Sam’s Wants a Piece of Costco’s Pie
By George Anderson
Sam’s Club is thinking more upscale these days, reports Reuters.
Just as Wal-Mart has looked to offer higher quality items in an effort to capture some of the purchasing dollars that often go Target’s way, now Sam’s is looking to selectively go more upscale with the intent of grabbing higher-end sales a la rival Costco.
Speaking at Wal-Mart’s media conference, Doug McMillon, Sam’s Club president and CEO, said, “We don’t have as much market share as we believe we should have. Affordable luxuries present a great opportunity for us, if we deliver on quality.”
To accomplish its goal of selling more “affordable luxuries,” Sam’s will need to put increased emphasis on individuals rather than its normal small business customer. Costco has been extremely successful in this area in categories such as fine wines where consumers can purchase their favorite vintage at prices often much lower than sold elsewhere.
While “affordable luxuries” are a major emphasis in Sam’s sales development, Mr. McMillon said that the warehouse club is also finding opportunities in “unaffordable luxuries,” as well.
“We have been selling some high price points and having a ball with it,” he said. “It’s amazing to me how much people will spend.”
Sam’s CEO is not sitting behind his desk looking for answers on how to get more Costco shoppers in his clubs. He often visits the competition’s clubs to speak with its customers.
“I’ll go up to him and say, “Hi, I’m Doug. I’m with Sam’s. What are you doing here?”
The answers he gets are helping to shape what Sam’s is doing in its business.
Moderator’s Comment: What changes will Sam’s have to make to attract Costco shoppers? How will it communicate these
changes to consumers who are not already shopping in its clubs? –
George Anderson – Moderator