story by Kim Souza
ksouza@thecitywire.com
As part of the company’s pledge to do more more members, Sam’s Club is now offering assistance with car and truck purchases. The warehouse club giant announced Thursday (Sept. 3) a new partnership with TrueCar, an online auto marketplace that seeks to take the hassle out of price negotiation.
The concept is not a new one. Sam’s competitor Costco has offered its own automobile purchase program since the early 1990s. Earlier this year, Costco said it had sold nearly 400,000 automobiles of all makes and models through its purchase program. AARP, USAA and other membership programs also offer car-buying assistance.
Sam’s Club previously offered its members contact with dealerships over the past three decades. But the company said this is the first time it has partnered with a national marketplace such as TrueCar.
“Whether it’s your first car or your sixth, the process of purchasing a vehicle can be a daunting task. We’ve chosen to re-launch our auto buying program with TrueCar based on their proven ability to bring car buyers a best-in-class experience,” said Seong Ohm, senior vice president of merchandise business services at Sam’s Club. “Our auto buying program will save members both time and money.”
Sam’s Club’s newly revamped auto buying program will provide guaranteed savings off the manufacturer’s suggested retail price (MSRP) on new cars and access to exclusive member savings on used cars. TrueCar says it has saved consumers more than $3 billion on auto purchases. At launch, Sam’s Club members will have access to more than 10,000 TrueCar Certified Dealers nationwide – more than three times the nearest competitor in the warehouse club channel, Ohm said.
Sam’s Club members access SamsClub.com/auto from their computer or smartphone, enter their location and desired type of car, see what others in their market paid for the car they want, then browse pricing information from local dealers. Once members are satisfied with their choice, they print their guaranteed savings certificate or bring it on their mobile device to the selected TrueCar certified dealer to finalize the purchase.
One of the groups Sam’s Club is hoping to target with the TrueCar partnership are Millennials. A recent survey by J.D. Power and Associates found more than 65% of Millennials believe buying a car is one of the most intimidating purchases they can make. More than half of the respondents say negotiating a car price is worse than a trip to the dentist.
Sam’s execs said this new program empowers members with pricing information prior to the purchase. TrueCar said it has seen more than 2 million cars purchased through its dealers using this platform.
The average savings off of MSRP new car prices for TrueCar purchase programs is $3,000. There are 10,000 dealerships in the network for new cars and access to 500,000 used cars as well. There is also a 3-day return policy for used car purchases.
There is also the option to earn a buyer’s bonus worth up to $2,000 in auto repair reimbursements.
This new “improved” version of auto purchase program comes at a time when Sam’s Club continues to focus on its service offerings. It recently unveiled its Free/4/10 prescription program for its Plus members and Club Pickup was also rolled out across the nation in addition to the online “Shocking Value Deals” offered each day on the retailer’s website.
Lackluster comp sales have plagued Sam’s Club for several quarters, rising 1.3% excluding fuel in the retailer’s second quarter. That increase related to an 0.80% higher tickets and 0.50% in traffic growth, according to CEO Rosalind Brewer’s comments in the Aug. 18 earnings transcript.
“Since last year, our investments have been targeted to better merchandise assortment, membership acquisition, engagement and 26 retention, new programs to enhance member value, and our investment in e-commerce ... We saw the benefits in improved membership trends and higher traffic during the second quarter,” Brewer noted in the earnings call.
Membership and other income grew 6.1%, with membership income up 5.8%, driven in large part upgrades to the more expensive Saving Plus level.