Dollar General debuted a new store called Popshelf about a year ago, aimed at wealthier, suburban shoppers who enjoy the hunt for a good deal.
The Tennessee-based discounter said Thursday that it now plans to have approximately 1,000 of the stores by the end of the 2025 fiscal year — including about 100 more locations that will open next fiscal year. It has 30 Popshelf stores in six states as of Oct. 29. It plans to open its first stores in Texas in the early spring.
News of the ambitious expansion plan comes as the retailer also plans to try out its first international market by opening 10 stores in Mexico by the end of fiscal 2022. Dollar General said it plans to open 1,110 new stores in the coming fiscal year, including Popshelf, Dollar General and the international locations.
Dollar General Chief Merchandising Officer Emily Taylor said in an interview that the retailer is speeding up expansion plans for the new store concept because of its popularity with customers. She said its average basket size and value is higher than at Dollar General’s namesake stores, though she declined to share numbers.
For the dollar store chain, Popshelf is a way to attract new customers and drive up profits. Its target customers are women who live in suburban areas and have an annual household income that ranges from $50,000 to $125,000, the company said. The stores are roughly 9,000 square feet and carry items such as home goods, seasonal decor and party supplies, including items from Dollar General’s private brands. Over 90% of the merchandise sold by Popshelf costs $5 or less, the company said.
Dollar General customers tend to live in rural areas, have a tighter budget and skew slightly older, Taylor said. Its customers have an annual household income of $40,000 or less. Sales at the dollar stores also have a heavier mix of grocery and snack items, which tend to be less profitable for the retailer.
Dollar General has more than 18,000 stores across 46 states. To drive growth, the retailer has been opening additional locations at a rapid clip. It is also adding fresh fruits and vegetables to more of its stores and expanding into health care. It hired its first chief medical officer in July.
Taylor said the idea of Popshelf was born as Dollar General worked on its nonconsumables initiative, a companywide effort to expand its store assortment to include more items such as home decor and party supplies, which began in 2018. She said the company saw an opening for a different store.
“We realized a standalone concept had a lot of merit, particularly as it related to providing a really exciting, joyful, engaging shopping experience in the small-box store,” she said.
That inspired Popshelf’s emphasis on colorful displays and frequent merchandise changes to make visits to stores feel like a “treasure hunt,” whether shoppers are looking for a gift, preparing for a party or decorating for the holidays, she said.
Depending on the time of year, its mix of goods includes toys, throw pillows, Christmas ornaments, pumpkin-shaped disposable paper plates, balloons, bath bombs and specialty food items such as hot cocoa and cheeses for a charcuterie board.
Home goods, in particular, has been a hot category, including decor and organizational items, Taylor said.
She said Popshelf stores offer customers an option to buy online and pick up in the store. She said the company will likely start shipping purchases to customers’ homes, too, so that people who don’t live near a Popshelf store can buy the products. She said it has gotten a lot of requests for that on social media.
Dollar General is also testing a store-within-a-store format. It has opened 14 smaller versions of Popshelf inside DG Markets, a format of Dollar General that is larger and has a wider selection of groceries, and it will add more.
Dollar General reported its fiscal third-quarter earnings on Thursday before the bell. It exceeded analysts’ expectations, with adjusted earnings per share of $2.08 on revenue of $8.52 billion. On average, analysts were expecting Dollar General to earn $2.01 per share on revenue of $8.50 billion, according to Refinitiv.
As of Wednesday’s close, its shares are up nearly 6% this year. The stock closed Wednesday at $222.79, bringing its market value to $51.98 billion.
The dollar store chain faces new challenges, as inflation weighs on profits. Its chief competitor, Dollar Tree, said last week that it would start selling most goods for $1.25 rather than $1 to cover rising freight costs.
Secondhand retail companies are finding success with shoppers focused on sustainability and hard-to-find items, while also avoiding the supply chain pressures being felt by traditional retailers.
Big box retailers like Walmart and Target have focused on keeping prices down, and have absorbed the increasing costs in shipping, labor, and materials for shoppers. Other retailers, like Macy’s and Kohl’s, have raised prices to keep up with the uptick in costs.
But resale companies The RealReal and ThredUp are playing up their secondhand supply chains, inventory levels, and pricing.
“While many retailers have been forced to raise prices due to inflation or supply chain pressure, we do not have the same level of exposure,” James Reinhart, CEO of ThredUp, said on the company’s recent third quarter earnings call.
ThredUp’s business is entirely sourced domestically from its users, according to Reinhart, and has no reliance on direct manufacturing for inventory.
“We have chosen to strategically lower prices in order to engage as many customers as possible during a time when consumers are feeling price pressure in many other parts of their life,” he added.
ThredUp’s prices averaged 15% lower in the third quarter compared to the same period last year. Reinhart said the company will continue to keep prices down through ThredUp’s domestic supply system.
The company reported record quarterly revenue of $63.3 million in its third quarter, up 35% year-over-year. It also had record numbers of active buyers at 1.4 million and a record number of orders at 1.3 million, growing 14% and 28%, respectively, year-over-year.
Julie Wainwright, founder and CEO of the RealReal, said after its third quarter earnings that the company’s inventory has exceeded pre-Covid levels, adding “we believe we are well-positioned from a supply perspective as we enter the holiday season.”
She also noted that the RealReal is shielded from the inflationary impacts other businesses are seeing.
The RealReal reported total revenue of $119 million in its third quarter, an increase of 53% compared to last year. There were 757,000 orders in the third quarter, up 38% year-over-year.
“Adjacent to the issue of reselling and all of the empty storefronts, I feel very strongly that retail is just changing,” said Tim Ceci, founder and president of Tim Ceci Retail Consulting.
Still, investors aren’t entirely sold on the outlook for these companies, even amid the supply chain issues around the globe for retailers. ThredUp’s stock has been volatile since its initial IPO pop this year, and after its recent earnings resulted in a one-day bounce, shares continued on a declining trajectory. RealReal received a boost from its recent earnings, but remains down near-25% this year.
But the broader consumer trends supporting the secondhand market do continue to serve as a secular tailwind for the niche.
New habits pushing shoppers towards resellers
In total, by 2023, the resale market is expected to reach $51 billion, according to a recent report from ThredUp.
The resale industry is growing 11 times faster than traditional retail, according to Carolyn Thomas, president and CEO of Aravenda, a consignment software company. This trend is likely linked to two factors: supply chain logistics and the consumer’s shift to a sustainable mindset.
It’s also being aided by younger consumers like Edwin Elliott, a 25-year-old Miami resident, who is scoping out old-school pieces online to complete trendy outfits. They can be difficult to recreate “without real vintage pieces,” Elliott said. “And there are so many resale shops online, so it has made it easier to buy vintage items.”
“Before you would have to go thrifting,” said Elliott, “you would have to sort through piles of stuff and hope that you find something worth buying.”
Thrifting, the antiquated term for resale, is all about the shopper having choices. And the web has provided that, says Ceci. “Gen Z is running after secondhand and reselling,” he said.
Etsy, the online business known for its handmade and vintage item marketplace, acquired the resale app Depop in July for $1.62 billion, showing “significant potential to further scale,” according to Etsy CEO Josh Silverman in a statement announcing the deal.
Etsy’s stock has outperformed the marker this year.
Depop, or the “resale home for Gen Z consumers” as Silverman described the marketplace, hosts 30 million users across 150 countries. Through its core messaging around environmental and ethical shopping, the resale brand is a huge attraction to the younger consumer.
“It’s about having choices,” Ceci said. And for the younger shopper who is looking for retro styles and a sustainable way to shop, “it is a viable way to have an exchange with a retailer or a brand,” he added.
Growing focus on new, unused items
The sustainability factor is an “added perk” for Elliott, but the main reason he shops resale is for the exclusiveness and online convenience.
These resale sites are not just providing a platform for sellers to sell off old goods. ‘New with tags’ or ‘new in box’ items are increasingly being sold through resale platforms, according to Thomas.
StockX, which launched in 2016 as the “Stock Market of sneakers,” the resale site has evolved to become a hub for users to buy and sell new high-ticket and hard-to-find items from clothing, handbags, and electronics. In April, StockX completed a new round of funding that valued it at $3.8 billion, signaling the “broad recognition and excitement” for the company in the long-term, StockX CEO Scott Cutler said in a statement.
Through resale sites like Depop, consumers can resell limited items that may have sold out and are no longer available directly from the retailer – a common occurrence, according to Elliott, “so, it’s hard not to buy off a resale site.”
“When you pivot over and look at the RealReal, a lot of that relationship with the customer is on luxury or higher-end goods,” Ceci said.
Traditional retailers moving into resale
Several traditional retailers are finding ways to move into the reselling space as that business booms.
Lululemon announced in April it would be launching its own resale program. The brand partnered with Trove, a business that helps companies build out resale shops, and began piloting its ‘Like New’ program in California and Texas in May.
ThredUp has struck several partnerships, including a deal with Macy’s in August to offer secondhand apparel at 40 stores. J.C. Penney works with ThredUp to offer secondhand women’s clothing and handbags at 30 stores.
Through its “resale as a service” platform, ThredUp is working with several retailers to help them provide secondhand products to customers, including Walmart, Everlane, Farfetch, Gap, Adidas, and Crocs.
Even Ikea said it would get into reselling, with the Scandinavian ready-to-assemble furniture store announcing this month it would offer a “buy back & resell” program in 33 of its U.S. stores through December 5, after piloting the service at a Philadelphia store.
“I am optimistic amid a lot of evolution that is going on,” Ceci said. “And certainly, the resale market is definitely here to stay.”
The Tacoma police department said the victim was taken to a local hospital suffering from serious injuries.
“People were fleeing, sheltering in place and the stores went into lockdown,” Pierce County Sheriff’s Department spokesperson Sgt. Darren Moss told CNN.
He said the mall was closed as police searched for a suspect. “The scene is still active, and we do not want people responding there,” Moss said.
Bethany Villero, who was shopping at the mall on Black Friday, described a chaotic scene after shots were fired.
“I saw people throwing up, I guess they were so scared,” Villero told CNN.
Villero said she didn’t hear the gunshots as she was leaving the Nordstrom store, but first learned about what happened from a group of young girls leaving the building.
“I heard them behind me, and they were crying and screaming,” Villero said. “A lot of people were coming out of Nordstrom crying and looking terrified.
“It was just chaotic, with people just trying to leave all at once. … The terror on those kids’ faces is the worst part,” she said.
The Tacoma Police Department took unaccompanied minors to a nearby bus station to be picked up. Moss said stores went into lockdown while other shoppers tried to flee the mall.
Law enforcement officers throughout Pierce County were helping Tacoma police search the mall, the county’s sheriff’s department said in a tweet.
The mall is home to more than 150 stores, according to its website.
Black Friday began slowly in San Francisco’s Union Square, which has been hammered by the pandemic, a shift to online shopping and most recently, the brazen mass robberies of the Louis Vuitton store and other businesses in the city’s famed downtown shopping district.
Traditionally the biggest shopping day of the year, Black Friday has long been known — pre-pandemic — as a ritual that draws huge bargain-seeking, post-Thanksgiving crowds to stores that open early and lure shoppers with sales. The day has been considered a harbinger for the fortunes of retail merchants during the holiday season.
On Friday morning, as the blackness of night faded and a beautifully sunny day began, police seemed to outnumber shoppers in some blocks around Union Square. On Geary Street, sandwiched between Union Square and Macy’s, there were at least 10 police officers, five patrol cars and a large RV-sized mobile emergency operations center at about 8:30 a.m. A handful of shoppers intermittently trickled in and out of Macy’s.
The police presence was also noticeable around the square and on adjoining streets with popular stores. Officers were stationed on every corner and in front of some stores, and patrol cars were parked throughout the shopping district and tourism destination.
In front of the St. Francis Hotel, where before the pandemic, a doorperson with a whistle hailed taxis for guests, the long line of cabs was replaced with a queue of San Francisco Police Department vehicles.
“They’re everywhere,” said an excited boy, about 5, as he posed for a picture in front of the mobile operations center.
Crowds in the streets around Union Square were light, and many of the shoppers carried coffee cups rather than shopping bags. But people wandering the streets said they were reassured by the law enforcement presence.
“There’s a lot of police here,” said Sara Twas, a janitor who lives in San Francisco. “It feels very safe.”
Sara Twas (right) and a friend carry bags of Black Friday deal items while browsing through Union Square in San Francisco.
Jessica Christian/The Chronicle
If shoppers welcomed the overt presence of police, so did the Union Square Alliance, a property-owners group.
“The ice rink is full. The stores are bustling,” Marisa Rodriguez, executive director of the alliance, said in an emailed statement. “We are pleased with the added police and security presence around BART, parking garages and on the street to make us all more comfortable and safe.”
Isaac Muradanes, a 42-year-old San Franciscan, carried an Old Navy shopping bag as he headed up Powell Street past several stores vacated during the pandemic. The street’s wide sidewalks, usually packed elbow-to-belly-button with shoppers, offered plenty of room to move. Several police officers cast watchful eyes on the small crowd.
Muradanes was not surprised to find Macy’s far less crowded than Old Navy on Market Street on Black Friday, he said, “especially because of what happened around the corner,” where the Louis Vuitton store is located. In addition to the police on the streets, several stores also had security guards stationed just inside their front doors.
Tim Dick, a Montana attorney, visited San Francisco on a Thanksgiving weekend shopping and sightseeing trip with his wife, who works in public health. He said they chose to come to San Francisco because travel prices were low and the city’s vaccination rate high. With most people on the streets wearing masks and restaurants checking vaccination records before allowing people to dine inside, the city seemed more welcoming, he said. The increased police presence was comforting, too, he said. On earlier visits, he said, they noticed a lot more homeless people on the streets and far fewer police.
But he had expected to see bigger crowds of shoppers this year.
“We were expecting it to be a lot busier,” he said.
Jasmine Woodard wears a festive outfit while shopping for Black Friday deals near Westfield mall in San Francisco.
Jessica Christian/The Chronicle
Crowds were also smaller than usual in North Beach and Chinatown, where the only noticeable lines were at restaurants and coffee shops. Along Market Street, where several stores had boarded up windows, the Westfield mall came closest to being crowded, though the throngs of Black Fridays past were absent.
The crowds, inside stores and in the streets, picked up noticeably after 10 a.m. Skaters filled the Union Square ice rink and the number of people posing for photos in front of the Christmas tree grew.
But the classic Black Friday vibe, that mix of excitement and annoyance, was mostly missing — along with the crowds.
Michael Cabanatuan is a San Francisco Chronicle staff writer. Email: mcabanatuan@sfchronicle.com Twitter: @ctuan
Pedestrians carrying shopping bags wait to cross a street in the SoHo neighborhood of New York on Oct. 24, 2021.
Bloomberg | Bloomberg | Getty Images
Most Americans say they don’t intend to spend more than last year this holiday season – yet that doesn’t mean they won’t go into debt.
A survey from CreditCards.com finds the average parent with kids under 18 plans to spend $276 per child on gifts. Meanwhile, the average holiday celebrant with a significant other may spend $251 on gifts for them.
A lot of holiday shoppers aren’t planning on increasing their budgets for this holiday season compared to last year. The survey found that 48% of respondents intend to spend about the same. Meanwhile, 21% said they intend to spend less and 13% said they anticipate spending more. The remaining 9% said they weren’t sure yet.
Those who plan to pare back will start with decorations, followed by entertaining and hosting, gifts and travel, in that order.
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However, despite a desire to keep their spending in check, 41% of respondents indicated they are willing to incur debt this holiday season. That was even higher for those who already have credit card debt, with 60% saying they would be willing to add to their balances.
Ted Rossman, senior industry analyst at CreditCards.com, said there are risks people could still overdo it this year.
“Retail sales are setting records, even in the face of some rather downbeat consumer confidence data,” Rossman said.
Even as many consumers pared back their credit card balances during the pandemic, data from Experian shows the average balance is $5,525, he said. Moreover, more than half of active credit card accounts carry their balances from month to month. And the average credit card interest rate is more than 16%.
This year, inflation could lead to people having less money to spend on other things, which could mean they add to those balances. Meanwhile, the enthusiasm for this year’s holiday season coming out of the pandemic could also inspire people to spend more, Rossman said.
There are some tips to avoid that.
First, even though it may sound early, start holiday shopping now, Rossman advised. Due to supply chain issues, some items may be harder to find this year.
“The longer you wait, the more likely things are going to run out, and I don’t think prices are going to go down,” Rossman said.
Next, set a goal of being creative in trying to keep your budget down. Think of ways to give homemade items, or use unused credit card points or gift cards to fund your purchase.
“Your family doesn’t want you to be in credit card debt, either,” Rossman said. “Try to resist the temptation to overspend on the latest and greatest.”
Finally, avoid deals like buy now, pay later unless you have truly thought through how that debt will fit into your overall budget. While some of those deals offer 0% interest, others do not. Moreover, adding multiple monthly bills by purchasing several items this way can cripple your budget, Rossman said.
“A lot of people don’t even view that as debt, and I think that is a bit of a slippery slope,” Rossman said.
CreditCards.com’s online survey was conducted in mid-October and included 2,485 adults.
“This afternoon at approximately 2:40 p.m., a violent extremist undertook a terrorist attack,” said Prime Minister Jacinda Ardern in a news conference Friday afternoon. “This was a violent attack, it was senseless, and I am so sorry it happened.”
Ardern added that the man was a Sri Lankan national, a “supporter of ISIS ideology,” and a “known security threat.” He was under constant surveillance by multiple government agencies, and security personnel were able to shoot and kill him within 60 seconds from the start of the attack, she said.
The attacker obtained a knife within the store before police shot him, said New Zealand Police Commissioner Andrew Coster, who described him as a lone actor. The man died at the scene.
Videos posted online showed panicked shoppers running out of the LynnMall Shopping Centre and looking for cover as the situation unfolded.
Six people have been injured, emergency crews said, with three in critical condition. Heavily armed police and ambulances remain at the scene, and authorities have cordoned off the surrounding streets.
The attacker came to New Zealand in 2011 and became a person of interest in October 2016, authorities said.
Ardern did not publicly share the man’s identity, saying he had faced court in the past and suppression orders prevented officials from releasing certain information about him.
The Prime Minister added that she had been “personally aware” of him before the attack, and authorities were monitoring him because they could not keep him in prison.
“I acknowledge this situation poses questions about whether police could have acted faster or done more,” Coster said. “I am confident we have done everything we can within the law … we were doing everything we could to monitor him. The fact we were able to react within 60 seconds shows that.”
Auckland was already under a Level 4 lockdown, the country’s most stringent level, due to surging coronavirus cases — meaning most shops are closed and most people must stay home. Supermarkets remain open as an essential service.
Countdown, the supermarket chain that owns the LynnMall location, said in a statement it was “devastated” by the attack.
“Our hearts are heavy knowing what our team and customers have witnessed and been through,” the statement said.
New Zealand has been on alert for attacks since a white supremacist gunman killed 51 people at two mosques in the city of Christchurch on March 15, 2019.
Ardern, asked if the Friday attack could have been revenge for the 2019 mosque shootings, said it was not clear. The man alone who was responsible for the violence, not a faith, she said.
“It was hateful, it was wrong. It was carried out by an individual, not a faith,” Ardern said. “He alone carries the responsibility for these acts.”
WICHITA, Kan. (KWCH) – The Kroger Grocery Company, which owns all Dillons grocery stores, is now strongly recommending that customers and employees wear masks while in their stores regardless of vaccination status. This statement comes after the massive increase in Delta variant COVID-19 cases within the past few months.
Kroger released a statement regarding the rise of COVID-19 delta cases in the U.S. and their compliance with the CDC’s current guidelines.
In the same statement, Kroger encouraged associates to get vaccinated in the same statement, offering them $100 to receive the shots.
While this is not mandatory, the company continues to follow CDC guidelines and hopes customers will do the same.
Shoppers stock up on merchandise at a Sam’s Club store on January 12, 2018 in Streamwood, Illinois.
Scott Olson | Getty Images
For Sam’s Club shoppers, a trip to the store typically means lugging home big and often cumbersome items. A month’s supply of diapers. Lawn chairs. Large cartons of chicken broth or giant boxes of cereal.
The Walmart-owned membership club is flipping that on its head as it tests a new digital tool. Customers at select clubs can browse the aisles, retrieving items that fit in the car trunk and shipping other purchases directly to the home. They can check out all purchases in a single transaction on their smartphones.
Sam’s Club CEO Kath McLay said the company sees technology as a way to improve the customer experience and build on its gains over the past year.
“We want to have great items. We want to have disruptive prices. And we want to make sure that we’re providing convenience to our members,” she said in an interview with CNBC. “What we really learned through the pandemic was that we need to stay true to that strategy.”
During the health crisis, Sam’s Club rolled out curbside pickup to all its stores, as customers sought fast, contactless ways to pick up online purchases. The Scan & Ship service, announced Tuesday, is the latest way that Sam’s Club is using digital options to stand out from competitors. It will become a feature of Scan & Go, which allows customers to ring up purchases with a smartphone as they add items to their shopping carts.
The company has designed and launched app-based tools for employees, too, including a voice-enabled service called Ask Sam that helps locate items and answer customers’ questions.
By testing and launching new ways for consumers to shop, Sam’s Club has driven its own growth and become a tech incubator for its parent company.
Comparable sales, a key metric that tracks sales at stores open for at least the past 12 months and online, have grown faster at Sam’s Club than Walmart over the past year. In the first quarter ended April 30, Sam’s Club’s comparable sales growth and e-commerce growth outpaced its parent company as they rose 7.2% and 47%, respectively, compared with 6% and 37% at Walmart U.S.
Total membership at the warehouse club also hit an all-time high in the first quarter. The company does not disclose how many members it has.
A moment to shine
Warehouse clubs had a moment to shine during the pandemic as stock-up trips became the norm and some necessities, such as soap and paper towels, were hard to find. Shares of Costco and B.J.’s Warehouse Club outperformed the S&P 500 last year. BJ’s stock rose nearly 64%, while Costco shares climbed 28% in 2020 compared with the 16% lift in the S&P 500.
The gains have been more modest since January. Costco shares increased 8% year to date, but the stock is trading near a 52-week high. It closed Monday at $407.88, giving it a market value of $180.31 billion. B.J.’s, which has a much smaller store footprint, closed at $48.19, bringing its market cap to $6.61 billion.Shares have climbed more than 29% year to date.
Walmart shares, which gained 21% last year, also surpassed the S&P 500. But Walmart’s stock is down nearly 3% year to date, bringing its market value to $392.44 billion. Investors have been worried about whether Walmart will be able top last year’s strong performance.
Meanwhile, warehouse clubs have endured. The lasting strength has surprised some investors who chalked up membership gains to a “period of panic” during the pandemic, said Steph Wissink, a managing director and retail analyst for Jefferies. Many of those customers are renewing memberships and continuing to fill up baskets, she said.
“It wasn’t just a fleeting experience because of safety and stock-ups,” she said. “It was a true destination change. They’re buying more of their goods for their household.”
Real estate and demographic trends are expanding the clubs’ potential audience, Wissink said. As millennials get older, some are buying homes in the suburbs and living closer to warehouse clubs. Companies’ new attitudes toward remote work has inspired some to move out of cities into houses with bigger yards, closets and pantries.
“Buying two jugs of ketchup or buying two loaves of bread all the sudden becomes a possibility,” she said.
The mix of items in baskets has changed in recent months, too, she said, as shoppers spent stimulus checks and bought more general merchandise like furniture and electronics.
McLay said Sam’s Club has been surprised by some of the new patterns it’s seen. For instance, she said, 45-count packs of toilet paper have remained a hot item because people became used to having backup inventory in their pantry. Food for home has sold at higher rates because workers with hybrid schedules now split their weeks between the home office and the corporate one.
Sam’s Club is testing a new feature, Scan & Ship, that allows people to send a purchase directly to their door when shopping at the club.
Sam’s Club
Blending online, in-person
McLay describes Scan & Go as “the closest you can get to an online purchase in the club.”
Sam’s Club, which has nearly 600 stores and about 100,000 employees, launched Scan & Go in 2016. Two years later, it opened Sam’s Club Now, a smaller store in Dallas where it tests new tech with customers. A short drive from that store, it opened an innovation center in downtown Dallas with nearly 300 engineers, user experience designers and data scientists who help design Sam’s Club technology.
Over the past year, however, Scan & Go gained new relevance, McLay said. It saw a nearly 44% increase in members using the Scan & Go app in the first quarter versus the same period a year ago.
“I keep saying to the team, it felt like it was a product that we created, which was waiting for a moment like a pandemic, because people just absolutely flocked to contactless payment. And there it was ready to go,” McLay said at a virtual conference hosted by Jefferies in June.
With Scan & Ship, Sam’s Club will bring online and offline even closer together, McLay said. It is being tested in three different stores: a club in Murrieta, California; one in McKinney, Texas; and the Sam’s Club Now in Dallas. For Sam’s Club Plus members, shipping to the home is free.
Eventually, the direct shipping feature will be expanded to other clubs and to more items, from playsets and patio furniture to mattresses.
Tim Simmons, chief product officer for Sam’s Club, said stores may drive more sales by making certain purchases less of a hassle. “I would probably put more things in my cart if I didn’t have to haul it home,” he said.
The feature could also be used to sell out-of-stock items, merchandise that comes in other colors or sizes or items, like a motorcycle or bike, that can be tricky to store in multiples on the sales floor, he said.
The goal is to make customer experience better, Simmons said. Over the past three years, it’s taken numerous steps to achieve this. At its member services desk, it swapped out eight pieces of hardware for an iPad to speed up returns and sign-ups for new members. It turned binders of spreadsheets into a tool that uses machine-learning to help bakers, butchers and other employees predict how many birthday cakes, rotisserie chickens or hoagies customers will need, based on past sales and factors like major holidays or weather patterns. And smartphone-based tools help workers prioritize tasks on the sales floor, such as restocking items, and assist managers in tracking the club’s sales metrics.
Some of the technology born at Sam’s Club is now used by Walmart — such as Ask Sam and Scan & Go, which is available to Walmart shoppers who belong to its membership program, Walmart+.
Along with serving as a tech incubator, Sam’s Club has been a training ground for executives who have become senior leaders at Walmart and beyond. Doug McMillon was Sam’s Club CEO before he became Walmart CEO. John Furner, another former CEO of Sam’s Club, now leads Walmart’s U.S. business as its president and CEO. And Roz Brewer, former Sam’s Club CEO, went on to become chief operating officer at Starbucks and recently, CEO of Walgreens Boots Alliance.
Fending off Costco
For Sam’s Club, technology is also a differentiator from Costco, its biggest rival.
Costco caters to a higher income consumer, and charges more for its service, but it has been slower to adopt new features like curbside pickup. At the moment, that option is in a pilot phase at three clubs in New Mexico.
The average Costco member has a household income that is more than $100,000. They pay between $60 and $120 a year for a premium membership. By comparison, a typical Sam’s Club member has a household income of between $75,000 and $100,000, and pays about $45 per year for a basic membership or up to $100 for a Plus membership. The figures are based on company comments and estimates by Jefferies. Costco has 60.6 million members, as of its most recent quarter that ended in May. Sam’s Club does not disclose total membership.
According to Wissink, Costco emphasizes lucrative services that can quickly tally up, such as booking a car rental or vacation or ordering a hearing aid.
“You see that increasingly they have volume and value created beyond the walls of their boxes,” she said.
So far that’s working in Costco’s favor. It drives nearly twice as much annual revenue per store as Sam’s Club. It has a slightly larger footprint at those stores, 146,000 square feet on average at Costco compared with an average of 134,000 square feet of Sam’s.
But Sam’s Club has “always been more on the leading edge when it comes to digital integration,” Wissink said.
Take the two companies’ apps. Sam’s Club app was downloaded almost twice as much as Costco’s app last year in the U.S. — about 9.6 million times versus 4.9 million times, according to Apptopia, a company that tracks mobile apps’ performance. Customers have given the Sam’s Club app higher marks, too, with 78% of Sam’s Club’s users giving it positive reviews versus just 27% for Costco, according to Apptopia.
So far, the tech advantage isn’t hurting Costco’s performance, Wissink said. But it’s possible that it could over time.
According to McLay, Scan & Go is “one of the stickiest products” Sam’s Club has developed and it is “one of the most significant elements of why people renew with us.”
McLay knows this because Sam’s Club closely monitors factors that increase the chance of a member renewing.
“It’s one of those things that is a little addictive,” she said. “Once you do start using it and you have to go back and actually wait in a line in a retail outlet, it feels very yesterday.”
—CNBC’s Christopher Hayes contributed to this report.
Nordstrom said Sunday it has acquired a minority stake in four apparel brands owned by the online U.K. fashion house Asos.
The brands — Topshop, Topman, Miss Selfridge and the activewear label HIIT — all target younger consumers in their 20s. Financial terms of the deal weren’t disclosed.
Nordstrom President and Chief Brand Officer Pete Nordstrom said he views the collaboration as a way to redefine the business model of a wholesaler, such as Nordstrom, working with a retailer. He also expects it to open up the possibility of further strategic partnerships in the future.
Although Asos will retain operational and creative control of the Topshop brands, Nordstrom will have the exclusive retail rights for Topshop and Topman across North America.
“Bringing the Asos brands, including Topshop and Topman, to our customers allows us to create newness and excitement,” Pete Nordstrom said in a statement.
The department store has been the exclusive distributer of Topshop and Topman in the United States since 2012. Nordstrom will now be the only brick-and-mortar location for these brands globally.
Starting this fall, customers will also be able to pick up online orders from Asos at all Nordstrom and Nordstrom Rack locations, the companies said.
Asos acquired Topshop, Topman, Miss Selfridge and HIIT in February. The brands were put on the block after Arcadia Group, the British retail empire that had been run by the billionaire Philip Green for 18 years, filed for bankruptcy protection late last year. Lockdowns initiated throughout 2020 due to the pandemic dealt a huge blow to Arcadia, which operated hundreds of stores. Asos, meanwhile, had an online-only business model.
Nordstrom is looking for ways to keep its existing customers coming back frequently to shop, while also reaching people who have never visited its stores or website before. It has an opportunity coming out of the pandemic to do so — especially as many people head back to work and back to school, and require brand new wardrobes.
The company’s hope is that by exclusively offering merchandise from Topshop, Topman, Miss Selfridge and HIIT, Nordstrom will reach a younger generation of shoppers who have growing spending power.
It could use a boost, too. Nordstrom has yet to surpass its pre-pandemic revenue. For the three-month period ended May 1, its sales were down 13% relative to 2019. Elevated labor and shipping costs, as well as supply chain disruptions, have added further pressure on its business.
Nordstrom shares are up about 15% year to date. The company has a market cap of $5.7 billion.
Chocolatier Godiva will be shuttering its 128 store and café locations across North America at the end of March, the company announced Sunday, citing a decrease in demand for in-person shopping during the pandemic.
Godiva’s sweet treats will still be available online and inside partnering retail and grocery stores across the continent going forward, the company said. It will maintain in-store operations across Europe, the Middle East and Greater China.
“We have always been focused on what our consumers need and how they want to experience our brand, which is why we have made this decision,” CEO Nurtac Afridi said in a statement.
The Belgian chocolate-maker did not disclose the number of employees who will be affected by the North American decision.
“They lost between half their business which is done due to tourists, the other 25 percent of the business which is done due to special occasion, and another 25 percent which is done to impulse,” Marshal Cohen, chief retail analyst at the NPD Group market research company, told NBC News. “Where’s the business coming from? Everything moved to online with great ease.”
“If we’re not socializing as much as we did and we’re not having special events and special occasions, that’s going to impact the business to some degree,” he said.
Godiva is one of the hundreds of thousands of store closures that have come amid a massive decline in in-person shopping during the pandemic.
Other retailers to announce store closures since March include Macy’s, JCPenney, Bed Bath & Beyond, Victoria’s Secret, Francesca’s, Zara, Express and more.
Many retailers, including Godiva, have focused on leveraging their digital footprint in order to successfully reach customers.
“Online has leapfrogged forward three years,” Cohen said. “Consumers have clearly educated themselves on how to purchase basically anything from anywhere, at any time, at any price.”
According to Adobe Analytics, online shopping hit nearly $200 billion during the holiday shopping season alone.
Chocolate sales have also been on the rise since the pandemic hit. In 2020, Americans spent nearly $15 billion on chocolate, a 5 percent increase since 2019, while Canadians spent a little over $2 billion, a 7 percent jump.
