Dive Brief:
- Sam's Club last week reintroduced retail space to a former store in Tampa, Florida that the company had converted to an e-commerce fulfillment site, according to local reports. The store shuttered last January as part of the company's sweeping closures and began filling online orders several months later.
- The retail space, located in what was the former store's liquor and tire service section, includes a selection of 2,000 popular products. There are no checkout stands: Customers must use the club retailer's Scan & Go app to pay for products.
- Customers interviewed by local media expressed confusion and disappointment at the new store's limited selection and no-frills presentation. Bill Ball, Sam's Club's senior director of e-commerce supply chain, told a local Fox affiliate the store is a test for the company.
Dive Insight:
Big-box stores like Walmart, Target and Meijer are focused on adding e-commerce fulfillment operations to their existing stores. What's interesting about the Sam's Club test is that the company is doing the reverse — adding retail to an online fulfillment site.
Sam's Club says the new store is an experiment — and a low-stakes one at that, with no checkout stands and little to no merchandising in the space. There's no new branding, either, with a simple "SamsClub.com" sign advertising the store to shoppers. Local media reports note shoppers have missed the retail location that closed last January, and Sam's Club wanted to see if it could tap into some of that pent-up demand.
"Sam's Club has always been willing to experiment, and that appetite has only grown," Tim Campbell, an analyst with Kantar Consulting who covers club stores, told Grocery Dive.
Campbell said the main value of the store will come through the consumer insights it delivers. The store doesn't offer order pickup, but Campbell said he could see it adding that feature eventually. Ball with Sam's Club told Fox 13 the company will see how the layout resonates with shoppers as consumer purchasing habits shift.
Like many other retailers, Sam's Club is adjusting for an omnichannel future. Last January, the company announced plans to shut down 63 club stores. Around a dozen locations were converted to e-commerce sites, including the Tampa store, while the remaining locations went out of business permanently. Other shuttered stores that have reopened as fulfillment warehouses include a location in Worcester, Massachusetts, one in Matteson, Illinois and another in Chicago and Memphis, Tennessee.
In addition to the Tampa store test, Campbell said Sam's Club Now in Dallas is helping the company gauge consumer responses to new technology and a smaller store size.
Campbell said retailers may add retail space to their warehouses where it makes sense, but he sees vastly more interest in carving out fulfillment capabilities from their backrooms and retail floors.
“It makes more sense to optimize the existing space you have to adjust to the new ways shoppers are shopping," he said. “But I think you’re going to see a lot more of the Target example than the Sam’s Club version."
