Apparently, Sam’s Club is getting into search engine marketing services. Sam’s Club is Walmart’s answer to Costco/Price Club. On the surface, this is an April Fool’s joke, right?
Wrong. This makes sense. For one parent company Walmart is all about offering discounts and introducing efficiency to inefficient markets. Say what you want about putting out mom and pop businesses, but did those companies really have strong businesses to begin with? Were it not Walmart, then someone else would have entered the market. That’s not the humanitarian in me speaking, perhaps, it’s the economist.
Walmart is no newbie to business, it has seen Google become one of the most valuable businesses in America thanks to search engine advertising and Walmart wants a piece. It would make little sense for Walmart to do many of the things that command high growth rates online, but SEM actually makes sense. The reason is actually quite simple and intuitive: most of Sam’s Club clients are small and medium sized businesses that are increasingly looking to use the Web to build a client base and promote their services.
From the company’s own boilerplate:
SAM’S CLUB is a low-margin, working warehouse, offering consistent savings on more than 4,000 items, from appliances to home or office supplies; from apparel to frozen foods, produce and baked goods. Members are traditionally small- and medium-business owners, or individuals who understand the value of the membership shopping format. Annual business memberships are $40, and individual memberships are $45 (both $5 less than the prevailing rates in this retail category).
As Google becomes bigger and bigger, it will turn its attention to Fortune 500 advertisers and global agencies, and many of the S&M sized businesses will continue to become increasingly disillusioned with Google. I am not saying Walmart will succeed, but I am saying that it makes sense to offer Sam Club’s mainly small business clients SEM services. I actually can think of a way Walmart could kill in this category, but for that, I expect at least a free membership to Sam’s Club.
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