Sam’s Club is seeing the highest growth rates from Gen Z and millennials, Walmart CFO John David Rainey said at Wednesday’s Bank of America London Investor Conference.
Over a two-year stack, Gen Z membership grew 63% and millennials grew 14%.
Part of the reason Gen Z in particular may be seeking out Sam’s Club is because, as a group, they are extremely cost-conscious, according to Hana Ben-Shabat, founder of Gen Z Planet. “Being the children of the Great Recession and the graduates of a global pandemic, they learned that financial security is vital,” she said via email.
Overall, the retailer in Q1 saw its U.S. stores reach a “record” level of member numbers, resulting in membership income growth of over 13%. Sam’s Club has also reported 11 straight quarters of double-digit comparable sales growth and stated that its U.S. e-commerce channel is profitable.
The digital experience of the club store is resonating with this younger customer base, according to Rainey. Sam’s Club found that one in three of its members uses its Scan & Go technology on a regular basis, and the company has seen a 50% increase in its adoption over the past three years.
“I would argue that’s got to be one of the highest digital penetrations in an in-person experience that exists out there,” Rainey said. The tech, which debuted in 2016, allows shoppers to select items, pay and skip checkout lines. The retailer is also rolling out receipt verification tech that will be in all stores by the end of the year.
“We are not … deploying tech for tech’s sake,” Todd Garner, chief product officer at Sam’s Club, wrote in a company blog post at the start of the year. “We’re constantly thinking about member pain points, and it’s all about focusing technology on Member needs and unlocking unparalleled convenience and connection.”
Those tech advances are specifically driving Gen Z interest, according to Ben-Shabat. “What truly differentiates Sam’s from other clubs is their seamless integration between online and offline,” she said. “Its in-store technology offers convenience and speed, and its overall in-store experience [are] all aspects that are extremely important to Gen Z ‘digital’ shoppers.”
The club retailer is increasing its brick-and-mortar presence, too, and expects to add 30 stores to its fleet in the next five years.
There are international opportunities as well, particularly in China, where Sam’s Club has two of its best-performing stores in the world. The club format “really resonates with the Chinese consumer,” Rainey said. The retailer’s China member count grew 25% in the first quarter.
The company is also tapping into its membership in other ways — namely to help with testing. Sam’s Club recently announced a program that allows members to co-create products for its private label, Member’s Mark. Participants opt in to try products and give feedback on its owned label prior to their availability at stores so the retailer can better personalize items and enhance its member experience.
“Our approach goes way beyond traditional focus groups and surveys, with true engagement that will shape the future of retail by creating more personalized experiences for our members,” Megan Crozier, chief merchant for Sam’s Club, said in a statement at the time of the announcement. “We see the opportunity to include all members in the future.”
In 2022, warehouse clubs and supercenters delivered over $626 billion in revenue in the U.S., according to a recent Statista report. Last year, Sam’s Club’s total revenue was $84.3 billion.
