Sam’s Club, a Walmart-affiliated membership-based retailer, shut down a large number of locations this week with little notice. While the situation offers not much in the way of good news, it does provide some useful takeaways for associations.
Business decisions happen—and sometimes, they affect a whole lot of people. Like your members.
This week, Walmart is learning the hard way about the frustrations that come with trimming back on a membership program. Its popular Sam’s Club chain closed a number of locations overnight, with little notice provided to customers or employees. In all, 63 stores will be closed in the coming weeks.
That led to a lot of complaints over the number of suddenly laid-off workers, as well as the fact that many customers had just renewed their $45 annual membership.
“I went to the Orange, Connecticut, location, and was shocked to learn from an employee, crying in the parking lot, that the club was closing permanently on the 26th and was closed the whole day today,” customer Cynthia Garofalo told Business Insider. “It really caught everyone off guard, especially the people that needed to pick up their prescriptions. What a mess.”
Walmart has pledged to pay laid-off workers two months of wages plus a bonus, as well as severance for eligible employees.
Even if an overnight shutdown seems unlikely for your association, the Sam’s Club situation offers some lessons about sunsetting products or services that are worth paying attention to. Among them:
Make sure you’re fulfilling critical needs. While Walmart closed some Sam’s Club locations entirely on Thursday, it promised that pharmacy locations would remain open for at least two weeks as it transferred customers over to new stores, according to CNBC. Likewise, if your association is sunsetting a service, you may need to cover critical needs as part of the process.
Offer other services or refunds. It’s possible that your organization will be able to serve member needs in other ways, but if you can’t, budget for refunds. Sam’s Club is offering a free three-month extension on membership for those affected by a store closure, along with an option to receive a refund the $45 membership fee.
Watch the competition. It could be that you’re on the outside looking in, when another association in your space ends an offering. You may be able to fill the void. After the Sam’s Club announcement, the competing chain B.J.’s immediately stepped up promotion of its similar program and pointed out that it’s hiring.
Of course, offering the maximum amount of notice possible is also a good idea, based on the criticism Walmart has received this week.