Wal-Mart's Sam's Club Reaches Out to Affluent Moms

19 February 2007

BENTONVILLE, Arkansas: Change is the order of the day at the globe's largest retailer - its latest manifestation being at Wal-Mart's members-only warehouse sales operation, Sam's Club, where plans are under way to extend membership beyond its present target market of small businesses to affluent families.

"If we are to expand Sam's Club at the rate we expect, we are going to have to broaden our appeal beyond small business owners," evp of merchandise and replenishment Greg Spragg told a Citigroup investors' conference last week.

Sam's Club, it seems, has made an earth-shattering discovery: mothers account for 80% of US household shopping! As the moneymen reeled in amazement at this astounding revelation, Spragg explained that the club's new strategy is to inveigle America's moneyed Moms through its utilitarian portals.

There are two grades of membership for non-business users: Advantage Plus at $100 annually and plain ornery ol' Advantage at forty bucks.

Both grades include two annual membership cards - one for the applicant, the other for a second adult household member. Also a Discover discount card offering cashback (respectively 2% and 1% according to membership grade) on all purchases at Wal-Mart and other participating outlets.

The pricier grade also includes a complimentary health and medical discount card with a claimed value of $105.

Spragg admitted that Sam's Club needs a marketing fix to inject new vigor into torpid sales growth. In January, Sam's reported a 3.4% year-on-year increase which, although notably better that its parent's 1.9% rise, "is not a number that we're happy with".

Data sourced from Wall Street Journal Online. additional content by WARC staff, 19 February 2007