Walmart-owned Sam's Club Revamps Its Membership Structure

Walmart-owned Sam's Club Revamps Its Membership Structure

Sam's Club has announced that it is "simplifying" its membership structure by reducing the number of types to two: Club for $45 a year, a membership level formerly known as Sam's Savings, and Plus for $100. But Sam's Club is yet another chain that is under pressure not only from rivals like membership warehouse giant Costco, but Amazon and its ability to deliver just about any goods to homes at low cost.

BJ's Wholesale didn't waste any time swooping in on Sam's Club members after owner Walmart chose to close a number of its locations.

The company added that it is boosting the value of its Plus membership with free shipping on most items sold online, including nearly all of its Member's Mark products.

While Sam's Club previously had three membership options it will now have two.

Details are few, but the company said it's focused on creating "the quickest and most convenient shopping experience". He defined those target customers as homeowners who earn between $75,000 and $125,000 annually and typically live in the suburbs. But he also believes Sam's must strike a "delicate balance" because it doesn't want to walk away from business members too much.

Officials of the chain said that they are trying to boost value and convenience with the moves. The Plus level will come with free shipping on the vast majority, some 95%, of the items that Sam's Club says it sells on its website with no minimum order, officials said. Some of the closed stores will be converted into e-commerce warehouses.

After abruptly closing 63 locations nationwide, Sam's Club is moving forward with some big changes that will affect members.

The moves have been initiated by John Furner, the new chief executive officer of Sam's Club, in a bid to rejuvenate a business which has underperformed compared to its parent company Walmart as well as competitors such as Costco Wholesale. "Another piece of that strategy is building out a Sam's Club unique supply chain that enables us to get closer to members, and it makes ordering on easier and faster".

The company is tentatively planning to open other e-commerce facilities in Florida, California, the Chicago area, and the Northeast in the coming months, executives said.

"With free shipping for Plus [members], we're more aggressive on direct to home e-commerce than we've ever been", Furner said.