Name: Why Costco is Performing Better than Sam's Club
Uploaded: 2016-05-24
Duration: 3 min 3 s
Description: At least for now; Roz Brewer explains.

Walmart is the king of retail, right? And Sam's Club is actually number two to Costco. In multiple ways in terms of size of the business In terms of kinda the wonderful demographics, Costco has a higher income customer. Costco is faster growing. So, how do you move from the number one mentality to the number two mentality? That's a very, very good question. You know it's It's difficult when you are sort of a baby business in the big mothership, right, in getting the attention and focus that you want. But there are some little openings that we're going after for Sam's, so, some of the transformation we've been under at Sam's Club is, one is around this digital piece in retail. And we have far outpaced Costco in digital retail. Just this past week, we opened up our first new building that has probably eight to ten different digital executions within the building, which are things like Club pickup, a mobile app that'll allow you to purchase online, pick up the next day, pick up within two house, we know when you entering our parking lot. As soon as you hit the parking lot, We know to have your order ready, and so, a real digital presence that Costco has said they're not going to invest in. Now, why is that? Sam's Club really is ahead on the digital front, and it just surprises me, reading about this. So, if you study Costco, they have won because of the discipline in their model, and they're not willing to move away from discipline. And they do the same thing. For every club they open anywhere around the world. And the majority of the merchandise is the same. If you go to one of their stores in Asia, it would look just like one of the stores in California. They differentiate a little bit, depending on the demographic. But probably no more than about 5 or 6 %. So they've got a very repetitious model for their success. But I will tell you that what's happening in retail. I worry about if that's good enough for the long haul. And for Sam's, we're trying to think about how do you build this thing for the long haul. Not for just today. Not for just tomorrow. For the long haul. And it is around what we do. For instance, our membership team is not a marketing team. If you look at Costco, they do a lot of promotions in for us. Our membership team now, in the past 24 months, has converted to all decision scientists. They have a rare marketing background. I only have a couple of marketers. And all of it is analytics. Wow. And so we had to hire that group in order to really start churning Who are we going to bring in as a member. If we want to escalate that member how do we go after them and it's not for marketing, it's about knowing who shops your clubs and who you want to shop your clubs. So that's a big change for us. And it's those kinds of things that's long vision and I think we'll outpace them in the longer [ INAUDIBLE ]