sam's club leadership team · leveraging ecommerce and digital capabilities driving club...

Sam's Club Leadership Team

1

Tim Yatsko SVP, Replenishment & Planning

Charles Redfield EVP, Merchandising

Todd Harbaugh, EVP, Operations

Whitney Head

SVP, General Counsel & Asset Protection

Rosalind Brewer

President & CEO Sam’s Club

Ann Bordelon SVP, Finance

John Boswell SVP, Marketing, Insights & eCommerce

Mike Turner

SVP, Membership

Ismat Mirza SVP, People

Strengthening focus on Member value

2

In-club efficiency

Member engagement

Merchandise relevance

Everyday

Needs Wow

Excitement Simple

Solutions

Superior value

to our

Members

Committed to “Savings Made Simple” framework

3

Superior

Value

& Growth

Differentiated

Merchandise

Lasting

Member

Relationships

Talent &

Continuous

Innovation

Efficient

Engaging

Experience

Anytime

Anywhere

Strong 1st half performance

4

Data thru July 31

(excludes fuel)

% Growth rates 1H FY13

Net sales 5.8%

Op. inc. 9.3%

4-5-4 Comp

1H FY12

1H FY13

4.6%

4.7%

5

Price and quality investments deliver results

Fresh meat

+7%

Dry grocery

+9%

Apparel

+12%

Baby care

+12%

Innovation drives operational efficiency

6

In-Club Logistics Capital

Club wage expense % of Sales

Average cost per remodel DC operating expense % of Sales

Engaging Members through digital platforms

7

Digital sales

Traffic

Orders

Financial scorecard

8

Sales

Gross profit rate

SG&A as % of sales

Membership income

Operating income

Financial priorities – unchanged & aligned

9

RETURNS GROWTH LEVERAGE 1 2 3

Superior value

through

merchandise

Accelerated

growth plan

Operational

productivity

Leveraging

digital

Membership fee

income

Focused on enhancing Member value

10

Superior

Value

& Growth

Differentiated

Merchandise

Lasting

Member

Relationships

Talent &

Continuous

Innovation

Efficient

Engaging

Experience

Anytime

Anywhere

Leveraging eCommerce

and digital capabilities

Driving club productivity

and experience

Delivering great merchandise

at a superior value

Enhancing our Membership

offering

4 1

2 3

Focused on enhancing Member value

11

Superior

Value

& Growth

Differentiated

Merchandise

Lasting

Member

Relationships

Talent &

Continuous

Innovation

Efficient

Engaging

Experience

Anytime

Anywhere

Leveraging eCommerce and

digital capabilities Driving club productivity

and experience

Delivering great merchandise

at a superior value Enhancing our Membership

offering 4 1

2 3

The right merchandise for Members

12

Merchandise drives value

13

Artisan Fresh Rotisserie

Chicken

Mighty Pop 50-lb

Bag

Assorted Pie

Sampler Sharp 90” LED

Television

$4.88 $21.98 $11.98 $9,998

Delivering what our Members want

14

Merchandising strategy drives Member value

15

Relevant and Exciting Merchandise Business Member Considerations

General Merchandise

Newness and Innovation

Differentiated Assortment

Allowing Small Business

Owners to:

Save Time and

Money

Enjoy Sustainable

Products

Access Solutions to

Make Their Jobs Easier

2 3 Pricing

Member

Ranking

Reasons Why Members Join

Sam’s Club??

1 Thought prices would be lower

than other stores

2 Wanted the option to buy in

bulk

3 Interested/curious about

shopping there

The #1 reason our Members join is

Price1

1

Everyday

Needs Wow

Excitement Simple

Solutions

1. Sam’s Club Demand Landscape (2012), The Cambridge Group Analysis

Focused on enhancing Member value

16

Superior

Value

& Growth

Differentiated

Merchandise

Lasting

Member

Relationships

Talent &

Continuous

Innovation

Efficient

Engaging

Experience

Anytime

Anywhere

Leveraging eCommerce and

digital capabilities Driving club productivity

and experience

Delivering great merchandise

at a superior value Enhancing our Membership

offering 4 1

2 3

17

Self Checkout Convertible register Tablet register Mobile checkout

Step 1

Step 2

Step 3

Step 4

Driving productivity through innovation

Member experience and engagement

enhanced by innovation

18

“All lanes open all the time” with “assisted checkout”

Member experience is first class

19

Sam’s Club received the highest numerical score among mass merchandiser pharmacies in the proprietary J.D. Power and Associates 2012 National Pharmacy StudySM. Study based on 12,764 total responses,

and measures 11 mass merchandiser pharmacies. Proprietary study results are based on experiences and perceptions of consumers surveyed July-August 2012. Your experiences may vary. Visit jdpower.com

“Highest in Customer Satisfaction with Mass Merchandiser Pharmacies”

-J.D. Power and Associates

Rank Company

1 Sam’s Club

2 Publix

3 A Credit Union

4 Chick-fil-A

5 Subway

6 Starbucks

7 H.E.B.

8 Winn-Dixie

9 Aldi

10 Sonic Drive-in

(2012)

Focused on enhancing Member value

20

Superior

Value

& Growth

Differentiated

Merchandise

Lasting

Member

Relationships

Talent &

Continuous

Innovation

Efficient

Engaging

Experience

Anytime

Anywhere

Leveraging eCommerce and

digital capabilities Driving club productivity

and experience

Delivering great merchandise

at a superior value Enhancing our Membership

offering 4 1

2 3

Digital engages more Members, more often

21

Online traffic by device Traffic growth by device

72%

17%

11%

Prior to the club

While shopping

Digital integrates club experience, offers expanded access

22

After shopping

Focused on enhancing Member value

23

Superior

Value

& Growth

Differentiated

Merchandise

Lasting

Member

Relationships

Talent &

Continuous

Innovation

Efficient

Engaging

Experience

Anytime

Anywhere

Leveraging eCommerce and

digital capabilities Driving club productivity

and experience

Delivering great merchandise

at a superior value Enhancing our Membership

offering 4 1

2 3

Membership trends continue to improve

24

Base

Business signups

Renewals

Upgrades

New Membership pilot: testing membership

value; fee options

25

New Membership pilot in Texas markets

highlighting more for our Members

Effective in 76 clubs as of Oct. 8th

New Membership pilot: three membership

types, fee increase

26

Sam's Plus

$100

Sam's Savings

$40 to $45

Sam's Business

$35 to $45

(no fee change)

New Membership pilot: more savings for all

Members

27

New Membership pilot: Plus membership

receives cash rewards

28

$10 cash rewards

for every $500 spent

Growth, leverage and returns remain

financial priorities

29

RETURNS GROWTH LEVERAGE 1 2 3

Superior value

through

merchandise

Accelerated

growth plan

Operational

productivity

Leveraging

digital

Membership fee

income

Accelerating new club growth

30

Sam’s new club growth

10-15

Capital expenditures update and forecast

31

CapEx Detail FY12

Actual

FY13

Projection

FY14

Projection

Total Capital Spend $0.8B ~$1B ~$1B

New Clubs 3 9 10 - 15

Relocation and Expansion 6 5 2 - 5

Remodel Projects 65 70 65 - 75

Savings Made Simple framework drives strategy

32

Superior

Value

& Growth

Differentiated

Merchandise

Lasting

Member

Relationships

Talent &

Continuous

Innovation

Efficient

Engaging

Experience

Anytime

Anywhere

• Strong performance

• Strategy remains consistent

– Member driven merchandising

– In-club efficiency

• Accelerated growth plan

– Piloting new Membership fee /

benefits structure

– New club growth

33