Some things on the retail wish list are universal.
Every merchant wants to build a close relationship with their customer, be focused in how they buy inventory and build up to a critical mass that unleashes the efficiency of scale.
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 revenues last year, the club is something more like an $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 for the general offering.
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Sam’s Club’s spin on retail offers a look at what can be done when consumer relationship and value are amped up and favored over store presentation and breadth of offering.
A basic membership in Sam’s Club costs $50 a year and that payment is a kind of retail pact 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 recent store tour in Secaucus, N.J. “Our ability and our responsibility to deliver value to that membership is what we think about every single day.”
While there is the standard sibling rivalry between Sam’s Club and Walmart, the two have distinct approaches to retail and fashion.
Walmart carries just about everything while Sam’s Club seeks to offer the best of the goods they choose to carry. Overall, Sam’s Clubs have 3,500 to 4,500 items, offering tight edits on everything from groceries and electronics to jewelry and winter coats.
“I think about our merchants as almost like a personal shopper,” Crozier said. “They’re going to go out, canvas the world and then say, ‘Hey member, 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 what quality do we expect out of our items and anything below that threshold, whether it be the actual quality or the value, we just don’t need to carry it because we’re only as good as our worst performing item,” she said.
It’s an approach that has led to growth.
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 has been hitting all-time highs, although the exact figure is not released. About 50 percent of the members signing up recently are Gen-Zers or Millennials and the company’s target demographic has a household income of $125,000 and kids.
Because the shoppers are members, Sam’s Club knows a lot about them and works to understand their needs. The 50,000 strong Member’s Mark Community is a group of members that regularly gives feedback to the company, sometimes getting samples of items that they can test at home.
“We think every member that joins Sam’s Club should be part of that Member’s Mark community and have an influence over what we choose to sell to them,” Crozier said.
“I call it participatory retail,” she said. “It’s kind of a mouthful, but I do think this is the future of retail and I think we’re on the bleeding edge of being able to do that and do that best in class because of the relationship we already have with our members.”
In fashion, all that translates into a business that’s driven by items, not full assortments.
“The merchant gets down to, ‘What does the button look like?’” Crozier said. “This is where other retailers — the time and attention isn’t there because they’re managing a portfolio; our merchants are managing an item. We want the items to be the thing you see on the floor, not the fixture, not the signing.”
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 clubs themselves carry the key looks and the Sam’s Club digital business carries a broader selection, but it’s not the endless stream of goods carried on, say, Amazon.
Brett Crowell, vice president for apparel and jewelry, said: “We are a house of national brands. Members, their first thought when they’re signing up for a membership is leaning into that convenience piece, trying to get in and get out. But then they get in and they’re so shocked and surprised at the brand and item portfolio.
“And we love to be that moment for them, whether it’s online when they’re shopping on the app or they come into the club,” Crowell said. “We just have a shocking value on that brand.”
He pointed to a DKNY wool coat displayed on a rack.
“Our members are super savvy and they can go find this coat at Macy’s, Amazon, wherever it is, and it’s a $100 plus,” Crowell said. “At Sam’s Club, it’s only $58. And that’s really exciting to them.”
Those savings almost pay for the annual membership with one item.
Sam’s Club also carries looks from its own Member’s Mark brand as well as Eddie Bauer, Levi’s, Gap, Under Armour and others.
One recent addition, Express, illustrates the shifting 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’s reach.
Sam’s Club members have been excited to see the brand in the store, Crowell said.
“It’s a little bit of a dressier style,” he said. “You might think you would come to Sam’s to buy sweatshirts and sweats. You can also buy something if you’re headed to a holiday party.
“This was brand new for us,” he said. “We’ve had incredible results so far, picking up a new member that hadn’t purchased apparel with us before and we love it. The entire Express assortment that we’ve edited lives on the app with just a couple of pieces in the club.”
Sam’s Club also recently introduced Edited by Remi Bader, a new line made in collaboration with the influencer.
“We approached her and asked to launch a brand with her because of her voice in the industry on social media,” Crowell said. “She’s very passionate about size inclusivity, and we’ve been talking a lot to our members and they are looking for more sizes and they don’t want to have to sacrifice quality and they want style. So we collaborated with her and we just launched this collection. It has been absolutely phenomenal. And you can see we’ve got a really wide range of sizes all the way up to 6X on our app.”
All the items in the line are priced at under $30.
And that’s a good example of how the Sam’s Club ecosystem works to get shoppers what they want.
