Sam’s Club is enhancing its premium membership offering by adding an $80 tire installation service for Plus members who purchase a set of tires. The move, announced last week, is part of a strategy to increase conversion to the high-end Plus membership by providing value-added services. Steve Schrobilgen, Chief Operating Officer, highlighted that members frequently utilising Sam’s Garage for tire and battery services have a renewal rate of 95%.
Enhanced membership perks to entice customers
The Sam’s Club Plus membership, which usually costs $120, is currently available at a promotional price of $55 until the end of September. It includes free shipping on orders above $50, 2% cash back, early shopping hours, and discounts at the pharmacy, optical, and tire and battery centres. The standard membership, typically half the Plus price, also benefits from a reduced rate of $25 during the promotion. Both memberships provide emergency roadside assistance for up to four years, car battery checks, and free wiper blade installation.
Schrobilgen stated that the new benefit addresses a fundamental need for convenience and savings, thus illustrating the value of the Plus membership and promoting ease of use within the club.
Competing with rivals with new offerings
This year, Sam’s Club witnessed a 22% rise in members using Sam’s Garage services, a sector where its competitor Costco leads. A February survey by Kantar showed 31% of Costco members utilise its tire services, compared to 24% for Sam’s Club. Unlike Sam’s, Costco provides free tire installation for all its members. Moreover, Schrobilgen noted that tire department sales are rising faster than other areas.
Last October, Sam’s Club introduced a dedicated service advisor to enhance the tire centre experience, focusing on personalised service and efficient appointment scheduling. Schrobilgen emphasised the importance of not only demonstrating cost savings but also ensuring customers fully understand the available tire options.
Driving membership with value additions
Anna Brennan, a principal analyst at Kantar, pointed out that Sam’s strategy might be to capitalise on rising fuel prices by enhancing auto-related benefits, as many members visit specifically for gas discounts. While she questioned if the $80 tire installation value alone would push upgrades to Plus membership, she acknowledged the general value of adding new membership benefits in a competitive landscape.
Brennan remarked that it’s crucial for retailers like Sam’s Club to regularly introduce new membership benefits to demonstrate the active efforts in providing savings, making them more apparent to customers.
Reporting based on coverage first published by modernretail.co.