Sam's upgrades new club prototype: highlights features include digital media center, wine kiosk, Sam's Sound - Sam's Club; new prototype store in Houston, Texas - Brief Article

DSN Retailing Today, August 12, 2002 by Mike Troy

HOUSTON -- Sam's Club has upgraded its new store prototype at a location less than five miles from downtown Houston roughly one year after introducing the 150,000-square-foot prototype in a Dallas suburb.

This new Houston club, one of 10 Sam's units that opened Aug. 1, closely resembles the design of a Sam's that opened in Plano, Texas, last year. Both clubs have a similar layout that moves forward the uniquely configured frozen and refrigerated sections, while creating a large perishables section at the rear of the store. Both stores contain Sam's colorful new signing package, first introduced at the Plano location to launch the "Sam's Club: It's a big deal" slogan.

However, the Houston club incorporates several new wrinkles designed to improve the club's appearance and presentation of merchandise, and to increase sales.

"This club is the most powerful box we have ever put up," president and ceo Tom Grimm told DSN Retailing Today. "We continue to enhance and improve our brand impression in apparel and throughout the club."

In addition, Grimm highlighted the club's new digital media center, the wine kiosk, Sam's Sound and a reconfigured jewelry and collectibles case as upgrades from the Plano prototype.

The media center is the feature that will strike most customers first since it is located just inside the entrance in front of the consumer electronics department. What Sam's has done is pull together related categories and services typically found in its clubs, such as the wireless communications kiosk and one-hour photo lab, and combined them with small consumer electronics items, such as laptops, video games, cameras and PDAs. A four-sided bullpen similar in concept to Sam's jewelry fixture displays merchandise and is staffed by club personnel. There also is a computer kiosk on one corner of the bullpen so customers can access Samsclub.com.

The kiosk concept also was extended to the wine department in an experimental move designed to increase sales by helping customers learn more about the wine they have selected or are considering buying. The wine kiosk has a small footprint so it doesn't take up much space in the club's sprawling wine department. It allows customers to scan a bottle and read about its characteristics, ratings and flavor description. The kiosk was functioning smoothly during customer demonstrations on grand opening day and prompted R. Michael Mondavi, chairman of Robert Mondavi, to note, "It is spectacular and it is fast."

Mondavi attended the grand opening to sign bottles of wine, some of which cost upwards of $75 per bottle, and he believes the kiosk could be a useful tool to increase sales.

"Every survey shows that the biggest impediment to wine sales is the consumer is intimidated," Mondavi said. "If they can get information in a private way that answers their questions, it will make them more comfortable, and the minute they get comfortable they are going to enjoy more wine."

Not far from the wine department near the perishables area, customers find themselves attracted to another new feature called Sam's Sound. A series of large televisions positioned on endcaps and suspended from the ceiling in high-traffic locations feature video clips, messages from Sam's Club and advertising from suppliers. The concept is similar to the in-store television network in place in Wal-Mart stores for several years now, which allows the retailer to broadcast concerts, such as the Britney Spears event on July 27, or sell advertising to suppliers looking to influence in-store decision-making. So far, the new Houston club is the only unit with Sam's Sound.

Although not a new department, Sam's continues to upgrade its jewelry presentation. When operation of the jewelry department was brought in-house more than a year ago, Sam's Club expanded its jewelry assortment and displayed the merchandise in new black jewelry cases that replaced the old blue fixtures that were operated on an outsourced basis by Jan Bell Marketing, now known as Mayor's Jewelers.

"We put towers on the corners and pulled the collectibles out on the floor in a separate display. It is a more powerful presentation," Grimm said of the new jewelry display.

With the opening of the Houston club and nine others the same day, the total number of openings so far this year is 29. Another 21 units are expected to open during the remainder of 2002, as Sam's looks to achieve its goal of opening 50 clubs this year. Since roughly half of those units will involve the relocation of older clubs, Sam's should end the current fiscal year with about 525 units. The addition of new clubs and same store sales growth also will allow the division of Wal-Mart Stores to surpass annual sales of $30 billion for the first time.