Sam's Club names VMLY&R its first agency of record after review
Never a big spender and long in the shadow of sibling Walmart, Sam's "blown away by caliber of competiton."
Sam’s Club has named WPP’s VMLY&R as its first agency of record as the retailer, long in the shadows of giant corporate sibling Walmart and bigger club store rival Costco, looks to step up its marketing.
The move follows a review, conducted entirely over Zoom and handled by Select Resources International, that included five agencies that Senior VP-Chief Member Officer Tony Rogers declined to name. M.J. Cameron, senior director-creative and content for Sam's, was also involved in the review.
“We were blown away by the caliber of the agencies showing up,” Rogers says. “Sometimes, even internally, you think of us as a subsidiary of Walmart. And then you put an RFP out there, and you see the market realizes how big Sam’s Club is.”
Rogers notes Sam’s Club “in the U.S. alone is bumping up against $60 billion in revenue, and globally it’s $75 billion,” which would make it a Fortune 50 company on par with Disney or Starbucks as a standalone entity. But it’s never been a major media spender, with most of its annual TV outlay in recent years coming from co-op ads backed by mattress supplier Serta, per iSpot.tv.
Having an agency of record for the first time doesn’t mean Sam’s Club will suddenly turn into a big media spender either, Rogers says. Much of its marketing will continue to be direct digital and mail communications with members.
“It’s wasn’t a brief that says there will be five TV spots, five social media posts, three radio spots,” says VMLY&R Global CEO John Cook. “You see a lot of that. This is about what’s the essence of the brand. It’s our job to figure out where to put that.”
The new agency comes the day Sam’s reported some of its best results in recent memory for the fiscal fourth quarter ended Jan. 31, with U.S. comparable-store sales up 10.6%, e-commerce sales up 42% and membership revenue up 12.9%. Rogers says for the full year Sam’s Club added six times more members than it did a year earlier, with renewal rates up 4 percentage points, both of which are crucial for club stores that make their profits largely from the annual membership fees.
Sam’s has worked on a project basis for many years with a long line of prominent creative shops, including Strawberry Frog, the Via Agency and most recently MDC Partners’ Mono, which quit the account last year to return to work for rival Target after Sam’s sibling Walmart dropped the shop from its roster.
Under Rogers, who came to Sam’s in 2018 after serving as U.S. chief marketing officer of Walmart, the club chain also has upped its creative game. That includes an ad featuring Olympian Usain Bolt for Scan & Go—a prime-time homage to the heroism of Sam’s employees last March—and a promotional tie-in to the long-running faux feud between Ryan Reynolds and Hugh Jackman.
VMLY&R has some history with Sam's. Rogers, Arkansas-based Rockfish was a longtime digital agency for Sam’s with work that included development of the user interface for the retailer’s Scan & Go checkout app. Rockfish, acquired by WPP in 2011, merged into VML in 2017 and then into VMLY&R in 2018.
But those prior ties didn’t factor into the decision, Rogers says. And Cook says the key office handling the account will be Kansas City, though the agency also retains a Northwest Arkansas office dating to Rockfish days.
One thing that attracted him to VMLY&R was its work for Wendy’s, which he’s admired for some time, Rogers says. “Part of the magic of this for us is the digital DNA of the company, but we also think they have the horsepower to help us keep infusing the brand into pop culture and keep finding the next iteration of these social media programs we’ve been doing.”
Rogers says he also was impressed by VMLY&R’s diversity. “When I looked at their team, it felt like I was seeing America,” he says. “I was seeing the same diversity I see in our membership base, and that was really appealing.”
“Something a lot of agencies fall into is have diversity represented in HR, and it’s just not authentic if it’s not in the work,” Cook says. And he says the pitch didn’t involve a “diversity moment stuck at the back. There was never a diversity moment. There was diversity.”