Sam's Club CEO on Using AI to Empower Leaders and Drive Growth

Sam's Club is accelerating its AI strategy by deploying enterprise-grade ChatGPT tools directly to its frontline club managers. CEO Chris Nicholas explains how this technology is designed not to replace humans, but to free up their time for higher-value work, ultimately fostering a more relationship-driven retail model.

From Reports to Relationships: The AI Rollout in Action

The initiative was met with enthusiasm when announced at a company meeting. The core idea is to provide club managers—who are treated as "CEOs of their business"—with powerful tools to solve problems, remove bottlenecks, and make faster, more informed decisions.

Nicholas emphasized that the goal is to use technology in service of people, moving the retail experience away from being purely transactional and toward being relational.

Real-World Impact: How Managers Are Using AI

Just ten days after the rollout, Nicholas shared concrete examples of how the AI is already being used:

• Local Sourcing: Managers can instantly research and connect with local merchants and businesses to source new products, significantly speeding up the time to market.
• Event-Driven Merchandising: AI helps identify local sporting events or happenings that a manager might have missed, allowing the club to prepare and stock relevant merchandise quickly.
• Time Savings: One manager reported that tasks which previously took hours of analyzing reports now take minutes. This freed-up time is reinvested into developing associates and building stronger member relationships.

The People-Centric Philosophy: AI's Role in Headcount and Culture

When asked if AI adoption influences headcount, Nicholas was clear: the objective is growth and efficiency, not reduction. He pointed to the company's history of using AI, such as the "Scan and Go" system and computer vision exit arches, which have removed an estimated 200 million repetitive tasks from associates.

"We don't have fewer people," Nicholas stated. "We just have a bigger business and a more successful business." The strategy is to create an environment where work is less repetitive, allowing employees to focus on service and growth, which in turn improves member satisfaction and retention.

Differentiating in the Competitive Wholesale Channel

Beyond AI, Nicholas discussed how Sam's Club is standing out in a strong wholesale channel that includes competitors like Costco and BJ's. He highlighted the company's core DNA: making almost no profit on goods and instead relying entirely on membership income.

This model aligns all innovation—whether in product curation, pricing, or technology—toward a single goal: providing such compelling value and experience that members renew and refer others. Key differentiators include:

• Frictionless Experience: The combination of "Scan and Go" and AI-powered exit technology allows for a shopping trip that can be completed in under ten minutes, challenging the traditional notion that wholesale shopping must be slow and inefficient.
• E-Commerce Integration: Offering delivery to home at the same prices as in-club, a feature not traditional to the warehouse model.

This focus on value, convenience, and experience is resonating across demographics, with the fastest-growing member segment being Gen Z and millennials.