Inside Sam’s Club Now, an Incubator Store for Testing New Concepts

June 17, 2019

Eddie Garcia is holding up an iPad as his coworker Keri Voke goes to grab a “smart” shopping cart. Garcia opens an app that asks him where he’d like to shop. He selects “Pirate Cove,” and the screen instantly displays a camera view of Voke at her cart. But the cart has been transformed into an animated pirate ship. With another tap, Garcia turns it into a bucking longhorn; one more and Voke is at the helm of a rocket ship blasting through a meteor shower.

“See, the magic starts here,” says Garcia, Vice President of End-to-End Experience at Sam’s Club, pointing to the shopping cart, “and ends here,” he says, lifting up the iPad, explaining that the augmented reality technology works by picking up specific markers on the cart using the iPad’s camera, and then layering on digital images. Garcia says the goal is to create a shopping experience so different “that your kids are demanding to come to Sam’s Club, because it’s so much fun.”

Kid-friendly AR is just one of the offerings at Sam’s Club Now, a cashierless incubator store based in Dallas. This 32,000 square foot, one-of-a kind store is a quarter of the size of a regular Sam’s Club and has been hailed as the chain’s “epicenter for innovation” by Jamie Iannone, CEO of Sam’s Club is owned by Arkansas-based Walmart Inc., but the Sam’s Club e-commerce business and the team that oversees the incubator store are based in San Bruno, Calif.

The incubator store has been rigged with 700 cameras, about 400 Bluetooth locator beacons, robotics, computer vision, and a host of other technologies aimed at enhancing the retail experience while also making visits more efficient. It was created as a platform for “testing out hypotheses” about what’s possible, explains Voke, a Product Manager for Innovation. Winning concepts will be rolled out to Sam’s Club’s roughly 600 locations nationwide.

The store opened in November 2018, less than a year after Sam’s Club announced it would be closing 63 out of its 660 locations around the country. About 10 of those stores have since been converted into e-commerce fulfillment centers. It also comes on the heels of Amazon unveiling its first cashierless Amazon Go convenience store in Seattle last year, followed by others in San Francisco and Chicago. Venture capital money is also pouring into retail automation, as well as new store formats.

Here’s how Sam’s Club is responding.

Moving Fast

The idea for an incubator store, from conception to opening day, played out in less than six months. It pulled in more than 100 people — from the company’s California mobile team, as well as from a brand new Sam’s Club Dallas Innovation Center, which officially opened in January. Garcia says the new Center has nearly 150 people on its staff, mainly engineers focused on the domains of machine learning and computer vision.

Recruiting locally was easy, Garcia says, as the Dallas area is rich in tech talent. And while Sam’s Club is a subsidiary of Walmart Inc., and constantly sharing learning with colleagues there, the Dallas Innovation Center operates separately from the Walmart Labs team, a tech development division of Walmart.

This was intended to be experimental — just pure delight and fun to show you what AR can be.

“The executive support from the board all the way down has been tremendous,” Garcia says. “When you hear [Sam’s Club CEO] John Furner talk, we’re focused on people, products, and digital. And it’s a pillar in the strategy for the entire Sam’s Club organization.”

Garcia says that instead of facing cost constraints, the push in recent months has been on speeding the time to market. “The biggest thing for all of us is, how do we go faster and faster and faster?” he says. Garcia reports to Iannone, the CEO of

Building on the Foundation of an Existing App

Unlike Amazon Go, which automates the checkout process with a proprietary technology set that blends computer vision, a mobile app, and sensors, checking out at Sam’s Club Now requires you to scan items individually with a version of the Scan & Go mobile app developed specially for this store. (Amazon Go locations are only around 1,500 square feet and cost a reported $1 million each just for the technological infrastructure. Voke says the size of the typical Sam’s Club — about 132,000 square feet — was a definite factor in determining their checkout technology.)

Launched into Sam’s Club two years ago, the app was developed by the same engineers who created a similar app for Walmart. But while Walmart abandoned its version of the app in 2018, citing low interest from its customers, use among Sam’s Club Members on its version of the app was up 40 percent in 2018.

One of the reasons the app has been better received at Sam’s Club, Garcia says, is that its stores employ exit greeters who examine receipts, an already-established process that worked well in tandem with the app checkout process.

The Scan & Go app for the Dallas incubator store is built on the foundation of the primary Sam’s Club app, Voke says, but it adds many features that club members have been asking for.

“I think there are a lot of different ways to make a member’s shopping trip faster, because that’s the ultimate goal: convenience and speed,” she says. “We are a retail chain that has 600 clubs that are live, and anything we put out to our members, they expect it to work as it should. … That’s why this lab is so important. We can really pinpoint any tweaks we need to make and can learn from our members and associates about how people are using it.”

Member Associates Replace Cashiers

In lieu of cashiers, member associates are now stationed at the store entrance and exits to assist people with downloading the Scan & Go app; help them sign up for memberships; verify that they’re old enough to buy alcohol; or help with whatever new technology is being rolled out that week. (They also make sure that each member who downloads the app gets a free prize, such as a small food item.) Member associates provide feedback to the development team, so they can continually improve the next generation of the technology.

“We made it as simple as you can to scan your membership card and you’re in, because we know login is such a pain point for members,” Voke says, adding that there’s also a guest check-in option for people who’ve forgotten their password at home and still want to shop. “That was a really big thing for us to solve, because if we had a login process each time, we would have had pushback. Even getting people to know their iTunes password is difficult.” Once a member logs in with the app, they stay logged in.

Wayfinding and Navigation

Indoor navigation enabled by the Bluetooth beacons and other technology in the incubator store help to guide customers exactly where an item is within the club, Voke says. She demonstrates by typing a particular type of dog food into the search field of her Scan & Go app, and then walking over to find it. The app also shows inventory levels and if an item is out of stock.

Feedback on navigation and other features will be gathered via the app, associates’ observations, and other technology. “We might introduce a new feature every week,” Voke says. “I’m a big fan of the lean startup methodology. This whole concept of rapid prototyping is something that people didn’t think could apply to enterprise — Sam’s is a $60 billion company, and they’re literally scrappily putting things together as fast as we can to see if we can get them to chain.”

AR Experiences That Help to Move Product

Smart shopping carts are just the beginning of the AR experiences Sam’s Club Now is exploring, Garcia says, as he picks up a package of Member’s Mark Pulled Pork, the Club’s in-house brand, from a refrigerated case. “We also want to bring the stories of our items to life. There’s a rabid fan base for this pulled pork in the Sam’s Club community, because it tastes amazing,” he says. He then holds the iPad in front of the package, and up pops an animation of meat on a grill. “The idea is to surprise, delight, and inspire,” he says.

“We don’t have it yet — but we’re going to put little markers on items that have an augmented experience around them,” Garcia says, noting that Sam’s Club collaborated with Eko, an interactive media company in New York.

Other Sam’s Club Brands with AR experiences include Sam’s Club in-house brands of almond milk, honey, trash bags, and its Donut Shop Coffee, which turns into a coffee shop with a steaming hot cup of coffee in front of you. Garcia acknowledges that working with outside brands is a huge opportunity. “We’ve had some suppliers see this, and their mouths are watering and they’re saying, ‘How do I get that for my stuff?’ This is all about learning and iteration. We’ll figure out when and if we absorb this into the Sam’s Club app itself. Or do we create a different app with a different experience? The best way to innovate is to do it alongside your members, so you can figure out what’s working and what’s not,” Garcia says. For instance, the MagiCart AR experience was originally planned for a smartphone, but through member feedback, the team learned the experience really needed the bigger screen of an iPad to bring it to life. It now has six circulating in the store (equipped with security mechanisms so they don’t disappear) just for this purpose.

“Everyone talks about AR, but in terms of making it useful or even delightful in a retail environment – I think that hasn’t been figured out,” Voke says. “So this was intended to be experimental — just pure delight and fun to show you what AR can be.”

The smart shopping list should not only help you find the items that you might be shopping for that day, [but] we should intuitively know the items you’ll want to purchase that day.

Rolling Out Concepts to Other Sam’s Club Stores

Two months after the store opening, Voke and Garcia report that several of the concepts introduced at Sam’s Club Now are being deployed in the pilot phase at another undisclosed Sam’s Club store, and if they do well there, a larger rollout could lie ahead. These include:

  • Alcohol Sales: The Scan & Go app will allow members to purchase alcohol by entering their birth date into the app. An Associate is still required to check a member’s ID to complete the purchase, just as they previously did at the cash register, but the process is sped up a bit by the fact that people pre-enter their birth dates. “It’s a feature our members have been asking for for a long time,” Voke says.

  • Digital Price Tags: Digital Price tags can change in real-time. That’s convenient because “Sam’s Instant Savings” prices are constantly in flux, and they traditionally have required Sam’s locations to print out new price tags and post them around the club every time there’s a price change. “We’ve had the merchandising teams weigh in to think about things like pricing differently,” Voke says. “How do they think about a digital price tag [being] a benefit from a technology and operational perspective? It’s really pushed every part of the organization to think a little bit differently.”

Other features in the works for the store’s Scan & Go app include voice search and a smart shopping list. When launched, Voke explains the smart shopping list “should not only help you find the items that you might be shopping for that day, [but] we should intuitively know the items you’ll want to purchase that day.” A data science team developing the smart shopping list feature will take into account past purchase history. Shoppers can also add items to the list, and the app will plan a path for them around the club.

Gathering Feedback and Data

The Scan & Go app is set up to ask for feedback at the end of every transaction, in addition to follow up emails sent to members asking them for feedback on their shopping experience. “We look at analytics of every kind,” Garcia says. “Eventually we’re going to be measuring foot-traffic, idle time around certain items, traffic flows all through the club, again using computer vision.”

Member associates are also a critical part of their learnings, they say. In two months, they’ve learned that this club attracts primarily tech enthusiasts, neighborhood shoppers, and shoppers who are simply looking for the closest Sam’s Club and arrive unaware that it’s an incubator store. The member associates are the ones who are in charge of disseminating information, explaining the club’s newfangled technology and trying to translate that into a positive experience for all those different demographics.

The data in two months shows that “these associates are the highest-rated in the entire chain,” Voke says.

This has put added pressure on the team to create an app that is user-friendly for customers and the associates, freeing them up to provide genuine quality customer service, versus struggling to figure out a complicated app and other components of the store. “It’s the thing we hear loudest,” Garcia says. “They love the interaction with the associates. … It’s an interesting paradox. The digital pieces are unleashing old school, face-to-face human interaction.”

And while enhancing the in-store experience is a central tenet of Sam’s Club Now, the team knew some shoppers would find same-day delivery more convenient. So they leveraged a partnership with Instacart to offer a delivery option (which is also available in half of the Sam’s Clubs), as well as a one-hour pickup option for people who’ve purchased items through the Sam’s Club Now app at home or on the go.

What Scales?

At just four months old, Sam’s Club Now is an early crowd-pleaser. It remains to be seen how many of its innovations will be viable enough to deploy to the entire chain.

“We’re here to learn,” Garcia says, noting that he’s already started to challenge the team on how it can package up winning ideas and quickly scale them to all the clubs. “The membership tablet is a great example; that’s a no brainer,” he says. With the tablet, associates can sign a new member up in two minutes. “Today, it takes double that — if not more — to sign someone up in the club,” he says.

“We’re learning so much,” Garcia says. “Innovation isn’t a one-shot deal. We’re going to continue to push the experience.”