THE CEO of Sam’s Club has revealed his fight to lower prices in the new year in a major update to the retail giant’s business model.
Sam’s Club’s CEO and president Chris Nicholas said the store uses low prices and new technology to conquer its competitors.
Sam’s Club’s CEO said the club model works well for the brand (stock image)[/caption]
Sam’s Club CEO Chris Nicholas[/caption]
As the store’s parent company, Walmart, was named Yahoo Finance’s Company of the Year, Nicholas revealed how Sam’s Club plans to keep prices low despite rising inflation rates.
“My merchandise team [fights] every single day to reduce prices for our members,” Nicholas said in an interview with Yahoo Finance.
“That is what the club model does. This is the moment for the Sam’s Club business model.”
Nicholas said the club model “shouldn’t make any money on what we sell,” meaning the cheaper the operation runs, the cheaper prices will be.
“It’s a really cool model because what it means is that you get better items and sell them cheaper, you get more engagement, and those members then renew with you, and they tell their friends, and they come and join your club,” Nicholas said.
“This is why the club model is such a great place right now, and that’s not just in the US,” he said, adding that the success is seen “globally.”
He went on to say the store’s use of technology, including Scan and Go, has put it in a position to keep growing.
Scan and Go technology lets Sam’s Club’s members skip the checkout line by scanning products’ barcodes on the app as they go along.
This way, customers can pay through the app and just have an employee check their order as they leave the store.
Members can also use Just Go arches, which check a shopper’s cart automatically, meaning they don’t need to be stopped by an employee as they exit.
Nicholas said the store’s shift to adapt to evolving technology has paved the way for its success.
“This year, we’ve used technology that’s computer vision … to take 100 million tasks out of our associates’ hands in clubs,” the CEO said.
“We don’t have fewer associates. They just don’t have to do the mundane things they used to do: the paperwork, the clipboards, the how do you find the inventory? How do you solve problems for members?”
Sam’s Club will continue to use artificial intelligence for changes like Scan and Go and the exit arches, Nicholas explained.
Sam’s Club membership tiers
Sam’s Club offers two levels of membership plans.
Club membership – $50 annually
- Members-only fuel savings
- Free curbside pickup on orders of $50 or more
- Scan and Go shopping
- Low members-only prices
- Extra membership card for another member of your household
- Add up to eight Club members for a reduced price of $45 each
Plus membership – $110 annually
- Club membership perks included
- Early shopping at some locations
- Free delivery on orders of $50 or more
- Free curbside pickup
- Add up to 16 Club members for a reduced price of $45 each
- Pharmacy and optical savings
- 2% Sam’s Cash back
- Early shopping at some locations
- Early access to tire and battery center services
- 50% off installation of four tires
“AI is everywhere. We’ve been working on AI for a long time,” he said.
“The Scan and Go is a great example of AI. We’re using AI to help with search.”
He said AI is used to help with recommendations on the app for what shoppers should buy or if they’ve forgotten something on their grocery run.
“AI is becoming rooted in everything that we’re doing, but we’re doing it in a way that’s human, and I think that’s a really important nuance for us,” he added.
Nicholas said the brand is focused on growing digital engagement with members via the Scan and Go developments, e-commerce, and with great prices.
“We’ve been investing really hard, whether it’s leveraging the Walmart platforms or e-commerce and supply chain to building these new technologies that people are engaging with in unprecedented ways,” he said.
Scan and Go technology allows Sam’s Club customers to pay digitally[/caption]
