Making good on an announcement it made in January, Sam’s Club is converting a second shuttered store location into an ecommerce fulfillment center, this time in Chicago. The first one opened in Memphis in June.
The company said earlier this year it was closing 63 of its 660 Sam’s Club locations, with plans to eventually convert 12 of them into FCs, a move that has been talked about but not acted on by other retailers as the industry continues its rapid evolution.
Store-to-FC conversions, which take about four months, are also on tap at former Sam’s Club stores in Florida, California and the Northeast in months to come. The Chicago location will be used as a regional fulfillment hub for the upper Midwest.
The move comes as Sam’s Club is seeing strong ecommerce growth, gaining 25% in the first quarter and fueling a 5.2% increase in comps, excluding fuel and tobacco. Earlier this year Sam’s Club began offering unlimited free shipping for its Sam’s Plus members, who pay $100 a year – what Amazon charged for Prime before boosting it to $119 annually.
MCM Musings: Now that Walmart’s club sales unit is experiencing rapid growth online – as is the parent – these new store-cum-fulfillment centers will position it for still more ecommerce growth. Also, since this Rubicon has been crossed successfully in two places with a quick ramp-up, other retail chains should follow suit at shuttered store locations.