Sam's Club marks opening of first in national web of e-commerce centers

Wayne Risher | Memphis Commercial Appeal

Show Caption Hide Caption Inside Sam's Club Memphis e-commerce center Sam's Club first regional e-commerce fulfillment center is operating in former Sam's Club at 1805 Getwell in Memphis.

Sam’s Club on Thursday marked the opening of a new Memphis e-commerce fulfillment center that's part of a push to beef up online sales.

It’s the first in a national network of regional centers intended to help Sam's Club and parent company Walmart step up competition against Amazon and others in the growing digital marketplace.

Early results indicate Sam’s Club is getting results with a strategy that includes free shipping on most orders for Sam’s Club Plus, which is seen as a competitor to Amazon Prime.

Sam’s Club posted an online sales increase of about 25 percent in the January-March quarter, boosting overall sales 5.2 percent excluding fuel and tobacco.

The center is located in a former Sam’s Club at 1805 Getwell that closed Jan. 11.

Walmart officials said the conversion to fulfillment center took less than four months. The first package shipped in 46 days, in mid-March, though the facility is still ramping up to full capacity.

“We moved fast to bring this FC (fulfillment center) online, and I’m proud of the team that made this happen,” said Mohan Akella, vice president of online supply chain for Sam’s Club. “This FC is going to make sure our members get their orders even faster, and we’re excited about what this means for our business.”

Sam’s Club is considering other fulfillment centers in Texas, central Florida, the mid-Atlantic, Southern California, Chicago area and the Northeast. At least two more are expected to open before year's end.

More: These Memphis gourmet food makers are vying for Walmart shelf space

More: Sam's Club closes on Getwell, expected to be converted to e-commerce fulfillment center

Sam's Club is banking on regional centers in Memphis and other key markets to enable next-day or two-day shipping to most members.

Akella said each center will serve a region where there's concentrated demand for Sam's Club products. The Memphis center has been loading up on inventory gradually, focusing on products that are in highest demand among internet shoppers.

Sam’s Club officials cited the proximity of a “major regional shipping hub” five miles from the Memphis center, which covers 135,000 square feet. The FedEx Express world hub is about three miles away at Memphis International Airport, and the nearest FedEx Ground hub is eight miles away.

While there is a UPS facility at the airport, analysts say Walmart and Sam’s Club are more closely aligned with FedEx because UPS is a bigger partner of Amazon. Officials said FedEx is handling deliveries for the new Memphis center.

More: Experts see FedEx gains coming as Sam's Club adds free shipping to boost online sales

FedEx'ing Sam's Club Sam's Club's big plunge into online retailing should create more business for FedEx. The Walmart unit's first e-commerce fulfillment center will be in former Sam's Club at 1805 Getwell in Memphis.

The Getwell center employs about 50 full-time employees, while the store previously employed 162. Most store employees found work at other area Sam's Clubs, but a few landed at the new center.

Richard Eakin, a 30-year Sam's Club employee who had been an assistant manager at the Getwell store, applied for a job at the new facility as soon as he heard the store was closing. He's the center's asset protection manager.

"It's absolutely great," Eakin said. "The company has really done a good job of repurposing it, and I think it helps the community."

Ben Cook, senior vice president of Sam's supply chain, said, "We picked this site as a test and learning facility. We're looking at, from an innovation perspective, how do we make sure we're able to receive product in and ship it out in a timely manner.

"We're looking at how we can drive speed and ultimately make our members' lives easier through the use of this type of facility in the future. And so, for us, Memphis is important because it's helping us define what that future facility looks like."

Charles Dodge, an ex-Marine and logistics industry veteran who is general manager of the center, said he jumped at the chance to create something new. "I wanted to be part of this on the ground level," he said.

Dodge said, "We’re excited Memphis was chosen to be the home of the company’s first (fulfillment center). We appreciate the support of the community as we’ve converted the club and look forward to continuing the great partnership we have for years to come.”

In recognition of the community support, Sam’s Club announced donations of $1,000 to the Memphis Police Department, $1,000 to the Memphis Fire Department and $1,000 to YWCA Abused Women’s Services.

The first package shipped from the facility was a 100-count box of coffee pods to John Furner, Sam’s Club president and chief executive, the company said.

Reach reporter Wayne Risher at (901) 529-2874 or wayne.risher@commercialappeal.com.