Back in the mid-2000’s, Sam’s Club stores had big signs painted on their walls proclaiming, “We Are In Business For Small Business.” They called themselves a “wholesale warehouse” and focused on getting small businesses to pay for membership cards their employees could use to purchase merchandise in bulk or discount. In 2006, the company decided to drop the “Small Business” slogan and to open up memberships to individual customers. (But they’ve continued to promote their small business connection.)
In the ten years since the change, Sam’s Club has continued to struggle to figure out what it is and who it serves. Like other big box stores, including Sam’s Club corporate sister, Walmart, the tsunami of online shopping has changed their world. Sam’s Club recently announced it is closing 63 stores. Yesterday (2.14.2018), executives revealed more details about its strategic shift — one that seems very focused on competing with Amazon.
“The changes are part of a broader strategy that Sam’s Club executives said involved closing underperforming stores and focusing on core customers — typically a family making $125,000 a year that lives in the suburbs and may own a small business.”
The Amazon irony
Like Walmart, Amazon is often portrayed as the enemy of small business. Unlike Walmart, Amazon uses a long-tail version of retailing that allows businesses, large and small, to sell products in its marketplace. We’ve even explored the theory that independent bookstores have benefitted from having Amazon as an ally in that industry’s earlier war against big-box retailers like Borders and Barnes & Noble. Perhaps a similar theory could be applied to Amazon’s competition with Target, Walmart, Sam’s Clubs et al.
Can Sam’s catch up?
One of Amazon’s greatest retailing “innovations” was not even an innovation. “Prime membership” was an adoption of the core differentiators of the entire warehouse club concept: Selling annual memberships. What started out as Amazon’s Prime membership for free shipping has turned into a juggernaut of benefits including streaming movies and, more recently, Amazon Business Prime Shipping.
The Sam’s Club announcement yesterday of a membership premium of free shipping comes 13 years after Amazon Prime’s launch. And Amazon has not stood still during those 13 years. While Amazon does not make such numbers public, estimates for the number of Prime members range from 60-90 million.
That said, Walmart is the largest retailer in the world and the most successful retailer in the history of, well, retailing.
So, if you’ve let your membership lapse and you are “a family making $125,000 a year that lives in the suburbs and may own a small business,” here’s what Sam’s Club want’s you to get.
$100 Plus membership | Free shipping on almost any item
$45 Club membership | Includes discounts on services like flat tire repairs.
Photo | jmoor17 | istock