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Sam’s Club’s McLay on ‘the profitability paradox’

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The pandemic may have given new clout to consumers but it's also opened doors for nimble and innovative retailers

NEW YORK – The pandemic has put consumers in the driver’s seat: it’s a truism voiced repeatedly at this week’s NRF Retail Converge conference.

Kath McLay, president and chief executive officer at Sam’s Club, shares the sentiment, and thinks the new normal also is an opportunity for retailers willing to engage consumers on their terms.

McLay

Kath McLay

“It’s up to us to be clever, to continue to adapt to the environment. You have to make sure to continue to create value for members in ways that delight them,” McLay said during a “fireside chat” with Deloitte’s Rodney Sides during the virtual conference.

“We didn’t anticipate being [this deeply involved] in curbside pickup or delivery from the clubs, but that’s where we need to be to continue to transform and play in that space,” she said. “But if you put members at the center of it, it’s going to be your North Star and keep you in the right direction.”

McLay, a native of Australia, joined Walmart in 2015 and took the top job at Sam’s Club three months before the pandemic hit. Keeping associates and members safe became an early priority. The emphasis on health and safety drove adoption of contactless payments through the warehouse club’s Scan and Go app and prompted a national expansion of curbside pickup, she said.

McLay also devoted time and effort to making sure Sam’s Club consistently delivers on its promise to members that they can “expect something special” from the club.

“Members pay to shop with us, and they should find products that delight them,” she told Sides.

Another McLay goal is creating an environment where associates (Sam’s Club employs about 100,000) are proud to work. Creating clubs which serve as showrooms where people want to shop and work takes money, she acknowledged, and a willingness to adapt.

“My history in retail has taught me that if you put profit as the primary goal, you’ve failed,” she said. “I think you always have to start with ‘how am I creating value’? At Sam’s Club, we boil it down to great items at disruptive prices.”

Added McLay, “There’s ample opportunity, if you bend your mind to it and you’re clever and smart, to continue to be profitable and to grow at the same time.”


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