Earthwise 2022: Sam's Club's New Mark
Sustainability.
No longer just a buzzword, it is now a focal point for retailers of all sizes as a growing number of consumers are paying greater attention to issues including climate change, environmental protection, recycling and waste management.
Although the topic of sustainability has been widely discussed for many years, the issue has gained momentum more recently with local governments across the U.S. driving the conversation. For example, a number of municipalities have prohibited the use of plastic shopping bags and some are going even further.
In Washington, the state recently passed legislation that by 2025 would eliminate the use of PFAS or per- and polyfluoroalkyl substances that are commonly found in various types of food packaging. The passage of the bill follows a study conducted by Toxic-Free Future (TFF), the University of Washington and Indiana University that found PFAS in 100% of breast milk samples from 50 mothers living in and around the Seattle region. Additionally, TFF released a study that found PFAS in most products labeled stain and water-resistant.
Today, most retailers have put in place a plan of action related to environmental, social and governance (ESG) standards that govern their behavior as it relates to each of these topics. For the environmental portion, retailers have developed corporate policies that address climate change and other issues related to protecting the planet.
The challenge for retailers and product suppliers is to come up to speed with new laws now in place and to stay ahead of future legislation that will impact products sold daily at stores across the country.
Store Brands’ special report Earthwise takes a look at the efforts of four leading retailers and the sustainability efforts of each. The report is highlighted by Sam’s Club and its recent announcement about its Member’s Mark private label assortment.
With sustainability at the forefront of this effort, officials with the Walmart-owned warehouse club share insight on this initiative and the factors that motivated the change.
Additionally, Store Brands spoke with Aldi, Albertsons and Southeastern Grocers to gain insight into the steps each retailer has taken to enhance their sustainability initiatives.
Sam's Club
In many ways, Walmart or a Walmart-owned division has an impact on the retail world much the way legislation in California eventually has a nationwide impact. As the nation’s largest brick-and-mortar retailer, any initiative put in place by Walmart, or in this case Sam’s Club, often reverberates across the retail landscape.
“Any initiative from Walmart is something that anyone would want to keep an eye on,” said Katherine Burkhardt, director of Brand Strategy with Daymon.
When Sam’s Club announced its major initiative with its Member’s Mark private label assortment, it caught the attention of many. The brand was launched in 1998 and in 2017 Sam’s Club consolidated its 20 proprietary brands under the Member’s Mark label.
Today, the brand can be found in a variety of categories including grocery, health and wellness, baby, apparel, home and furniture products, office and technology.
“As we introduce new Member’s Mark items and renovate existing ones, we are making decisions that not only focus on quality, innovation and value, but on the impact we are making on the world around us,” said Prathibha Rajashekhar, SVP, Private Brand and Sourcing with Sam’s Club.
Saying its customers increasingly were looking for products that offer quality and value and that also were on-trend and offer sustainability qualities, Sam’s Club repositioned Member’s Mark as a “purpose-driven brand.” Since 2020, the retailer said it has launched, renovated and reformed more than 1,200 items. As a result, shoppers are citing Member’s Mark products as a key reason for membership renewal.
“Our members are our biggest motivation,” said a Sam’s Club spokesperson. “Their expectations for quality, value and sustainability are aligned with our promise to build a better Member’s Mark brand. As we looked at our opportunity, we noticed that many of our Member’s Mark items had sustainability attributes. We then asked ourselves, ‘What would it take to continue to evolve (the brand) in a regenerative way?’”
But there was an additional line of thinking. Sam’s Club wanted its private label brand to go beyond sustainability and evolve into a regenerative brand dedicated to placing nature and humanity at the center of its business practices. As part of this effort with Member’s Mark, Sam’s Club aims to incorporate more recyclable, reusable and industrially compostable components into the brand’s items and packaging.
Additionally, the retailer also plans to take an active role in reducing the environmental footprint of Member’s Mark items in an effort to participate in Project Gigaton, Walmart’s signature private sector consortium that aims to reduce or avoid one billion metric tons of greenhouse gas emissions.
In developing the more than 1,200 items over the past two years, Sam’s Club officials called it a journey that its members and merchants took together. This meant the team at Sam’s Club needed to be open to real feedback from its shoppers in order to get the products right.
At the start of the effort in 2019, the retailer formed its My Member’s Mark Community. The 40,000 members provide feedback on products through the various stages of development, serving as a guide when developing a host of new products and giving Sam’s officials insight on the quality, value, trend and sustainability requirements shoppers demand.
Retail industry insiders said the effort by Sam’s Club to bring its customers into the Member’s Mark conversation early on was a smart move and one that likely provided a host of unique insights. Additionally, tapping the voice of consumers also provides Sam’s Club or any retailer sharpening its focus on sustainability the opportunity to understand the different viewpoints on the issue from various generations.
“The research we have conducted shows there are differences in what sustainability means to each generation,” said Darren Seifer, industry analyst, Food and Beverage with The NPD Group. “Depending on the group, there are differing viewpoints."
He noted that Gen Z shoppers have greater urgency when it comes to sustainability and are focused on what they see as a climate crisis and the impact of changing weather patterns. Millennials have similar views, but are also focused on buying products that provide what they feel are “great values.”
When developing–or in this case redeveloping–a product assortment, the challenge retailers continually face is making sure the items are meeting the needs of its shoppers. With sustainability, this challenge is further enhanced as consumers have little patience for buying products that fail to meet their high standards as it pertains to having little or no impact on the environment.
While Sam’s Club officials provided minimal insight into how the retailer worked to ensure its revamped Member’s Mark program avoided this potential pothole, the company spokesperson said, “We’ve worked with a variety of internal and external experts to ensue the mindset and targets strike a balance of being ambitious while also being achievable.”
As retailers such as Sam’s Club shine a brighter spotlight on sustainability, doing so by overhauling a private label product assortment may be a tactic used by others in the future.
“With private label a retailer certainly has more control over the product. They don’t have that same control when it comes to working with national brands,” said Burkhardt. “And investing in their private label products shows a high level of commitment to the issue.”
With its new Member’s Mark initiative now in place, the key for Sam’s Club is communication with all its members. The retailer has introduced a new logo and design construct that features a subtle checkmark in an effort to let shoppers know of the brand’s focus on “people and the planet.” The new logo and check will be seen on packaging over the next 18 months.
This communication effort is something that should be ongoing, said Andrew Moberly, senior director, Category Solutions with Daymon.
“As retailers roll out their sustainability plans, they are also sharing time frames with many targeting 2025,” he said. “As the plan moves forward, it’s important for retailers to provide regular updates. It’s information their shoppers want to know and it’s also interesting to watch as the plan progresses.”