Sam’s Club may look like your typical warehouse retail membership club at first glance, but when you look out over pallets of packaged food and tabletops stacked with designer clothes, Sam’s Club uses technology to You can tell that we are committed to improving the member experience. , as they are called – and its own operation.
Case in point — The company introduced the Scan and Go mobile phone app in 2016, allowing customers to scan barcodes themselves using their mobile phones and click a button to checkout and pay, allowing them to complete checkout. Made it possible to avoid columns.
Shopping for members who used it in 2016 has become more convenient.
But when the pandemic hit in 2020, it really stood out as a foresight. Scan and Go offered a contactless shopping experience when COVID guidance was to keep “social distancing” by keeping her 6 feet away from other people. The app allowed members to complete their purchases while avoiding close contact with others at the club.
Vinod Vidalcoppa In February 2020, just before the pandemic hit, he joined Walmart-owned Sam’s Club as CTO, serving in the organization’s technology leadership. One of his priorities is for the company to respond to improvements in everything from the productivity of the organization’s approximately 600 retail stores, e-commerce channels, distribution and fulfillment centers to supply his chain. It was to modernize our technology infrastructure.
Bidarkoppa recently connected with InformationWeek to talk about the pandemic, Sam’s Club’s infrastructure modernization program, and how warehouse clubs are using artificial intelligence. Here are some excerpts from that conversation.
You joined Sam’s Club after a career in other consumer businesses. Please tell us why you decided to join the company.
When I interviewed for this position, I still remember them saying, “Hey, we’re a $50 billion startup.” I’ve never heard “$50 billion” and “startup” used in the same sentence. And I thought, this is where I want to be a part of.
How have you been doing since joining the company?
We have had quite a few rides since then. It is a warehouse channel that is a little different from mass retailers. Walmart is not Sam’s Club. For us, it’s all about the membership model. People pay to shop with us. Likewise, the club has a very curated set of items and we want to bring in the best items.This is a phenomenal growth story for us. I think we’ve added probably over $20 billion alone and we’ve had double-digit growth over the last 10 quarters. Underlying it, however, is the importance of technology to this growth. It’s evident everywhere. Technology was a big pillar for Sam’s Club.
What is the driving force behind that growth?
We think about where technology can make a difference for us. Whether it’s clubs, DCs (distribution centers) or FCs (fulfillment centers), technology permeates every part of your business, whether it’s growing your business, driving membership acquisition, or increasing productivity. It is very important and fundamental as it enables our business to grow.
Those are many initiatives. How did you set your priorities?
When I joined the company, there was no one in this position for almost a year, so there were vacancies. First of all, what strategy are you trying to implement? Sam’s Club has a diamond strategy. Basically, it’s about how you differentiate on convenience. How do you lead on price? And how do you match quality and assortment with your competitors?
We take that business strategy and look at the gaps and challenges to make it happen, and where are the technology perspectives. That was the starting point.
And while we’re still trying to do that, the pandemic hit us just at the beginning of 2020. What do you need to do here now? Because everything changed between 30 and 45 days in March and April. Have you changed your behavior? All the members wanted to shop differently than we did. We were missing some channels that we wanted, but they are now up and really mature.
First, we thought about how we would actually deliver this new channel experience so that our members could shop the way they wanted. That’s when we launched Club Pickup. So much energy and effort has gone into launching that channel for its members.
Another thing that’s happening on the supply chain side is how do we increase productivity so that we can batch some of our orders together? Are you incorporating AI and machine learning as part of what you do internally? [distribution centers] When [fulfillment centers]? How do you simplify supply chain processes for your distribution center?
How does that translate to Sam’s Club’s technical infrastructure?
We started looking at the core elements of our technology investment strategy. How would you go about implementing these initiatives?The strategy he divided into three buckets. One relates to new member channels and revenue growth channels. The second is how clubs and supplies drive productivity platforms across his chain space. With Sam’s Club founded in 1983, the last and most important bucket for us was how to future-proof our business. Clearly, there are many legacy processes and many legacy systems and platforms.
And we have grown tremendously. As we close out this last quarter, we have a record number of members since we first started. We’ve introduced these new units to the club both online and offline, and we’re also looking at some of the legacy systems that were still in use with the tremendous growth we’ve seen in e-commerce platforms. We need to redesign this process, redesign these systems, retire old legacy systems, and invest in technology to enable next-generation systems.
Does that mean moving to the public cloud?
Basically, we are using about 80% on the public cloud. We have completely rewritten our entire digital e-commerce platform on the public cloud. We completely rewrote the membership platform that was on the mainframe and moved it to the public cloud. Provides a warehouse management system used in supply chains and distribution centers. This was on traditional mainframe systems. Implemented packaged software on public cloud.
We are a cloud-first company. Whether it’s supply chain modernization, membership modernization, or an e-commerce digital platform organization, these have all been the hard work we’ve done over the last two and a half years to move to our next-generation platform. work. Not only does it grow, but it also increases the productivity of your club system and supply chain system.
Which public cloud are you using?
We straddle multiple clouds. We use our cloud partners to our advantage. Our ultimate goal is to achieve a hybrid cloud platform that combines private cloud with Azure public cloud and Google Cloud. The balance of these three gives us the best combination and the best cost.
What about AI? Tell us about one of your AI projects.
There is an initiative called Inventory Recognition as a Service. It’s a camera-mounted scrubber that goes clubbing many times a day, capturing about 17 million images each day. We label all those images. This removes a lot of tasks that club employees would have had to do without automated task completion. It’s all computer vision based. Insufficient or out of stock. All the information comes back so you can systematically deal with it.
Are these tools developed in-house? Do they use platforms or open source?
These are all custom, homegrown technologies developed in-house and a combination of great work done in-house by our product and technology teams. These are generally open source and of course use a cloud stack, but not a packaged implementation.
Are there other elements that Sam’s Club needed to implement these modernization initiatives?
We talked about technology being the long stick in the tent, but it’s really culture and organization that makes it happen and helps make this happen. A member’s obsession is what drives us all… The first thing we do every Monday morning is check her NPS (Net Promoter Score) for all major journeys. If your NPS drops, consider what you can do to improve your member experience and associate experience.
What to read next:
https://www.informationweek.com/strategic-cio/sam-s-club-cto-talks-infrastructure-modernization-ai The Technology Behind Sam’s Club, Walmart’s Membership Warehouse Store