Sam’s Club Unveils Innovation Store

Four months after announcing the new venture, Sam’s Club – owned by Walmart Stores Inc. (Bentonville, Ark.) – has debuted its first Sam’s Club Now store in Dallas, a space where it will test tech-driven retail innovations.

The site is 32,000 square feet, roughly a quarter the size of one of its typical warehouse stores, and it features in-store technology that interfaces with its Scan & Go feature, according to a release from the company. Shoppers using its new Sam’s Club Now app will be able to access smart shopping lists that learn behavior and auto-fill a member’s list, in-store app-based wayfinding, entertaining augmented reality features and one-hour club pickup. The store will also have electronic price labels that instantly update.

The store also hopes to increase efficiency for its workers: More than 700 cameras will monitor and manage inventory and optimize the store’s layout. The retailer will use the site to incubate, test and refine its companywide operations.


Walmart plans supercenter transformation with new ‘town centers’

Walmart’s supercenters are known for drawing customers from far and wide. But at a time when the company is being challenged to operate with greater efficiency and impact, it’s floating a collaborative approach that stands to draw additional shoppers and generate more revenue from existing real estate.

Perusing the Walmart Town Center website reveals a grab bag of concepts that seek to mold supercenters’ acreage into not just mall-like retail collections but gathering spaces, as well. Some of the projects call for green spaces and recreational facilities in addition to restaurants, coffee stands and shops built inside hip storage containers. A development in Tumwater, Washington, calls for a dog park and a coffee shop. The Longmont, Colorado, supercenter project will feature basketball courts, an ice skating rink and skateboard park.

Other developments may have movie theaters, driving ranges, doggie day cares, health clinics and farmers markets.

Walmart plans to customize each project to the local community, meaning that unlike the interiors of its cavernous supercenters, no two locations will look alike. Still, there are some common touches, including the Pickup Towers that dot numerous developments — underscoring Walmart’s push for e-commerce reach and convenience even as it updates its physical locations.

“We want to provide community space, areas for the community to dwell — a farmers market, an Easter egg hunt, trick or treating,” Johnson said, according to the Atlanta Business Chronicle. “We want to provide pedestrian connectivity from our box to the experiential zones that are planned on our footprint. We want to augment these experiences and activities with more food and beverage, with health and fitness, essential services and entertainment.”

Walmart stands to generate significant revenue as landlord. And names like Chipotle and Orangetheory are likely eager to occupy valuable real estate next to the nation’s largest retailer. Operating retail developments like this isn’t a new concept for grocery operators. Publix, for one, owns shopping centers throughout Florida that are anchored by its stores. Creative partnerships also aren’t a new concept. Hy-Vee, for instance, co-locateswith Orangetheory in a few spots and plans to follow this blueprint with future locations.

But no retailer can match Walmart’s scale with these developments. This means the company can likely negotiate favorable rent agreements. As a consultant interviewed by the Atlanta Business Chronicle points out, many supercenter sites, particularly population dense ones, have grown considerably in value since the ’90s and early aughts, when Walmart went on its nationwide building spree.

Most important, though, is the potential Walmart has to draw new shoppers to its stores. The low-price leader has been courting younger, more affluent consumers of late with an enhanced assortment of natural and local foods, private label offerings and acquisitions of brands like Bonobos and ModCloth. Partnerships with the likes of Shake Shack and Orangetheory would bring more of these shoppers into Walmart’s orbit.

But will twenty- and thirty-somethings who don’t shop with Walmart start doing so just because there’s a burger joint or a dog park on the premises? The retailer wants to create mini communities around its supercenters, but shoppers may be turned off by the idea of spending time at a Walmart-branded ice-skating rink or a coffee shop with a large orange Pickup Tower next to it.

Striking the right balance between consumer and corporate needs with these concepts — not to mention effective cross-promotions and deals with nearby retailers — will be key to the success of Walmart’s town centers.

Ultimately, this announcement underscores how, for all of its investments in e-commerce, Walmart still sees physical spaces and the in-store shopping experience as paramount to its success. It’s also yet another example of the retailer trying to leverage its strongest assets into even greater advantages.

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Is Amazon Go a competitive threat to grocers?

  • Amazon Go stores have officially made their way into multiple markets, presenting customers with a cashierless, “just walk out” shopping experience for the first time. Early reports from experts analyzing shopper behavior at Amazon Go stores are showing strong results with high sales, repeat customers and lengthy visits.
  • A report from inMarket analyzed shopper trends at five stores in Seattle and Chicago over a 60-day period, and found that the average length of a shopper’s visit to Amazon Go is 27 minutes. About 44% of customers visited multiple times over the study period. inMarket also found that traffic was heavier on weekdays than weekends, though some stores were closed on weekends. Peak visit times aligned with breakfast and lunch customers, according to the results.
  • Brick Meets Click also conducted a report on Amazon Go shopper behavior at the first store launched in Seattle, and found that Amazon Go could generate an estimated $2,700 in annual sales per square foot, higher than any other retailer except Apple — and that number could increase. Based on its observations, Brick Meets Click also estimates that Amazon Go will generate about 50 inventory turns per year, which is four to five times more than other typical retailers.

Dive Insight:

While Amazon Go is showing significant early success, inMarket suggests that the store concept is not necessarily a threat to grocers. The firm says this is partially because shoppers are treating Amazon Go as more of a convenience store or restaurant, rather than a grocery store.

The other major reason inMarket says grocery stores shouldn’t see Amazon Go as competition, at least at this point, is because of the hours of operation. Of the six Amazon Go stores operating in San Francisco, Seattle and Chicago, four of them are closed on weekends — the prime time for foot traffic in traditional grocery stores.

Despite the closures, however, Business Insider reported that those four stores are marketed as more of a destination for meals and snacks, while the two Seattle stores open on the weekends are being promoted as grocery stores. If that is the case, grocers should indeed have their eye on Amazon Go as possible competition, especially if Amazon plans to expand its more grocery-focused stores throughout the U.S.

According to Brick Meets Click, Amazon has plans to open 3,000 Amazon Go stores nationwide in the next few years. This is highly ambitious, but it appears that the strong results so far are good indicators that there may be an appetite for more stores. Still, these stores are in large urban areas that are often at the forefront of tech trends, and there are only so many of these metro areas in the U.S. To ensure customer adoption in other types of markets — from small towns to suburbia — Amazon may need to consider some additional pilot locations and connect with a wider variety of customers to understand their preferences and shopping behaviors.

So far, much of the traffic to Amazon Go stores are from repeat customers likely seeking out convenient grab-and-go meals or quick grocery items. Analysis from inMarket also noted that the relatively long length of shopper visits could result from sheer curiosity as customers take in the novelty of the store. In time, it wouldn’t be surprising if the average visit dropped as customers become more familiar with Amazon Go — and as the technology helps shoppers become more efficient.

While Amazon Go is the original innovator of the cashierless system, other retailers may not be far behind in experimenting with this model. Sam’s Club has announced that its first Sam’s Club Now store will soon open in Dallas, and it will follow the cashierless concept using its Scan & Go technology. There’s little doubt that Sam’s Club Now will be a direct