Walmart-owned Sam’s Club is launching an Amazon Go competitor

Scan and go!
Scan and go!
Image: Reuters/Rick Wilking
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Walmart is leaning on subsidiary Sam’s Club in its battle against Amazon.

The members-only warehouse retail chain is opening a location in Dallas, Texas, that will let customers skip the checkout line by scanning and purchasing groceries with an app, Sam’s Club announced on Oct. 29. Customers will load the “Sam’s Club Now” app when they enter the new store and use it to navigate aisles, view shopping suggestions, and add items to their mobile cart before placing them in their physical one.

The Dallas Sam’s Club is an obvious response to Amazon Go, the chain of cashierless convenience stores that Amazon is rapidly rolling out, after the first location opened in Seattle in January. Amazon has so far opened six Amazon Go stores in Seattle, San Francisco, and Chicago, and has plans for three more, according to its website. Bloomberg reports that the company is potentially interested in opening as many as 3,000 Go locations by 2021.

As for Walmart’s modernization efforts, its Sam’s Club Now concept grew out of the “scan & go” app that Sam’s Club launched two years ago. According to a company press release, 90% of customers who tried the app used it again on their next trip, and that regular use of the app was up 40% this year. Members can also use the app to place an order and pick it up within an hour.

The Dallas store location will be 32,000 square feet, a quarter of the size of the average Sam’s Club. The store’s relatively compact size will make it easier to test new technologies, such as electronic shelf labels with prices that update automatically, CEO Jamie Iannone said. Sam’s Club plans to eventually install more than 700 cameras in the store to help manage inventory and optimize the store’s layout.

In January, Walmart abruptly closed 63 Sam’s Club stores, affecting about 9,400 employees. The company said it would convert up to 12 of the locations into e-commerce distribution centers to support, with two opening to date. Customers who shopped at the shuttered stores had their $45 annual membership fees refunded.

Sam’s Club did $59.2 billion in sales in the fiscal year ended Jan. 31, 2018, up 3% from the previous year. Walmart US reported $318 billion in sales for that same period. In the most recent quarter, ended July 28, sales at Sam’s Club locations open for at least a year increased 5%, the strongest performance in six years.

Correction: An earlier version of this post said Walmart converted 10 shuttered Sam’s Club stores into e-commerce distribution centers. The company said it would convert up to 12, with two opened to date.