Sam’s Club CEO John Furner spoke with members of the media Wednesday night (June 5) in Bentonville during Walmart’s annual shareholders’ week activities. He said the concept store — Sam’s Club Now — in Dallas has been an incubator for technology that could soon be rolled out to more of its traditional clubs.
The 32,000-square-foot concept is much smaller than a traditional club store but the contributions are significant. Furner said when the club opened six months ago there were some preconceived ideas about what members wanted. Within a few weeks, some of the data proved right.
Furner said getting the technology in front of members and getting instant feedback allows for tweaking and refining the most promising applications and also putting others on the back-burner.
He said a formal announcement will be made at the shareholders’ celebration on Friday in Fayetteville about some of the new technology plays coming from the Sam’s Club Now format. An app called Ask Sam and others such as shopping lists and Scan & Go for beer and wine are some of the more promising technologies gleaned from the cashier-less club in Dallas.
“We want to leave something better than when we found it, so when we hand off the baton to someone they can stay ahead of their competitors,” Furner said. “Sam’s Club is a wonderful business with a rich legacy and we have 90,000 people serving our members every day.”
Furner said he’s pleased with the latest business results, which have posted 13 quarters of positive comps. He said the smaller business allows Sam’s to be more nimble in innovating and adopting technologies that serve members better and create efficiencies within the club.
Sam’s Club Now is helping the company get technology and apps out in front of members more quickly. Furner said the tech team at Sam’s Club is innovating every day and applications can be tested at Sam’s and then adopted to improve retail elsewhere at Walmart and around the world.
In March, Sam’s Club filed a patent for next-level “scan and go” that allows members to skip the checkout line. Scan & Go launched nationwide at Sam’s Club two years ago and advances in technology are now making it faster and easier.
The company said the new technology uses computer vision and machine learning rather than having to locate a barcode and scan it. The member simply points the camera toward the product and the app will identify it and add it to the member’s shopping list. The time to scan a product was reduced from 9.3 seconds down to 3.1 seconds through the new process. Sam’s said the same technology will likely be incorporated for employees’ use as well. The company is also experimenting with the use of machine learning and artificial intelligence to help manage member shopping lists.
Furner said Sam’s Club is financially sound overall and much of that is related to the work done to invest in prices, improve product offerings and make the shopping experience easier for members. One of the perks added to Plus Members was free shipping for online orders. Sam’s Club executives have previously said adding the free-shipping benefits for the retailer’s Plus membership had hurt margins a bit. On Wednesday, Furner told Talk Business & Politics the transition up to the higher-dollar Plus memberships has been strong. He said the $100 versus the $45 membership makes up a good percentage of the shipping cost shortfall.
Furner said he is pleased with the growth of the online business, particularly in categories like fresh and consumables that tend to drive traffic. He said the company has also expanded some of its services that can add extra revenue streams. One of those is an online travel site that provides a one-stop destination for purchasing discounted hotel rooms, rental cars, tickets to theme parks, shows and events and even movies. He said there are also inside club services that the company will continue to offer to enhance the value of the membership.
He said stronger overall financials have allowed the company to further invest in price in key competitive markets like Los Angeles, where the results have been increased market share for Sam’s Club against its major rival, Costco.
Furner was asked by one reporter what kept him up at night and he said it’s the idea of disruption. He said it’s not just the competitor disruptions but also the “importance of disrupting ourselves that keep innovation moving forward.”