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Sam's Club to outsource demo jobs

A sign on the front of a Sam's Club store.

TEXT OF STORY

Kai Ryssdal: Every now and then when you're doing your grocery shopping you get lucky, and there's somebody giving out a free sample of the latest chicken teriyaki or pumpkin cheesecake or whatever. If you shop at one of the big warehouse discounters like Costco or Sam's Club, those freebies are pretty much an everyday thing. That is why the news this weekend that Sam's Club is going to let 10,000 people go, many of them freebie-giver-outers, was kind of jarring.

First of all, Sam's Club had 10,000 people giving out samples and doing product demos? And also, who's going to give out free tastes when those people are gone? Marketplace's Amy Scott reports.


AMY SCOTT: Eddie Halpern finds product demos kind of annoying. They clog up the aisles at the Sam's Club where he shops in New Orleans. But even Halpern couldn't resist free veggie chips.

EDDIE HALPERN: I ended up buying them. And I think that was probably because of the whole mental aspect of seeing it and tasting it and saying, "Well, might as well grab a bag of that."

Sam's Club isn't ditching the free samples and product demos. Instead, the Wal-Mart subsidiary is hiring an outside company called Shopper Events to manage them.

Supermarket analyst Phil Lempert says nothing sells products better than samples.

PHIL LEMPERT: There's no replacement for free food. So if you can get a new product in someone's mouth, and then hand them a high-value coupon at the same time, the incidence of them turning into a consumer that shopping trip is enormously high.

Sam's Club says outsourcing its demos is about improving sales, not cutting costs.

Retail consultant George Whalin isn't buying it. Earlier this month, Wal-Mart said it would close 10 Sam's Club stores and cut 1,500 jobs. Whalin says the company wants sample-driven sales without the hassle and expense.

GEORGE WHALIN: They've gotta worry about scheduling these people, and they've gotta worry about making sure the people show up, and if they don't show up, they've gotta get some more people to come in and do it, it's just a management headache.

Sam's Club says the 10,000 mostly part-time workers affected can re-apply for jobs at Shopper Events. Another 1,200 people who recruit new members will also lose their jobs.

I'm Amy Scott for Marketplace.

About the author

Amy Scott is Marketplace’s education correspondent covering the K-12 and higher education beats, as well as general business and economic stories.

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