Sam's Club eValues

eValues.jpg
For a long time Sam's Club has resisted the use of coupons, unlike their competitors BJ's and Costco. I think they wanted to reinforce that prices were already as low as possible. But this summer Sam's rolled out a new program called eValues, but its only available to "plus" members. Regular members pay a $40 annual fee while plus members pay $100. I think this program aims to convert more regular members to plus members.

A member's purchase history is analyzed to determine what coupons are most applicable, then the offers are presented to the member via website, in-store kiosk, and mobile phone. The member then selects the coupons to be "loaded" on their membership card. The coupons are automatically applied at checkout, without having to use scissors at all.

Apparently the coupons are from product manufacturers, so the coupons don't impact Sam's margins. Traditional coupon programs try to get consumers to try new products by enticing them with discounts. With eValues, they seem to be offering coupons for the products you're going to buy anyway. That's a win for the consumer but not necessarily for the manufacturer. This reinforces my hypothesis that the goal is really to increase plus membership.

Nevertheless, I think the program will be very popular.

Comments:

David,
How can Sam's Club offer manufacturer coupons without it impacting margin.
When the manufacturers provide Sam's Club (or any other retailer) with coupons they have to account for the cost of the redemption on those coupons. If Sam's Club has already negotiated the lowest possible cost how can the manufacturer afford to give away more margin? The only option for the manufacturer is to increase the cost of goods to the retailer. It just doesn't make sense.

Posted by Brian on September 20, 2009 at 12:22 PM CDT #

Good points, Brian. My point is that the discounts offered are subsidized by the manufacturer, and the technology keeps redemption costs low. Yes, eventually the manufacturer will get his margin, but perhaps at the expense of some other retailer's customers.

Posted by David on September 22, 2009 at 08:17 AM CDT #

I don't get it - why do I have to pay Sam's Club extra money so they can give me coupons? Coupons are free in every other store. All the more reason to switch to Costco!

Posted by Maura on September 07, 2010 at 06:45 AM CDT #

I found the web site trying to find the other e-value discounts the lady said we could find online. I have not figured what to select in order to see and print the items. Could you let me know what I should do now?

Posted by Sharon on May 14, 2011 at 12:59 PM CDT #

Sams Club is trying to push the Plus Club Memberships and Credit Cards to the point of insulting and harassing the customers. When I go to Sams I only buy the things I cannot get at Costco. It's Costco first for me and I have both memberships. Sams needs to let the customer shop and pay without being harassed at the registers to upgrade or take out the Plus Club. I have been asked for several months at the store and by mail to renew my membership which still has 3-4 months before it expired. I am not sure but I think you are losing time on the yearly membership you already have (someone needs to check it out). Ask a cashier what the color coded balloons mean at each register and then take pity on the cashier who doesnot have any she will soon be without a job. Whatever happened to the SAMS CLUB or SAMS WHOLESALE CLUB that actually cared about the customer.

Posted by guest on June 06, 2011 at 03:58 AM CDT #

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David Dorf, Sr Director Technology Strategy for Oracle Retail, shares news and ideas about the retail industry with a focus on innovation and emerging technologies.


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