US Insights

Sam's Club Faces These 3 Dilemmas

Tim Campbell


Retail 11.01.2017 / 10:00


Sam's needs to establish a consistent identity with shoppers.

Our annual Sam’s Club workshop is right around the corner (November 9th in Bentonville, AR). As I examine Sam’s Club’s path forward, I notice the club faces a challenging but potentially promising future defined by three dilemmas, each of which could be named after a competing retailer.

The Costco Dilemma

Costco’s threat to Sam’s is as much psychological as it is physical. Given that geographic overlap is limited, most US shoppers do not have much of a choice between clubs to shop. Nevertheless, Costco occupies a higher percentage of mindshare among US shoppers. As Sam’s Club strives to appeal to higher income shoppers with more treasure hunt items, it runs the risk of imitating Costco too closely while not being located close enough to higher income population areas to sustain that approach. To succeed, Sam’s Club must provide items that are uniquely relevant to its core shoppers and that cannot be found elsewhere. Implication: Develop Sam’s Club exclusives that make aspirational appeals more affordable to its members.

The Walmart Dilemma

Walmart can be the elephant in the room when discussing Sam’s Club’s strategy. Not only does Walmart have far greater shopper reach than Sam’s Club, but the majority of Sam’s Club shoppers also shop Walmart. In addition, over 1/3rd of Sam’s Club’s share a parking lot with a supercenter. Walmart continuously threatens to draw trips away from the club and undermine Sam’s Club’s initiatives with its with a wide assortment, EDLP approach, vast scale, and superior resources that can overlap with the club’s value proposition. To succeed, Sam’s Club must coordinate parallel but separate strategies to their respective shopper bases. Implication: Differentiate a Sam's Club strategy within the overarching Walmart account that prevents SKU duplication and price wars between the two divisions.

The Amazon Dilemma

Sam’s Club is heavily investing in its eCommerce operations and its in-club digital integration as the club strives to differentiate its value proposition. At the same time, Sam’s Club shoppers are increasingly likely to shop Amazon. To succeed, Sam’s Club must combine its physical and digital capabilities to create a powerful, convenient omnichannel experience that is difficult for Amazon to replicate. Implication: Engage Sam's Club on all of its platforms and invest in your own eCommerce assortments and fulfilment capabilities.


Sam’s Club is a retailer stuck between three rocks and hard place. The solution is to establish a consistent identity with shoppers that is differentiated from the competition. Former CEO Rosalind Brewer had one vision of Sam’s future that focused on the club experience and effectively serving key consumer and business shopper segments. As we’ll be discussing next week, John Furner has a different vision marked by a new core shopper and a reinvigorated focus on the core club model.

Source: Kantar Retail

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