Sam's Ready With Retooled Plan
Colleen Bohen -- Gifts & Dec, October 11, 2004
Sam's Club is after the really tough brands to acquire and is laying plans to divert some goods, according to executive vice president Kevin Turner.
Coming out of a period of readjustment in its business model that included a planned but painful "intelligent loss of sales," the focus remains on business customers and their business and personal needs. Turner made the case that Sam's has turned the corner, rationalizing its member base and now showing increases in earnings faster than increases in sales.
And while, over the past two years, Sam's has made strides in its direct sourcing relationships — including a product development department like Wal-Mart — diverting will become a part of the process.
"Phase Two says we're going to do some limited diverting," Turner said. "We going to create some intelligent, thoughtful and legal ways to divert merchandise and really tap in to other brands that we couldn't get. And I see a lot of analysts smiling because this is another issue where we're getting smarter about what we're going to do and what we're going to change to completely improve this experience."
Also incorporated in that is creating an urgency to buy, partially through treasure-hunt items. That necessarily means recognizing competition outside the club channel to include retailers like Pottery Barn and Williams-Sonoma, he said.
"We have to make sure this format runs as purely as it was when it was invented by Sol Price," Turner said.
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