The newest Sam’s Club location will have zero checkout lanes, a sectional sofa, and a sparkling blue Mercedes-Benz SUV as soon as customers walk in.
Welcome to the first all-digital store and potential future of the Walmart-owned membership club. When the club opens in mid-October, patrons will be required to ring up their purchases as they proceed down the aisles using a smartphone app called Scan & Go.
The firm will showcase things available exclusively online, including a five-carat lab-grown diamond and a 12-foot Christmas tree, in the section usually used for cash registers. Users may access the app’s contents immediately by scanning QR codes.
Executives at Sam’s Club estimate that store employees will have about four times more room to prepare online orders for curbside pickup and home delivery.
Chris Nicholas, the CEO of Sam’s Club, described the club as “sort of the physical manifestation of a journey we’re trying to go on as a company” when giving a tour of it before of its official launch.
The membership-based club, which was founded by Walmart founder Sam Walton in 1983, has evolved into the more technologically advanced division of its massive parent company. The club has created a number of significant inventions, such Scan & Go, that are being employed by its parent corporation. In an effort to surpass Costco, its biggest competitor, it has also used digital products.
With the Dallas-area store reopening almost two years after it was devastated by a tornado, Sam’s Club is stepping up that approach.
According to Nicholas, the facility will serve as a test site for Sam’s Club’s newest innovations and cutting-edge technology once it reopens.
He explained, “The idea is that we will eventually be a 100% digital engagement business, and you have to prove that things work before you scale them.”
“It feels like what it’s like to shop in the future,” he continued.
Comparing with Costco
According to Peter Keith, senior research analyst at Piper Sandler, Costco has been “the king of the warehouse club channel” for a long time. However, in order to “improve the shopping experiences,” Sam’s Club has added extras. For example, in some of the clubs, a permanent station has been installed where a chef prepares sushi rolls in front of patrons.
Notably, Sam’s Club has set itself apart by embracing e-commerce options and catering to consumers looking for quicker and simpler methods to purchase, including Scan & Go.
The lengthy lineups to check out—which are the most unpleasant aspect of these membership clubs—are genuinely eliminated, he claimed.
Sam’s Club and Costco both have nearly the same number of clubs in the United States, but Costco earns roughly twice as much money each year. In its last fiscal year, Sam’s Club had net sales of $86.2 billion, while Costco’s U.S. clubs brought in $176.63 billion.
Sam’s Club has taken numerous more major measures to catch up to Costco: It combined its private labels—which came from over 20 distinct brands—into Member’s Mark. It reduced the quantity of original products it offered, concentrating instead on the tried-and-true ones. Additionally, it just said that, in advance of the holidays, it will increase the average hourly pay for about 100,000 of its employees.
In August, Sam’s Club also unveiled The Clubhouse, a 37,000-square-foot office complex located across from the company’s Bentonville, Arkansas, headquarters. In order to assist the store generate new ideas, test goods, and work with cross-departmental teams on projects, it has workshop areas and resources including white boards, art and craft supplies, and cardboard models.
Additionally, it is in the midst of a vigorous growth, with ambitions to build around 30 additional clubs over the course of five years.
Sam’s Club’s comparable sales in the U.S., a statistic that includes sales from stores and clubs operating for the preceding 12 months, climbed 5.2% in the most recent quarter, which ended July 31, compared with the year-ago period. Among these was a 22% increase in e-commerce year over year.
According to Nicholas, the next clubs—including the one in Grapevine—will be built to withstand greater volume more effectively.
A pizza robot, for instance, will be able to produce up to 100 pizzas in an hour in the club’s cafe. Additionally, it will test a new system that sends food orders that clients place using Scan & Go to a designated cubby.
digital era
Because it concentrates on providing convenient shopping options, Sam’s Club, like its parent firm Walmart, has been drawing customers from a wider spectrum of age groups and economic brackets. Millennials and Generation Z made up around half of the new members that joined Sam’s Club in the most recent quarter, the firm reports.
According to the firm, Scan & Go is presently used by one in three members for club shopping. Recently, it introduced new exit technology that scans patrons’ shopping carts automatically and lets them leave the club without a worker verifying their cart or glancing at a receipt. Customers pass beneath an artificial intelligence and computer vision-powered archway. This technology works similarly to Amazon’s Just Walk Out, which is starting to catch on at stadium events in addition to a few of the online retailer’s physical locations.
However, Sam’s Club CEO Nicholas admitted that certain customers would be hesitant to adopt new routines or technologies.
Mommy Tiffany Zuniga, a Lyft driver from the Dallas area, said she is excited to visit Sam’s Club again but is a little hesitant about the new technology. Zuniga stated that she used to shop at Sam’s Club for quick family meals and supplies for church functions, but that she moved to Costco after the store was forced to close due to storm damage.
She expressed her hope that the new technology won’t compromise customer service, even if she hasn’t utilized Scan & Go.
“If you scan the wrong thing or need help, sometimes it can get a little dicey,” she added. “Hopefully, there will be enough personnel available.”
The store posted signage at the neighboring Sam’s Club gas station and car wash to inform consumers of the club’s comeback and to urge them to download the Scan & Go app while construction teams wrapped up work on the Grapevine location.
Additionally, the firm stated that staff members would be available to assist clients with downloading the app or accompanying them on a shopping excursion if necessary, as soon as they enter the recently renovated club.
The number of retail employees in Grapevine won’t change, according to Nicholas, but some will have new responsibilities.
