Sam's Club has seen a marked shift in customer behavior during the COVID-19 pandemic, including rising demand for contactless shopping and varying phases of product needs.
The Walmart-owned (WMT) membership warehouse often acts as an innovation hub for the world's largest retailer. And like its parent company, Sam’s Club — which delivered net sales of around $59 billion last year, — saw an increase in traffic during the height of the pandemic, boosted by double-digit gains in comparable store and e-commerce sales.
When Kath McLay, Sam's Club's new CEO, took over in November, she thought the holiday shopping season was "like jumping in the deep end."
Soon after, she'd have to navigate through a global pandemic.
"When we got through into January, I thought, 'Things will settle down now,’” she told Yahoo Finance in a recent interview. “And all the things I learned in November and December about Sam's Club has truly come to play through this pandemic.”
Sam's Club operates nearly 600 stores across 44 states in the U.S. and Puerto Rico. With a smaller store footprint compared to that of Walmart and less square footage (average of 134,000 square feet compared to an average of 178,000 square feet for a Supercenter), that means merchandising is that much more critical.
McLay's first task was to create a safe shopping environment for both associates and members. During the pandemic, Sam's Club added multiple sinks for hand-washing, including outside the checkout area.
The club also limited its operating hours, allowed for deeper cleaning, and added sneeze guards at the checkout, pharmacy, and member services. Now, associates go through temperature checks and health assessments before each shift, and wear personal protective equipment.
The club also meters the number of customers allowed in at a time and asks them to follow social distancing protocols via signage and floor decals.
The new normal of social distancing
Aside from the basics surrounding safety, Sam's Club delivered on some products and innovations that came to light during the pandemic.
Executives quickly learned that "people wanted contactless service" and expedited the rollout of Sam’s Club’s Curbside Pickup, previously piloted at just 16 locations. Last month, curbside became available across all of its clubs nationwide, allowing for members to place an order on the website or app, opt for email or text alerts, pay ahead of time, and pull up in their car to retrieve their orders.
Shoppers “didn't want to have to come into the club, so we needed to flip to actually delivering at curbside," McLay said. Social distancing has led to an "acceleration of curbside and club pickup, but also tools like Scan and Go, which enables them to do their shopping and have contactless payment."
Intended as a free perk for its Plus membership bracket, the nationwide curbside pickup is currently available for all members who want contactless shopping as the pandemic continues.
While any member can use the curbside service, Sam's Club also rolled out a concierge service in late March. This "shop from your car" experience caters toward the elderly and immunocompromised and is available on Tuesdays and Thursdays, the same days it offers special shopping hours in-store for that population between 7 and 9 a.m. local time.
"In those situations, people drive up to the Club and will quite often have a handwritten list,” the CEO told Yahoo Finance.
“We transact that onto an app and shop for them,” which makes people create lists about what they want.
“That's teaching us a little bit about items, about range, and about creating personalized shopping experiences and personalized orders for people,” McLay added.
The phases of customer needs
McLay also gathered a read on what customers wanted throughout the pandemic.
"We saw in that first phase what we were calling 'carbs and calories.' People were looking for comfort food, anything kind of that had potato in it, potato chips, potato fries, and indulgent ice cream as well,” she revealed.
Soon after, shoppers entered what McLay calls the "nesting phase," with people working from home and sheltering in place, purchasing home goods and do-it-yourself kits. During this phase, Sam's Club seized the opportunity to try new products, including a do-it-yourself Mother's Day cake for family bonding.
"It was just a unique product. And so we're constantly playing with different items to see, 'How do we fit where the member is right now, and delivery them products that delight them?" she said.
"Now, we're seeing this in outdoors, get fit phase. So, people are wanting to get out into their backyards, go out into nature. Also, I think people are trying to work out, how to deal with that carbs and calories phase I went through."
Julia La Roche is a Correspondent at Yahoo Finance. Follow her on Twitter.