Sam’s Club gets aggressive with private brands

By Mike Troy, editor in chief, Retail Leader magazine

Sam’s Club plans to introduce hundreds of new items under its Members Mark brand this year and next while adopting a more collaborative approach with suppliers to drive sales, Chandra Holt, vice president of private brands at Sam’s Club told attendees of Store Brands' 2016  Innovation and Collaboration Summit.

Holt was a keynote speaker at the event, held Aug. 15-17 in Orlando, and her comments about Sam’s Club’s private brand growth strategy came amid a larger conversation she had with attendees about collaboration, innovation and the fundamentals of having an effective relationship with a retailer.

“We all want to drive profitable sales,” Holt said, noting that the key to do doing so is establishing relationships with suppliers that are collaborative as opposed to transactional.

One way Sam’s Club has addressed that challenge is by increasing the ranks of its store brand team, which is now 60 strong, more than double the size from when Holt joined the company a year ago. In addition, Sam’s Club will add 300 Members Mark brand items this year and another 300 next years, Holt said. The retailer is also planning to hold its first-ever store brand supplier summit in September, and then in 2017, it will initiate a formal joint business planning process with store brand suppliers.

The big push for the Members Mark brand comes roughly 20 years after it was launched. Over time, Sam’s Club introduced other private brands as merchandising strategies evolved, but Member’s Mark was the one that resonated the most with members.

When Holt arrived at Sam’s Club last year as part of a larger senior leadership transition, one of the strategies that President and CEO Rosalind Brewer outlined was a goal to unify all private brands under the Members Mark logo.

“It just makes sense to do one (private brand) and do it really well,” Holt said.

In addition to sharing perspective on where Sam’s Club is headed with its private brand, Holt offered insights on what an effective retailer and supplier relationship looks like. Having spent 10 years with Target Corp. and five years with Walgreens in merchandising roles prior to joining Sam’s Club, Holt has a diverse perspective on collaboration and what it takes to make it work.

“Less than 5 percent of the suppliers I worked with in the last 15 years had a collaborative relationship,” Holt said.

Holt cited several reasons for the lack of collaboration, with the main one being the fact that buyers don’t have time. Consequently, they have to be selective the suppliers with which they partner. That’s why it is incumbent on suppliers to get the basics of collaboration right, especially if they expect to develop innovative strategies.

For example, Holt said it is essential for suppliers to the know the retailer’s strategy, whether the retailer is focused on a unique point of differentiation, a price proposition or a niche. Beyond understanding the strategy behind the retailer’s brand, there is an added challenge with private brands because many retailers have the complexity of a tiered strategy. Another bit of elementary but often unheeded advice relates to knowing the business and the nuance of how the category performs.

“You have no idea how many time I’ve met with suppliers who didn’t know the business,” Holt said.

She also encouraged suppliers to focus on their own unique strengths while viewing things through a retailer’s lens with an eye to helping solve their problems.

“The harder you make it for the retailers, the more likely you are to fail,” Holt said.

NOTE: Look for comprehensive coverage of Store Brands' 2016 Innovation & Collaboration Summit in the Aug. 25 edition of Store Brands' Industry Intel e-newsletter.