TECHNOLOGY

Sam’s Club launches free shipping—and overhauls membership program

BY Deena M. Amato-McCoy

Sam’s Club is making changes as it looks to compete head-on with rivals Amazon and Costco.

The warehouse club chain is rolling out free shipping on “most of the items” sold online, including nearly every Member’s Mark private-label item, with no minimum purchase required, the retailer said in a blog on its website. The news comes one month after the retailer abruptly closed 63 stores, and said some of the shuttered locations would be turned into fulfillment centers.

Sam’s Club also added that its efforts will be supported by tighter supply chain operations. The company is on track to open its first e-commerce fulfillment center in Memphis, Tennessee, with the first packages expected to ship in early spring.

Looking ahead, the retailer plans to bolster this network “in the back-half of the year,” with more distribution centers. Other regions being considered for fulfillment centers include Texas, Central Florida, the Mid-Atlantic, Southern California, Chicagoland, and the Northeast.

“Our Memphis center will teach us a lot as we build out this new e-commerce supply chain,” Jamie Iannone, CEO, SamsClub.com and executive VP of membership and technology, said in the blog.

These new distribution centers will be augmented by up to 12 of the closed locations that will be converted into regional e-commerce fulfillment centers.

Sam’s Club is also “simplifying” its membership structure. Going forward, there will be two levels of membership: Club and Plus. Club (formerly Sam’s Savings) will be $45 a year, and Plus will be $100 annual fee. The company is also lowering the fee for additional Club memberships to $40.

These rates take a direct hit at Amazon, which charges $99 a year for its Prime membership. However, Sam’s Club’s new shipping program does not offer free two-day shipping.

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