Sam's Club closed 63 stores in 2018, but it's already converted six of those closed stores into what it calls 'E-clubs' — mini distribution centers.
Getty/Scott OlsonIt has turned at least 6 of those closed stores into what it calls"E-clubs" — mini distribution centers close to population dense cities that can deliver goods quickly.CEO John Furner says the first clubs that were transitioned into the new format were given a small budget and forced to work"like a startup," borrowing equipment from other areas of Walmart."It was hard," CEO John Furner told Business Insider in a recent interview.
"It's really, really tight in terms of the assortment that's been curated to go in it," Furner said, noting that the locations are mostly stocked with small sortable items like consumables and food — anywhere from 1,000 to 2,000 different items depending on the time of the year.These E-clubs"are in locations that we thought about strategically where we've placed those that we can get a better proposition in terms of speed, economics," Furner said.
Sam's Club isn't stopping at six locations, with a seventh currently on the way, and more potentially coming after that, indicating the economics of the model make sense. Furner says Sam's Club will open more as shipping volume grows and the ones currently opened hit peak capacity.The new E-clubs are a part of Sam's Club's new focus on online sales. In Walmart's latest earnings report, the company said e-commerce sales for the warehouse chain increased 21% year over year.
The crew requisitioned a packager machine from another distribution center that wasn't being used, and borrowed forklifts from another part of the business.
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