Merchandising and Sustainability in Bulk
Each of the nearly 600 Sam’s Clubs across the country may not look as good as the retailer’s newest location near its home office in Bentonville, Ark., but that is the direction the warehouse club division of Wal-Mart would like to head.
The club, which opened last fall, was in pristine condition earlier this month as several hundred members of the media and financial community descended upon Northwest Arkansas for Wal-Mart’s annual meeting of shareholders. During tours of the club, they saw how extra skylights and shiny concrete make the club bright, and heard president and ceo Doug McMillon reiterate the strategy of being in business for small business with an increased emphasis on broadening its appeal to members’ personal needs by offering them affordable luxuries.
Nowhere is this strategy more evident than in consumer electronics where Sam’s Club has been an early adopter of offering the latest and greatest technology items to serve member needs in the areas of entertainment, productivity and mobility.
“We are going to have an awesome year in electronics,” said Seong Ohm, Sam’s Club’s senior vp of merchandising, as she stood in front of a display of large-screen, flat-panel televisions positioned near the club’s entrance.
To ensure that is the case, Ohm detailed how Sam’s Club is experimenting with an installation service provided by a third party at more than 100 stores and is also taking measures to better educate customers and Sam’s employees about the technology. A crawl on the screens provides information to aid customers in the decision-making process and employees are being given increased training so they can better answer basic questions about the technology.
“I would like for us to be able to answer some common-sense questions,” McMillon said.
Doing so could result in fewer returns as customers better understand the complexity and requirement of properly installing a high-definition set. It could also enable Sam’s to maintain its satisfaction guaranteed policy, as it has done, even though competitors such as Costco have backed away from the liberal return policy.
Another key area where Sam’s is intent on demonstrating its value proposition and appealing to personal needs is the jewelry department adjacent to electronics. The senior vp of merchandising responsible for the category, Patty Warwick, indicated the jewelry case at the Bentonville club is larger than normal and features an expanded assortment of high-end goods.
“We are particularly proud of the quality we offer in diamonds,” Warwick said. “The strength of our business is probably less than $1,000, but we do a significant amount of volume above that amount.”
If members already have a flat-panel television and all the jewelry they need, then senior vp of merchandising for the fresh areas, Charles Redfield, is ready to tempt them with indulgent foods, quality meats and a more interactive experience.’
“Our members have told us they want to have more interaction,” Redfield said.
Sam’s made its cake decorating area more accessible, improved access to butchers and created a prepared foods area at the Bentonville club that allows for the testing of items to see whether they should be rolled out to other clubs. He also noted that Sam’s is rethinking the size of some items based on member feedback about waste.
“It’s not all about bulk,” Redfield said, gesturing to a 24-ounce, chocolate ganache cake that sells for $6.72. “The success we had with this item has been phenomenal.”
While Sam’s Club has a lot on its plate from a merchandising standpoint, the other major message shared with the media and analysts was the emphasis on efficiency and sustainability. The concepts go hand-in-hand as company executives have often explained that sustainability measures that are also good for business benefit everyone. That is the case with Sam’s Club’s sandwich bale program. Senior vp of marketing, research and insights, Matt Kistler, standing at the rear of the club, demonstrated how employees collect shrink wrap and other plastic packaging and turn it into a compressed bundle shrouded in plastic. Last year, in the first year of the program, Sam’s collected roughly 56 million pounds of shrink wrap that was sold for recycling and then turned into new packaging for consumer products.
Hooker names upholstery head
MARTINSVILLE, Va. Hooker Furniture has appointed Alan Cole to the new position of evp of upholstery, in which he will oversee the operations of Hooker Furniture subsidiaries Bradington-Young and Sam Moore Furniture.
In addition to overseeing the operations of Sam Moore and Bradington-Young, Cole will help develop further growth plans for Hooker’s imported accent chair product line. He also will be involved in strategic planning for HFC and will oversee any future acquisitions of upholstered furniture operations.
Cole, who has held senior executive positions at leading upholstered furniture companies including Broyhill, Berkline and Schnadig, “has the expertise in upholstery that uniquely qualifies him to help us realize one of our strategic objectives, which is to become a more important and complete upholstered furniture resource,” said Paul Toms Jr., chairman, ceo and president of Hooker Furniture.
Best Buy selects new ad agency
MINNEAPOLIS Best Buy announced Thursday that it has chosen BBDO New York as its advertising agency for the Best Buy brand. The selection of BBDO follows a multi-month-long review for the Best Buy brand account, which was previously handled internally.
“We believe this partnership with BBDO New York will enable us to support the company’s aggressive growth goals and to build and enhance our capabilities,” said Ruby Anik, Best Buy’s senior vp of marketing communications. “We are excited to leverage BBDO’s creative expertise, brand experience and spirit of collaboration in further differentiating Best Buy as the consumer’s trusted guide to technology solutions.”
BBDO New York’s scope of work will include account planning, ad strategy and execution, and media and consumer connection planning. Estimated billings, as measured by media spending, will be $170 to $200 million. The firm will begin work immediately on internally-focused projects supporting Best Buy’s brand position.
In addition, Best Buy will expand its relationship with Crispin, Porter + Bogusky beyond Geek Squad to partner on business development and in-store activation opportunities for the Best Buy brand.