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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Juniper: Global E-commerce sales to rise 10% this year

BY Deena M. Amato-McCoy

Online spending continues to climb — and alternative payments are driving this growth.

The value of global consumer spending on remote payments for digital and physical goods will surpass $3.3 trillion this year — up 10% on 2017’s total of $3 trillion, according to “Mobile & Online Remote Payments for Digital & Physical Goods: Opportunities & Forecasts 2018-2022, from Juniper Research.

According to the data, alternative payment mechanisms will comprise an ever-increasing proportion of online spend. For example, PayPal already accounts for 20% of mobile and online physical goods transactions made outside China. Meanwhile, the success of Alipay and Weixin Pay within China means that these two players combined now account for 45% of global payment volumes.

There is also a significant opportunity for more nascent options, such as the various original equipment manufacturer (OEM)-Pay solutions and carrier billing — payment options created by one company and marketed by another. For example, Amazon recently adopted an OEM-Pay option in Japan for physical goods purchases, the report said.

It is not all good news however, as there are still major pain points for merchants and consumers to overcome. For example, European merchants need to be aware of implications of new regulations — and the upgrades required to comply. One is the PSD2 card-on-file regulation that requires consumers to ‘white-list’ or grant approval for their payment details to be stored. It is claimed that Secure Customer Authentication (SCA) obligations could potentially adversely impact conversion rates by increasing friction at checkout, the report said.

The study also revealed that retailers were struggling to resolve issues around customer identification within the broader commerce framework.

“Payment processors and other key stakeholders need to work closely with merchants to ensure they can recognize individual consumers, regardless of device and whether they are purchasing online or offline, to deliver the optimal experience across the retail lifecycle,” said Dr. Windsor Holden, head of forecasting & consultancy at Juniper Research.

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The 10 most valuable brands are…

BY Marianne Wilson

Amazon has replaced Google in the top spot in an annual ranking of the world’s most valuable brands.

The e-commerce giant’s brand value increased by 42% on a year-over-year basis, to more than $150 billion, according to Brand Finance Global 500 report. The brand consultancy reviews marketing investment, stakeholder investment, and business performance in determining brand value.

For the first time since the inception of the Brand Finance study, technology brands took all top five places in the ranking. Amazon was followed by Apple, Google, Samsung and Facebook.

Apple’s brand value rebounded to $146.3 billion after a 27%-decline last year. But its future looks bleak, according to BrandFinance.

“Apple has failed to diversify and grown over-dependent on sales of its flagship iPhones, responsible for two thirds of revenue,” the report said. “With the advent of emerging world brands like Huawei, Apple’s increasing focus on what are effectively luxury products may cost the brand a fair share of the global mass market, limiting the potential for brand value growth.”

Google came in third after losing the top spot to Amazon. It had a relatively slow brand value growth of 10% to $120.9 billion. Google’s online ads generated more traffic than expected as aggregated paid clicks rose by 47% in its most recent third quarter, boosting revenues. However, to compete with the world’s most valuable brands, presenting a solid performance is not always enough.

“Google is a champion in internet search, cloud and mobile OS technology but, similarly to Apple, its focus on particular sectors is holding it back from unleashing the full potential of its brand,” the report stated. “Google’s investments in self-driving cars and handsets still lack the scale and audacity demonstrated by Amazon’s new ventures.”

Rounding out the top 10 were AT&T (brand value of $82.4 billion), Microsoft ($81.2 billion), Verizon ($62.8 billion), Walmart ($61.5 billion) and China’s ICBC ($59.2 billion).

More information about the methodology as well as definitions of key terms are available in the Brand Finance Global 500 report.

The dominance of digital is set to grow even more in the coming years as other brands make their way up the Global 500. Google-owned YouTube more than doubled its brand value to $25.9 billion, jumping 70 places to 42nd. Chinese technology brands, taking advantage of captive market conditions, can also boast high brand value growth, with Alibaba (12th), Tencent (21st), WeChat (49th), Baidu (57th), JD (65th), and NetEase (121st), going up by an average of 67% year on year.

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