In soda, it’s Coke versus Pepsi. In trucks (and auto racing) it’s Chevy versus Ford. But in retail, the biggest of the Big Box battles is waged between Sam’s Club and Costco. When both brands are doing well, it’s a sign things are moving swimmingly in the economy as a whole. But that doesn’t mean there isn’t a front-runner.
As we come closer to the end of 2015, it’s clear Costco is leading the race by a fair margin. Recent market reports have Costco stock surging 18 percent while Walmart has dropped 31 points. Even though shoppers seem to “love” both brands, Costco is the clear favorite.
Until now, at least. The most recent financials show Costco stumbling as growth has fallen short of projections and store sales continue to decline.
If Sam’s wants to make a push, now would be the time. They may start by touting the difference in membership costs. Most people who don’t belong to both “clubs” may not realize this, but it’s ten bucks cheaper to join Sam’s Club, $45 to Costco’s $55 for the year.
And there are other opportunities. While most shoppers say Costco seems to have better quality and selection, these are specific areas in which Sam’s can improve.
Better still, Sam’s may be able to up their merchandise game and not change a thing at the store. As online sales become more popular, the buy online/store pickup option becomes increasingly popular. Plus, since most customers now shop online even before they come into the store to buy, Sam’s can filch some customers from Costco by making their online presence easier to navigate and making it easier to find specific products online. Consumers have zero tolerance for frustrating websites, and they have strong loyalty to interfaces that make both shopping and buying easier.
Another opportunity: the emerging digital marketplace. With everyone getting email and texts on their phones now, retailers, particularly those with pockets as deep as Sam’s and Costco, should be investing heavily in digital marketing and “smart” consumer interaction powered by advanced big data technology.
Whatever they choose to do, Sam’s needs to act while Costco appears vulnerable. They may not get another shot for a while.
