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China Research Network
US retail giant Costco has seen rapid capital growth in recent years through the sale of its gold bar and silver coin business. According to a Wells Fargo research report, Costco began selling gold bars online in August last year and has since increased sales of pure gold bars, selling for about $2,000 per ounce. In addition, the company began selling silver coins, such as the 1-ounce Canadian Maple Leaf Silver Coin, which went live earlier this month, priced at around $680 and sold out quickly. According to the report, Costco's bullion business could generate up to $200 million in monthly sales, demonstrating its strong performance in this area.
As a warehouse supermarket, Costco undoubtedly sees great potential in the precious metals market by expanding its gold and silver sales business. As the price of gold has reached record highs, so has the enthusiasm of the American people for gold, which has partly contributed to the rapid growth of Costco's bullion business. The rapid sales of gold bars and silver coins also reflect consumers' recognition of precious metals as a store of value.
In addition, the success of Costco's bullion business is also due to its unique sales strategy. For example, the company timely adjusts the product variety and price according to market demand to ensure that the product can be quickly accepted by the market. At the same time, Costco has also achieved rapid promotion and sales of gold and silver products through its large membership base.
However, while Costco's bullion business is currently performing strongly, it also faces some challenges in the long term. For example, the price of precious metals is highly volatile, and a significant drop in market prices can have an impact on a company's sales. In addition, as more and more retailers enter the precious metals sales market, Costco needs to continue to innovate and improve its service quality to maintain its competitive edge.
Overall, Costco has achieved rapid capital growth through the sale of gold bars and coins and has demonstrated its strength in the precious metals sales sector. However, companies also need to pay close attention to market dynamics and flexibly adjust their strategies to respond to possible market risks and challenges.
In the face of changes in market demand, it is important for Costco to adjust its sales strategy. Here are some possible strategies:
First and foremost, an in-depth understanding of market demand is the first step. Costco's sales team needs to conduct comprehensive and in-depth market research on the industry, products and target customers, including paying attention to industry news, participating in relevant exhibitions, and conducting in-depth conversations with customers in order to accurately grasp market trends and consumer needs.
Secondly, based on the results of market research, Costco should adjust its sales strategy for gold and silver products in a timely manner. This may include adjusting product positioning, such as launching a more diversified range of gold and silver products in line with consumer demand for investment and value preservation of gold and silver products; Or adjust your pricing strategy to respond to fluctuations in market prices.
Optimizing inventory and warehouse management strategies is also key. Costco needs to ensure a stable supply of bullion products to avoid under-stocking and affecting sales. At the same time, by optimizing warehouse management, operating costs are reduced and operational efficiency is improved.
In addition, customer relationship management is equally important. Costco can enhance communication and interaction with consumers by providing regular member newsletters and emails to provide members with the latest product information and promotions in a timely manner. Not only does this increase customer satisfaction, but it also helps foster customer loyalty.
Finally, Costco can also consider expanding its sales channels. In addition to online sales, you can also consider setting up a dedicated sales area for gold and silver products in your physical store, or working with partners to promote your products to expand your sales reach.
To sum up, Costco needs to pay close attention to market dynamics and flexibly adjust its sales strategy to meet changes in market demand. By gaining a deep understanding of the market, optimizing product strategies, strengthening customer relationship management, and expanding sales channels, Costco can respond to changes in market demand and achieve sustained and stable growth.
Through a series of in-depth and systematic research activities, Costco has successfully grasped market trends and provided strong data support for its business decisions. Here are the key steps of how Costco can grasp market trends through research:
First of all, Costco focuses on qualitative customer ideas. This includes having in-depth conversations with customers to understand their views on the current market, demand for the product, and predictions for future trends. In this way, Costco can obtain first-hand market information and gain insight into the real needs of consumers.
Secondly, Costco conducts quantitative research and analysis of the market and selects strategic products. By designing questionnaires, collecting data, and analyzing them, Costco is able to quantify market demand and identify potential product areas. This data-based decision-making approach makes Costco's product strategy more accurate and effective.
In addition, Costco also conducts demand research for specific product series. For the selected products, Costco will further refine the research content to understand consumers' expectations for product features, price acceptance, and brand perception. This research method helps Costco to get closer to consumer needs in the process of product design and promotion.
At the same time, Costco also pays attention to customer satisfaction surveys. After the product is launched, Costco collects customer feedback through questionnaires and other means to understand the market performance of the product and customer satisfaction. This research method helps Costco to identify product deficiencies and optimize them in a timely manner, improving customer satisfaction and loyalty.
Finally, Costco is also adept at leveraging data and trend reports within the industry. By following reports published by authoritative organizations in the industry, Costco is able to understand the overall development trend of the industry, the dynamics of competitors, and changes in policies and regulations. This information provides an important reference for Costco's strategic decision-making.
In summary, Costco has successfully grasped market trends through a series of comprehensive research activities, providing strong support for its business decisions. This data-based decision-making approach enables Costco to stay ahead of the market competition.
According to the analysis of the research report of the China Research Institute of Puhua Industry
The supermarket industry ushered in a "big reshuffle". In October 2020, the first Hema X member store opened in Shanghai, and by the end of 2023, there are 10 Hema X member stores in China; Costco, which is open a fire one, is "in full swing" and is expected to open 33 stores in fiscal 2024; Sam's, who has been in the Buddhist system for 27 years, has begun to accelerate, and officials say that it expects 6 to 7 new stores to open every year in the future; Fudi, known as Sam's "apprentice", is also accelerating its layout, and the number of stores has caught up with Costco.
Membership supermarket is a large-scale retail format with membership as the threshold for entering the market. The target consumer group of the membership-based supermarket retail format is the middle- and high-income group in China's first- and second-tier cities. Supermarkets select cost-effective products around the world, reduce costs through the business strategies of large-scale procurement, operating their own brands, warehousing and sales two-in-one, and upward vertical integration of logistics enterprises, and achieve profitability through the difference between membership fee income and product prices.
The main features of the membership supermarket are as follows:
1) Large floor area. The business area of a single store in a membership-based supermarket is usually more than 14,000 square meters, with a large parking lot;
2) The variety of goods is fine. Single-store SKUs are usually not higher than 5,000, private brands account for about 40%, and overseas goods in different supermarkets range from 10%~40%, and are quickly optimized and iterated with an annual replacement rate of 30%~40%;
3) Chain operation. Membership-based supermarket companies mostly compete around the cost performance of products. The business format requires large enterprises to provide efficient, high-quality, and relatively low-cost supply chains and logistics chains through chain operations, with the scale advantage of procurement costs and vertically integrated capital accumulation, so as to gain competitive advantages.
The upstream of the membership-based supermarket industry chain is product suppliers, logistics providers and e-commerce platforms, while the midstream is membership-based supermarket enterprises, including overseas traditional membership-based supermarket companies, such as Sam's, Metro, COSTCO, etc., local new membership-based supermarket companies, such as Fudi, Hema Fresh, etc., as well as hypermarkets such as Carrefour.
Costco, Sam's and other membership-based warehouse supermarkets adopt a single-track subscription membership system, and subscription membership is the premise and threshold for consumers to carry out shopping behavior. The operating income of this type of enterprise is composed of two parts: net sales of goods and income from membership fees. Low gross margin operation, commodity gross profit is only used to cover operating costs; Enterprises do not rely on the sale of goods to earn profits, and the net profit mainly comes from membership fee income.
Compared with ordinary retail enterprises, Costco focuses on the membership model, and only members with membership can purchase goods in the store. As a leader in the paid membership system in the retail industry, Costco launched a membership system in 1982. After three changes in the company's membership system, a mature and complete membership system has been formed.
Costco's operating profit mainly comes from membership fee income. With the product and service of "how fast, good and cheap" to maintain the demand of members, the number of members continues to grow.
From 2012 to 2022, the market size of China's warehousing member supermarket industry continued to grow, and the data showed that the market size of China's warehousing member supermarket industry in 2022 reached 33.50 billion yuan, a year-on-year increase of 10.1%, and is expected to reach 38.78 billion yuan in 2024. Consumers have a strong demand for all categories, high-quality, cost-effective goods and high-quality service experience, compared with traditional supermarkets, warehousing member supermarkets can provide members with high-quality and low-cost products and complete offline service experience, with outstanding advantages. The integration of online and offline shopping scenarios will provide consumers with a variety of choices, which will meet the needs of consumers for high-frequency food and daily necessities, and further cover the people outside the service radius of the store.
In the future, in the city, the location of membership-based supermarkets will be developed in small quantities in the city center. Due to the addition of enterprises that originally mainly operated the retail format of hypermarkets in the membership-based supermarket track, more hypermarkets close to the city center may be integrated into the format elements of membership-based enterprises.
The supermarket industry research report aims to start from the strategy of national economic and industrial development, analyze the future policy trend of supermarkets and the development trend of the regulatory system, tap the market potential of the supermarket industry, and provide a vivid description of market changes from multiple perspectives such as industrial scale, industrial structure, regional structure, market competition, and industrial profitability based on in-depth research on key market segments, and clear development direction.
If you want to know more about the market data of the supermarket industry and the future investment prospects of the industry, you can click to view the research report of the China Research Institute of Puhua Industry
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