes in 60 of its clubs, with plans to expand to 100 clubs by year end, according to Jamie Iannone, president and CEO of Samsclub.com. He said Sam’s Club has offered curbside pickup for more than 15 years. It was first called ‘click and collect.”

“It began when companies started faxing in their orders,” he said during a recent speech at the ShopTalk Conference in Las Vegas

As Sam’s Club grew its membership to include families as well as businesses, the service is growing in demand. Sam’s Club began building dedicated pickup locations adjacent to the clubs about two years ago, first testing it in Bentonville. Sam’s Club also allowed customers to check-in with their smartphone via the Sam’s Club app, which is also equipped with a scan & go feature that allows members shopping inside clubs to bypass the checkout lines.

Iannone said the prototype for the drive-through lanes are in Bentonville. He said the drive-through lanes and mobile check-in has shaved time off the process and customers spend as little as 30 seconds picking up items they ordered online.

Retailers understand that time is the new currency for busy families and business owners. Wal-Mart Stores CEO Doug McMillon recently said having the best prices isn’t enough because consumers also want convenience and that’s often as important than lowest price. Iannone said timing is also crucial for product quality when almost half of the orders it fills include fresh and frozen items.

He said successful Club pickup depends on e-commerce capacities that have near perfect in-store inventory accuracy, reiterating that all items have to be online whether purchased digitally or in clubs. Iannone said business customers also expect their orders to be complete, which is important for restaurant customers who re-stock each day. He also said Sam’s Club has been testing business delivery from stores in a couple of markets. He did not indicate that this test would expand, but did say the service has resonated well with members.

In June 2016 Iannone told Talk Business & Politics the enhancements that Sam’s Club made with the mobile check-in, drive through collection and automatic recorder helped increase the business by 46% year-over-year.

RetailWire recently asked experts to quantify how much of an advantage Sam’s Club might gain from incorporating technology into services like club pickup and scan & go. They were also asked which was more significant club pickup or scan & go. Overwhelmingly, the retail consultants and insiders said club pickup was the bigger move of the two.

Charles Dimov, director of marketing for OrderDynamics, said Sam’s Club doing pickup is “a no brainer.”

“Costco has not yet started any heavy foray into omnichannel — so, advantage Sam’s. For many customers, thinking of going to a big box warehouse retailer is a bit of a hassle. Mid-week, no problem. But try your luck on a weekend and it can be a crowded zoo. Going the click-and-collect route makes sense for many customers. The warehouse retail business is ideally suited for click-and-collect. It helps Sam’s cater to another group of customers who don’t like the lineup and hustle and bustle. … I am expecting to hear big things from this early start for Sam’s,” Dimov noted.

W. Frank Dell II, president of Dellmart & Company said Sam’s Club Pickup is what the business customer wants.

“The owner can order and pay online and send an associate to pick up. Most business customer are not on treasure hunt shopping trips. This saves the business customer time. Sam’s doesn’t have to train an employee to walk the store. Merchandise is available any time of the work day, reducing their business inventory,” he noted.

The consults also believe Sam’s Club investments in pickup and scan & go will give it a competitive advantage over Costco. Loyal Costco customer, James Tenser, principal at VSN Strategies, said he was impressed with Iannone’s recent discussion about club pickup.

“It makes sense to design service experiences for high-value business customers. I’ve been a loyal Costco member for many years, but I’m heading over to our local Sam’s this afternoon to see their process in action,” Tenser noted.

Carol Spieckerman, CEO of Spieckerman Retail, has praised Sam’s Club for its forward-thinking strategies of club pickup and scan & go.

“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,” Spieckerman told Talk Business & Politics  in June.

She said many Sam’s members are business owners and therefore are more technologically aware and savvy. Successful entrepreneurs have to stay on top of innovation in order to drive efficiencies in their businesses and to keep pace with their own customers, particularly through mobile-forward solutions. Secondly, the business and family focus for Sam’s members (that justify buying in larger quantities) also point to the need for convenience and time management. The solutions that Sam’s is rolling out cover both of these criteria, Spieckerman said.

Not everyone thinks saving people time will necessarily build bottomline profits, especially if the model is built around browsing and treasure hunting. While it makes sense on a convenience level, Kai Clarke, CEO of American Retail Consultants, said pickup is “a concierge service which might be a profitable segment with some of Sam’s club offerings, but it has to have an impact on costs.”

Clarke adds: “The entire club model is built upon a choose your own, browse the aisle, extra-large size, super discounted, product offerings. This seems to go against this model. I doubt it will be successful in all clubs in the longer term.”

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