retail news in context, analysis with attitude

The Wall Street Journal reports that Walmart-owned Sam's Club "is quietly testing a new subscription service that allows customers to order items like diapers and printer cartridges online, a sign that Web retailers are posing a threat in areas of retail that were once considered relatively safe."

The "My Subscription" service is being positioned as a direct competitor to Amazon's highly successful "Subscribe & Save" service.

According to the story, "Until now, warehouse clubs like Sam's had been mostly insulated from the onslaught of online retailers like Amazon. Their main traffic drivers are fresh food, groceries and basic consumer products, which Amazon either didn't sell much of or sold at higher prices than the discount clubs.

"But that is changing as Amazon expands into those areas and builds similar customer loyalty. The Web giant's $79 yearly Prime membership has grown to 35 million to 40 million households, according to estimates from analysts at Sanford C. Bernstein—rivaling the more than 47 million-strong membership base at Sam's Club."

One difference between the two programs - Sam's is offering free shipping but no additional discounts on the 700 items it includes in the program, while Amazon offers both free shipping and discounts on the thousands of items in "Subscribe & Save."
KC's View:
First of all, this is very smart. I've never been able to fathom why more retailers haven't tried to crack the code on the consumer auto-replenishment model, since it has the potential to be a game changer in terms of sales and loyalty.

But one of the reasons it becomes so important is that Amazon isn't standing pat with Subscribe & Save … it continues to look for ways to drive more sales in the CPG segment.