There’s a reason people pay to shop at warehouse clubs like Sam’s Club and Costco. They expect the membership to pay for itself.
That usually starts with lower prices on groceries, household essentials, and other products bought in bulk. But these days, the competition between the two biggest warehouse clubs is about much more than what’s sitting on the shelf.
It is also about how well each company understands and serves its members.
Walmart is now making a major investment in that area at Sam’s Club.
The company recently shared that it will bring Scintilla, its first-party commerce intelligence platform, to Sam’s Club.
The technology is designed to give merchants and suppliers a much clearer picture of what members are buying and how they shop across physical and digital channels.
That could ultimately make the membership more valuable.
Sam’s Club wants to know what members want next
The idea behind Scintilla is fairly simple. The more information Sam’s Club has about its members, the better decisions it can make about what to sell and how to sell it.
The potential benefits are significant. Better data could help Sam’s Club stock the products members actually want, reduce problems with availability, and identify opportunities for new products or services.
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“Everything starts with the member and understanding what they need, what they love, and what they’re looking for next,” Sam’s Club Chief Merchant Myron Frazier said in the announcement.
He added that Scintilla should help merchants and suppliers “listen better and act faster.”
Scintilla is expected to be available to Sam’s Club merchants and suppliers beginning in 2027.
Costco has a similar challenge
Sam’s Club isn’t operating in a vacuum.
Costco has spent decades building one of the strongest membership models in retail, and the two companies are constantly competing for households looking to save money on everyday purchases.
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There are some notable differences between the clubs, though.
Costco’s basic membership currently costs $65 a year, while Sam’s Club’s basic membership typically costs $60 per year following a recent increase.
Costco also has a reputation for its Kirkland Signature private label and a more curated assortment, while Sam’s Club has increasingly emphasized convenience and digital tools.
But both companies rely heavily on membership fee revenue, and that’s what makes member data particularly important.
If Costco learns that its members are looking for a particular product, service, or shopping experience, it can use that information to make the membership more attractive. Sam’s Club is now taking a big step to get better at doing just that.
A core part of Sam’s Club strategy
Accessing better member data aligns with Sam’s Club’s general strategy, which has historically been quicker to embrace technology than Costco.
Sam’s Club, for example, has been leaning on Scan & Go technology for years to ensure a smoother checkout process, CNBC reported, whereas Costco has been much slower to improve in that area.
That’s long given Sam’s Club an advantage over its biggest competitor.
Scintilla should help Sam’s Club build on that advantage and better target its members’ needs.
And if Walmart can turn that data into more relevant products, increased availability, and stronger value, it gives Sam’s Club another way to compete with Costco for the most important thing of all — membership fees.
Maurie Backman owns shares of Walmart.
