Sam’s Club has a new strategic plan, and the changes associated with it already are evident throughout the discount chain’s operations. The revised plan lays out the four target markets that the company aims to attract to its stores, institutes changes at the management level to reflect shifting priorities, and reiterates the company’s dedication to digital technology.
First, the company’s president and CEO Rosalind Brewer explained in an e-mail sent to all Sam’s Club associates that the segmentation and targeting the firm will be using hereafter will focus on four main categories of members. The first consists of large families with young children, but another segment comprises “social couples” of various ages who like to entertain. Furthermore, Sam’s will seek to appeal to families who live in close proximity to stores and regard the Club as a regular source for their grocery needs. Finally, Sam’s will reach out to new moms, shopping for their infants, who offer strong loyalty potential over time. Brewer’s plan for appealing to these groups involves increased data analysis and better merchandise allocations.
Second, several changes to Sam’s organizational chart reflect the effort to appeal to the four key segments. For example, a new vice president of category management will “deliver the analytical horsepower needed by our merchandising teams to make informed decisions.” New executive positions in charge of produce and meat similarly denote the chain’s efforts to feature more fresh food items. Because consumers frequently seek local offerings as well, another new vice president will be in charge of regional buying. Finally, to achieve an effective, well-integrated private label approach, Sam’s hired a private label specialist to take charge of its store brands.
Third, Brewer emphasized the importance of digital technology for differentiating Sam’s from its channel competitors. The ultimate goal for any uses of digital technology, according to Brewer, is making the shopping experience easier for members, whether they visit stores or shop from home. Claiming leadership in digital uses in the warehouse club market, Brewer predicted that “over time we’ll have the best use of integrated technology in retail.”
Discussion Questions:
- What type of retailer is Sam’s?
- Who are its primary competitors?
- Which groups has it chosen to target?
- Do you shop at Sam’s or one of its competitors? Why or why not?
Source: George Anderson, Retail Wire, October 6, 2015