13 April 2016
Securing China Retail Success
Sam's Club is one of the most popular retail outlets in the Chinese mainland city of Dalian. The store's management team attributes its success to six factors: premium goods, competitive pricing, quality of service, adherence to food-safety protocols, provision of free parking, and a reliable delivery service.
The outlet opened in 2012 and has prospered amid stiff competition from a number of overseas and domestic supermarket chains operating in the city, including Walmart, Carrefour, Tesco, Metro, Beijing Hualian and Dashang New Mart. It has also proved successful despite being the only retailer to require shoppers to pay an annual subscription.
For premium goods, Sam's Club has built its reputation by offering leading brands from around the world, as well as certified green and organic produce. In terms of non-food items, it also offers a range of innovative gadgets and high-tech items.
All such items are said to be competitively priced, thanks largely to the group's bulk-buying clout. Typically, many of its goods are also sold as large economy-size multi-buys, offering a distinct price advantage over smaller packs. The group capitalises on these advantages by aggressively marketing itself as offering considerable savings, particularly on items members need to buy on a regular basis.
In terms of service, each Sam's Club outlet is designed to be particularly welcoming, while also offering special incentives to corporate members. Its staff training also emphasises food safety, a protocol said to extend across its sourcing and logistics operations. The group adopts a strict code of cold-chain management, and has implemented rigorous procedures for farm-residue testing and the authentication of green and organic products. In its in-store bakery, bread is only sold on the day it has been baked, while all cooked food on display is replaced every four hours to ensure freshness.
Offering free parking has also proved a major lure for shoppers in Dalian, as well as at many of the group's other sites. The group provides free delivery within 48 hours for purchases over Rmb2,000, a service that has been a strong consumer draw.
The Dalian outlet is just one of the 800 Sam's Clubs operating across the world. A subsidiary brand of Walmart, the Fortune 500-listed retail group takes its name from Sam Walton, the founder of its parent company.
The first Sam's Club opened in Oklahoma in April 1983, and over the last 33 years, the group has grown to be among the world's largest members-only warehouse clubs, with more than 50 million paid subscribers around the world. In the mainland, the first Sam's Club opened in Shenzhen in August 1996. Today, there are 12 mainland outlets, including branches in Beijing, Shanghai, Shenzhen, Guangzhou, Fuzhou, Hangzhou, Suzhou, Wuhan and Changzhou, as well as Dalian.
The group's corporate mission is to be the world's most valuable membership company. To this end, it offers two types of membership – corporate and individual. Its corporate membership is principally aimed at small businesses and establishments, while individual membership is open to ordinary consumers and their families. Both corporate and individual members are charged an annual fee of Rmb150 for the primary card, with membership valid at the company's outlets around the world.
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