Sam’s Club KOs Costco
Local advertising was the critical missing component in the July Brand Battle between Sam’s Club and Costco, two popular membership-based bulk-style retailers. While the two differed dramatically in social media strategies, non-functioning or a complete lack of localized outreach highlighted the need for these two brands to step up their games in the local marketplace.
Warehouse retailers Sam’s Club and Costco compete for customers with their prices, membership fees and product choices, and the two companies’ marketing strategies are no different. Sam’s Club competes with 650 U.S. locations (as of July 17, 2015) to Costco’s 457 U.S. locations (as of June 19, 2015) in the closest scoring Brand Battle yet.
Round 1 – Data Quality
WHY SAM’S CLUB WON: Strong online brand identity starts with quality data – accurate phone numbers and addresses, consistent messaging and complete information. For this analysis, Brandify used location data obtained from a major core data provider. Only minor data cleansing was performed in order to ensure the analysis reflected how the data is distributed. Sam’s Club has better data quality than Costco across the main review channels and also has more locations claimed across multiple channels, which may be the reason why their NAP (name, address, phone number) data is superior to Costco’s. Despite Sam’s Club having more locations than Costco, their data is approximately 15% more accurate than Costco’s and had an average of 6.6% more claimed locations across Yelp, Foursquare and Facebook. Sam’s Club also has more accurate data on Facebook, making a deeper local-social connection to their customers.
Round 2 – Local SEO
WHY COSTCO WON: Four key components make up the search evaluation for Sam’s Club and Costco: local pages, locator, website and on page factors, including page rankings across Google Maps and Bing Maps results for the keywords “Discount Store,” “Grocery Store” and “Supermarket.” Any result that ranked out of the top 10 was considered “Not Found.” While both brands received low rankings for the keywords, it was website optimization and locators that were the main point differentials for these brands. What made Costco the clear winner for this round was their website and locator optimization. Costco’s locator was much more user friendly and had a more branded feel than Sam’s club.
Round 3 – Reviews
WHY COSTCO WON: Costco beat Sam’s Club on both customer satisfaction rating and consumer sentiment in the reviews pillar. Brandify conducted an analysis across six different types of experiences a customer could have at both brands’ store locations, including service, quality of products, price satisfaction, deal offerings, cleanliness of store locations and staff satisfaction. Costco received positive sentiment for all experiences. Costco was 22% more likely to receive a 4 or 5 star rating over Sam’s Club customers, with 59% of all Costco reviews rated 4 and 5 stars. Sam’s Club customers left 1 star reviews twice as often as Costco customers.
Round 4 – Social Engagement
WHY SAM’S CLUB WON: No matter the size of the brand, an effective social media marketing strategy is essential, and that includes focusing on the right platforms. Both brands have strengths and weaknesses in their social media engagement strategy. Costco is more active on Pinterest and Instagram, while Sam’s Club is more active on Twitter and Facebook. The two companies had equal local relevancy rankings, but Sam’s Club is receiving more shares, comments, and overall following on social media, and won this round with its choices of media platform.
Round 5 – Local Advertising
WHY SAM’S CLUB WON: Based on research from SEMRush, Sam’s Club focuses more on search advertising than Costco. However, neither brands showed that they have true local advertising campaigns. Although Sam’s Club focuses more on a different type of keywords, they are neglecting the variation of branded keywords. From SEMRush, the brand only includes keyword variations “Sam’s Club” and “Samsclub,” while missing out on searchers using other keywords, such as “Club Sams”, “Sam’s” and “Sams Club.” A broad set of branded keywords would be more beneficial and would capture a wider range of potential customers. Both brands have set up local pages; however, neither is taking advantage of redirecting display ad links to local landing pages. According to “Google Tag Assistant,” Sam’s Club has a remarketing tag implemented on its website, but at the time of this analyzation, the tag was not working correctly.
Round 6 – Competitor Benchmarking
WHY SAM’S CLUB WON: While considering competitor locations and ranking factors from the previous five pillars, Brandify’s Search Engine Competitor report determined Sam’s Club and Costco both have about five competitors at the local level. Their top competition is Walmart Super Center, with Kroger, Dollar General, Family Dollar Tree and Safeway following. Due to data quality, social engagement and local advertising efforts, Sam’s Club barely managed to win the July Brand Battle over Costco.
Brandify Recommendations: Sam’s Club
Sam’s Club won the July Brand Battle by gaining points in quality data points, a winning social media strategy and slightly better local advertising. To maintain that edge over Costco, Brandify recommends the following improvements:
1 –FIX BUGS. The remarketing tag on Sam’s Club website should be reinstalled. To really push ahead of the competition, the Sam’s Club team could consider creating localized advertising campaigns.
2 – RETARGET CUSTOMERS. Retargeting is an efficient way push brand advertising in front of potential customers. It works by dropping cookies when a customer visits the Sam’s Club website, which allows the company to target that same customer with Sam’s Club ads when he or she visits other websites. Later, Sam’s Club can choose to bid higher to have its branded ad – for both search and display – shown to a pool of potential customers. The company can even go to the next level by combining this practice with localized ad campaigns and showing unique local deals.
Brandify Recommendations: Costco
Costco has a different strategy than Sam’s Club, but some things are clearly missing. Brandify made these recommendations that could help Costco improve its local branding strategy:
1 – IMPROVE ONLINE ADS. The first step is for Costco to create localized ad campaigns. These campaigns should link with local webpages and would help attract new customers.
2 – UPDATE KEYWORDS. When creating a list of keywords, Costco should consider branded and non-branded keywords, and also keywords that its competitors are using. Any way to differentiate will help the brand elevate itself in the eyes of consumers.
3 – USE REMARKETING. Costco is missing out on potential customers who, for example, may find the Costco website when searching for a particular product, but then navigate away from the Costco website and are never directed back to it. With a remarketing tag, Costco could find those customers again as they search other sites.
July Brand Battle Winner: Sam’s Club
The battle was scored using Brandify’s Social Data Matching (SDM) technology with data from various channels,* including Google, Bing, Facebook, Yelp and Foursquare and. Data was entered into the Brandify analytics engine to test the two companies’ local digital marketing footprint to determine a final Brand Score for each.
The Brand Score is calculated with an algorithm that consists of 250 variables grouped into six pillars: Data Quality, Local SEO, Reviews, Social Engagement, Local Advertising and Competitor Benchmarking.
With only five points difference between the final Brand Scores for Sam’s Club and Costco, this Brand Battle was the closest one Brandify has analyzed so far. Sam’s Club final score of 645 pointed to its success with strong, accurate location listings and engagement with customers. Costco’s brand score of 640 showed off a superior website locator and a different success with customers: reviews.
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*Other channels sources included in this analyses: Yellow Pages, MerchantCircle, Pinterest, Twitter and YouTube.
Brandify is transforming the way businesses connect to consumers by leveraging location technology and offering unrivaled personal service. Brandify has helped hundreds of brands understand and improve their local presence. Current and past clients include In-N-Out Burger, True Value, Jo-Ann Fabrics, Applebee’s, Black & Decker, and more. For more information about Brandify, go to brandify.com.