Sam's Club CEO Kath McLay on Strategies for Member-Driven Growth

In a session earlier this week at Shoptalk 2022 in Las Vegas, Sam's Club CEO Kath McLay detailed how the retailer is delivering better experiences for its members across both physical and digital channels. Sam's Club, the warehouse club owned by Walmart, has posted an impressive 27 percent growth in its e-commerce business over the past two years. McLay is at the helm of that rapid growth.

McLay noted that Sam's Club's members have become younger and more digital savvy during the pandemic. To better serve both its existing members as well as its new members, Sam's Club has introduced new services, including Scan & Go within its mobile app, enabling members to enjoy contactless checkout at its clubs. Furthermore, the retailer launched Scan & Ship in select clubs as part of a pilot program, giving members the ability to scan and purchase in-store products and have them shipped directly to their homes. This is especially attractive for customers purchasing bulky, large items. Lastly, Sam's Club launched curbside pickup of online orders at the outset of the pandemic.

However, McLay and Sam's Club isn't solely focused on digital improvements. To fulfill its mission of being a truly omnichannel retailer that serves its members in ways they want, Sam's Club has invested resources to spruce up its physical club locations. The retailer has made its clubs more engaging with brighter and bolder colors; adding informative digital signage; and offering concierge-like services at its member desk in the clubs, including digital demos of in-club services such as Scan & Go.

"Members are recognizing there are many ways to engage with us," noted McLay. "Part of that is making our stores more efficient and engaging."

Merchandise Strategy Shifts

Sam's Club has also made shifts to its merchandise strategy that it believes benefits its members in addition to new omnichannel services. With supply chain challenges inevitable for a company that saw its e-commerce business boom like Sam's Club's did, the retailer took the opportunity that situation presented to bring on new suppliers and brands that it had not previously offered, including both national brands like Gap and Vince Camuto, as well as smaller independent brands.

"We've welcomed in niche brands and innovated through existing partners," McLay said. "Our members are looking to us for great quality [products] at disruptive prices."

In addition, Sam's Club's private-label brand, Member's Mark, has continued to grow its market share. This is due, in part, to the macro retail and economic environment.

"We're hearing from members that budgets are stretched," McLay told the audience. "We’re in a prized position to help them in inflationary times. Member's Mark gives them the quality they’re looking for at the prices they agree with. We can unlock and showcase to members the value they can get every day."

Emphasis on Innovation

McLay wrapped up her keynote by discussing Sam's Club technology road map, specifically addressing a question about the brand's use of robots for inventory analysis — a solution that its parent company, Walmart, tested but ultimately didn't go forward with. It's not unexpected that one tech solution may make sense for Sam's Club when it doesn't for Walmart, because the two store formats are so different. It's all about testing and learning, and identifying what ultimately benefits the member, noted McLay.

"Our approach is to go out with a hypothesis and then let the data lead our direction," McLay said. "There's a hyperfocus on the members and fixing their problems. We've started members' groups, collected data from our app, call centers, Yelp, Facebook ... take all that data to find where we’re letting them down, and then work to correct the issue."

As for Sam's Club future outlook, McLay is unsurprisingly bullish.

"Taking the assets we have — 100,000 people being member-obsessed — and the foundation we've built, there’s a tremendous opportunity in front of us."