Dive Brief:

• A Sam's Club near Chicago that closed in January will be repurposed into an e-commerce fulfillment center for the retailer, the Chicago Tribune reported. 
• There are tentative plans for the distribution hub to be operational by the end of the year, according to the Tribune. A spokesperson for Walmart told Supply Chain Dive the retailer is still working with the city and has not yet finalized plans and timelines.
• The center will be Sam's Club's second store retrofitted into a fulfillment center. In June, the retailer converted a store into a fulfillment center in Memphis, according to a press release.

Dive Insight:

At the beginning of the year, Sam's Club said it would close 63 stores across the country, as part of a strategy to transform its business and develop a "strong fleet of Sam's Clubs that are fit for the future." 

For the retailer, "future" translated into e-commerce, as its online sales grew 25% in the first quarter of 2018.

At the time of the store closure announcement, Sam's club said it would retrofit 12 of the closing stores into e-commerce fulfillment centers.

Memphis was the first one, and now it appears Chicago is next. The retailer said it is also considering conversions in Texas, Central Florida, the Mid-Atlantic, Southern California and the Northeast. 

The repurposing of closed stores "comes at a time of growth and investment in the company’s omni-channel shopping experience," Sam's Club said. 

The retailer offers free shipping on almost all items to Plus members, who pay $100 annually, a move that seemingly seeks to rival Amazon's Prime Service.

To compete with the e-commerce giant and fulfill online orders cheaply and quickly, Sam's Club is strategically choosing locations for its hubs that are close to large swaths of consumers. Its Memphis fulfillment center "is conveniently located five miles from a major regional shipping hub," the retailer said, and the Chicago center will serve members in a several hundred-mile radius of Chicago, according to the Tribune.

If Sam's Club follows through with other planned conversions, it will target additional high population density areas, such as Southern California and the Northeast, allowing it to serve many customers from one center. 

"Over time, Memphis and the network of additional smaller FCs will give Sam’s Club the ability to bring next day or two-day shipping to most members," the retailer said.