Executives with Wal-Mart's warehouse division say the recent nationwide rollout of its Scan & Go mobile application is an example of the retailer's ability to move nimbly in a fast-paced environment.
Sam's Club Executive Vice President of Operations Don Frieson and Vice President Darshan Gad highlighted the new feature during a discussion Friday at the Northwest Arkansas Tech Summit in Rogers. About 1,400 attended the third year of the event, which featured a lineup of speakers and sessions centered on technology, innovation and digital disruption.
Scan & Go, which allows Sam's Club members to skip the checkout lines by using smartphones to scan and pay for items, was the product of what Gad called the company's "rapid test and learn" philosophy. The application began as an idea from two engineers to help solve a problem for consumers and, through collaboration, was built, tested and rolled out nationwide to every Sam's Club in about a year.
"We went after a pain point," Frieson said. "The pain point in the club business on the weekend, after 2 p.m., are the lines. Oh my God. I don't have enough checkouts for all the people that want to check out."
Sam's Club members who download the Scan & Go app can pull out their smartphones and scan the barcode of items before adding them to their baskets. When customers are done shopping, they can pay for the items using the app's mobile payment option and show the digital receipt to an employee stationed by the front door on their way out.
Sam Club's first began testing Scan & Go at two of its club locations, including the Bentonville store, in the summer of 2015. The company expanded the test to more stores last February before last month's nationwide rollout at more than 650 Sam's Clubs.
Gad considered the speed of the process an accomplishment because of the retailer's size. He said it often takes a long time for large companies to accomplish something they want to do quickly. In fact, he said "it takes so long to get where you want to be that oftentimes where you want to be is now changed."
"But we're focused on trying to build a product as quickly as we can and then we try it," Gad said. "We may try it [in] one club. We may try it in five clubs. We're very quick to monitor how it performs, but then equally quick if we see success at scaling very, very quickly."
Being more nimble and efficient is a priority for Wal-Mart and Sam's Clubs as they try to maintain their stature within the changing retail landscape.
Wal-Mart laid off 450 employees at its home office last October, closed 269 stores worldwide in January, and has invested billions in e-commerce, technology and its employees to improve overall operations. Wal-Mart also is in the process of transforming itself into a retailer that will look more like an e-commerce and technology company, according to Chief Executive Officer Doug McMillon.
Becoming a leader in digital innovation is vital for the retailer, which said it will continue to invest heavily in technology, e-commerce and other customer services as it tries to close the gap with e-commerce leader Amazon.com. Gad said it's "not about following, it's about leading" at Sam's Club as well in its efforts to drive sales.
Sam's Club Chief Executive Officer Rosalind Brewer said innovation is one of three pillars of the company's transformation, joining efforts to improve the quality and value of merchandise and to increase its membership count. Brewer believes Sam's Club is making strides one year into the process with e-commerce sales up 20 percent. The club's pickup business -- a service that lets customers order items online and pick them up without having to step foot in the store -- is up 31 percent year-to-date as of August. She said net sales for the first half of the fiscal year were up 1.6 percent.
Brewer described the nationwide addition of Scan & Go as a "game-changer," citing internal data that indicate 80 percent of members who try the service use it again within 90 days.
"We really like those numbers," Brewer said. "They're visiting the club more often because they can get in and get out more quickly."
Carol Spieckerman, a retail consultant and president of Bentonville-based Spieckerman Retail, said Scan & Go has benefits for both the retailer and its customers -- even those who don't use the service.
"Sam's shoppers benefit from the convenience and time savings," Spieckerman said in an email. "Walmart/Sam's lowers staffing costs and reduces wait times for traditional shoppers. In essence, Scan & Go shoppers are helping Sam's build loyalty with members who don't use the app as they enjoy a more efficient checkout experience."
Gad and Frieson said Sam's Club will continue to evaluate ways it can be "disruptive" and find ways to move faster, pointing to other ways in which it has embraced change as retail continues to evolve.
Gad believes Sam's Club was successful over the summer in tapping into the Pokemon Go craze by building a marketing campaign in a matter of days, promoting it and opening the club to players, even if they weren't members.
He said Sam's Club also highlighted a tech-based solution to help keep traffic in its Bentonville store steady during remodeling work last spring.
The retailer set up a station where customers could don virtual-reality goggles to take their minds off the dust and get a detailed and interactive look at what the club would look like when the work was completed. Frieson said sales in stores typically dip during remodeling because of the mess, but the Bentonville store maintained its sales figures with the help of virtual reality.
It's a tool Sam's Club will consider when other stores are remodeled nationwide.
"We were able to turn a potential negative experience into an engagement opportunity," Gad said.
Business on 10/08/2016