When Sam’s Club announced last month that it was closing 63 stores as part of its strategy to overhaul its business, many shoppers were outraged over the loss of jobs and memorable shopping venues.
On Wednesday, the warehouse club, which is a unit of Walmart, revealed more details about its strategic shift — one that is based, predictably, on increasing its e-commerce sales.
Shoppers who pay $100 a year for a Plus membership will have free shipping on almost any item, Sam’s Club said. The perk is the company’s attempt to catch up with Amazon’s wildly successful Prime service, which also offers free shipping for about the same annual fee.
The company also said it was converting a former Sam’s Club store in Memphis into a fulfillment center for online orders, and planned to open other e-commerce facilities in Florida, California, the Chicago area and the Northeast in the coming months.
The changes are part of a broader strategy that Sam’s Club executives said involved closing underperforming stores and focusing on core customers — typically a family making $125,000 a year that lives in the suburbs and may own a small business.
The company is also reducing its membership levels from three to two: the Plus membership and the $45 Club membership, which includes discounts on services like flat tire repairs.
Sam’s Club executives said in a call with reporters that it was still too early to say how many of the thousands of workers who had been displaced by store closings would find new jobs at the company.
Last month, social media erupted when shoppers showed up at Sam’s Clubs around the country that had been closed without warning. On the same day, Walmart announced that it was raising starting wages and handing out bonuses. The timing of the announcements prompted criticism that the retailer was trying to distract from the bad news at its Sam’s Club operation; the company said they were unrelated.