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Sam's Club adds free shipping for Plus members

Sam's Club closings
Sam's Club closings 01:00

NEW YORK - Sam's Club is offering free shipping for premium members and simplifying its membership tiers.

Starting Wednesday, Walmart's (WMT) warehouse club will give free shipping on online orders for Plus members on 95 percent of the items it sells. Most shipping costs previously were based on the item's size and weight, the shipping method and the delivery address.

Free shipping and faster delivery have been key areas as retailers try to adapt to shoppers' shift online. Online leader Amazon (AMZN) is reportedly planning a new service to pick up packages from businesses and deliver them to consumers. Meanwhile, Target (TGT) late last year bought grocery delivery startup Shipt to speed up same-day deliveries.

Sam's Club is also converting its three membership plans into two. Sam's Plus will still carry a $100 annual fee, while the Business and Savings plans will convert to Sam's Club memberships with an annual fee of $45. The company is trying to better compete with rival Costco Wholesale (COST) by focusing on the more affluent customer. It has added more fresh produce and other higher-quality products.

Free shipping wars 03:34

"We are creating a new Sam's Club for our members," said CEO John Furner. He said the chain is targeting suburban families with children who have annual incomes between $75,000 and $125,000 -- which closely tracks Costco's core customers.

Last month, Sam's Club started closing 63 U.S. clubs and said it would convert up to a dozen of them to e-commerce fulfillment centers so it can be faster with deliveries. The idea is to get the fulfillment centers closer to the customers' homes.

Making Change at Walmart, a campaign backed by the United Food and Commercial Workers International Union, estimated at the time that the closures could affect about 10,000 jobs. Sam's Club executives said it's too early to tell how many workers who lost their jobs at the stores will get new positions.

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