Some things are on the universal retail wish list.
Every merchant wants to build a close relationship with their customer, be focused on how they buy inventory and build up to a critical mass that unleashes the efficiency of scale.
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It turns out, Sam’s Club has all of that.
In another context, the 600-door chain would be considered a giant – but as part of Walmart Inc., which drove nearly $650 billion in total revenue last year, the club is something more like a $86 billion side hustle.
The retailer doesn’t break out how big its apparel business is, but 15 to 20 percent of the store is devoted to fashion, which drives foot traffic and offers something of a halo to the general offering.
Sam’s Club’s retail turnaround offers a glimpse of what can be done when consumer relationships and value are increased and when store presentation and product breadth are favored.
A basic Sam’s Club membership costs $50 a year and that payment is a form of retail agreement with shoppers.
“Since people pay to shop with us, we think it’s really important that they have higher expectations of us, we know them,” said Megan Crozier, chief merchandising officer at Sam’s Club, during a tour recently opened a store in Secaucus, NJ “Our ability and our responsibility to provide value to that membership is something we think about every day.”
Megan Crozier
While Sam’s Club and Walmart share the usual sibling relationship, both have distinct approaches to retail and fashion.
Walmart carries almost everything and Sam’s Club strives to offer the best of the items they choose to carry. In all, Sam’s Clubs carries between 3,500 and 4,500 items, offering a tight selection of everything from groceries and electronics to jewelry and winter coats.
“I think our merchants are almost like a personal shopper,” Crozier said. “They’ll go out, canvass the world and then say, ‘Hey man, we’ve done the shopping for you.’ We’ve done the hard thinking – the paradox of choice, it doesn’t have to exist here at Sam’s Club.
“We spend a lot of time focused on the quality we expect from our goods and anything below that threshold, whether it’s actual quality or value, we don’t need to carry because we’re only as good. as our worst performing item,” she said.
It is an approach that has evolved.
Excluding fuel, comparable sales at Sam’s Club grew 4.8 percent last year. Operating income was up 11.6 percent to $2.2 billion.
Membership is at an all-time high, although the exact figure has not been released. About 50 percent of recently signed up members are Gen-Zers or Millennials and the company’s target demographic has a household income of $125,000 and children.
Because the shoppers are members, Sam’s Club knows a lot about them and works to understand their needs. The 50,000 Member Mark Community is a group of members who regularly give feedback to the company, sometimes receiving samples of items they can test at home.
“We feel that every member who joins Sam’s Club should be a part of that Member’s Mark community and have an impact on what we choose to sell them,” said Crozier.
“It’s called participatory retail,” she said. “It’s word of mouth, but I think this is the future of retail and I think we’re on the edge of being able to do that and do that best in class because of the relationship we have already with our members. “
In fashion, that means a business driven by items, not entire assortments.
“The merchant boils down to, ‘What does the button look like?'” Crozier said. “This is where other retailers are — they don’t have the time and attention because they’re managing a portfolio; our merchants are managing an item. We want the items to be what you see on the floor, not the fixture, not the signature.”
And when those items are gone, they’re gone.
“We always love scarcity,” she said. “We think it creates a treasure hunt. It creates that intensity around, I want to shop right now. So we always think about that balance.”
The main items are carried by the clubs themselves and Sam’s Club’s digital business has a wider selection, but not the endless stream of goods carried by, say, Amazon.
Brett Crowell, Vice President for apparel and jewelry, said: “We are a home of national brands. Members, their first thought when signing up for membership is pushing into that piece of convenience, trying to get in and out. But then they go in and are so surprised and amazed by the brand portfolio and items.
“And we love being that moment for them, whether it’s online when they shop on the app or when they come into the club,” Crowell said. “We just have a terrible value for that brand.”
He pointed to a DKNY wool coat displayed on a rack.
“Our members are really smart and can get this coat at Macy’s, Amazon, wherever it is, and it’s $100 plus,” Crowell said. “At Sam’s Club, it’s only $58. And that’s very exciting for them.”
Those savings almost pay for the annual membership with one item.
Sam’s Club carries looks from its own Member’s Mark brand as well as Eddie Bauer, Levi’s, Gap, Under Armor and others.
A recent addition, Express, reflects the changing landscape in fashion.
The retailer went bankrupt in April, but the intellectual property is controlled by brand management firm WHP Global, which has been working on expanding the name.
Sam’s Club members were excited to see the brand in the store, Crowell said.
“It’s a nicer style,” he said. “You might think you’d come to Sam’s to buy sweatshirts and sweats. You can also buy something if you are leading a holiday party.
“This was brand new for us,” he said. “We’ve had incredible results so far, bringing in new members who haven’t bought clothes from us before and we love it. The full Express mix we’ve edited is live on the app with a few pieces in the club.”
Edited by Remi Bader at Sam’s Club.
Sam’s Club recently introduced Edited by Remi Bader, a new line made in collaboration with the influencer.
“We approached her and asked her to launch a brand because of her voice in the industry on social media,” Crowell said. “She’s very passionate about size inclusion, and we’re talking a lot with our members and they’re looking for larger sizes and they don’t want to have to sacrifice quality and they want style. So we worked with her and we’ve just launched this collection. It was really amazing. And you can see that we have a wide range of sizes all the way up to 6X on our app.”
All items in the line are under $30.
And that’s a good example of how the Sam’s Club ecosystem works to get shoppers what they want.
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