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- Source/Night Deep Finance
- Author/Night Deep Finance
Hema Urgently Adjusts! Announces the resumption of membership.
The new coach took office and first overturned the low-price strategy. After Hou Yi, the new CEO of Freshippo, took over, he stopped playing the discount strategy, canceled the "offline exclusive price" that had been implemented for less than six months, and returned to the membership system!
Source: Hema APP
Recently, the Hema APP issued an announcement that it intends to resume the card opening and renewal services for X Gold Member/X Diamond Member on April 24, and at the same time will upgrade and adjust the rights and interests of the original member, including increasing shopping rebates, birthday gifts, and adding "every Monday" and "every Thursday" as options for membership days. At the same time, the online single free shipping threshold for Hema stores in Beijing, Nanjing and Changsha (Hema Fresh Stores and Hema Mini Stores) will be restored to 49 yuan, and the insufficient will be charged at 6 yuan per order.
The membership system, which had been suspended for a period of time, was restarted, and the upgrade and adjustment of rights and interests and online showed Freshippo's determination to return to the membership system.
Previously, Hema had responded that the ultimate goal of de-membership was to ensure the "double-line price reduction" of Hema fresh stores, "so that everyone can buy more cost-effective goods without threshold, instead of needing a ticket".
Now, this ticket is back.
01. The change of Hema tickets: new and old customers are confused
In late December 2023, the cancellation of the membership system by Hema has already stabbed a wave of old members in the back.
As of the end of 2022, according to public data, the number of paid members of Hema is close to 3 million, and the membership fee alone can contribute 588 million yuan to the annual revenue of Hema.
At the end of last year, the sudden abolition of the membership threshold made the additional recharged members and the non-recharged customers basically equal, losing the particularity of membership rights.
Later, Hema launched the "offline exclusive price", and the exclusive price and member discount could not be used together, which made Hema members gradually meaningless, which caused a large number of members to be dissatisfied and confused.
Some netizens raised doubts: Will the quality of its products decline if the membership threshold is abolished, will the services it provides deteriorate, or will the prices of its products increase secretly? Otherwise, where should the cost of those discounts and services enjoyed by members in the past be shared?
Previously, the cancellation of the Hema membership system was to benchmark the membership supermarket giant Sam's. At the end of last year, an entry of "Hema Sam's face-to-face business war attracted onlookers" appeared on the hot search. Some Nanjing netizens posted, saying that Sam's Hema set up a stall face-to-face, and the promotional slogans on both sides were even more-for-tat, on one side is Sam's "why is it so big to bring more savings to members", and on the other hand, it is Hema's "Why is it mostly small packaging, no tickets are needed, and there is no pressure on small families".
In addition, Sam's offered generous membership card opening gifts to show member benefits, and Hema provided free tastings such as king crab legs and grilled shrimp to attract consumers. Netizens have stood in line with the more inclusive Hema, and some netizens commented: "I think whether it is a business war or something, as long as it can meet the rights and interests of consumers, it is good to have discounts." ”
The battle between "members" and "all employees" in the supermarket industry has begun.
Source: Weibo
However, less than half a year after Hema canceled the membership threshold and implemented the discount strategy, the membership system was restarted.
In February this year, Hema announced that it would pilot the "unification of online and offline prices" in the three cities of Beijing, Nanjing and Changsha, quietly warming up for the resumption of the membership system in the name of sharing low prices online and offline. This move seems to have reopened the consumption benefits of members and non-members, and members who were previously backstabbed by the "offline exclusive price" also seem to get a little comfort. However, the unification of online and offline prices will inevitably cause dissatisfaction among consumers who pursue the ultimate cost performance, although Hema responds that online prices will be on par with downward or central.
Such a change has greatly disappointed ordinary customers who have already enjoyed preferential policies, and the old members who have been backstabbed will still renew their fees because of the repeated horizontal jumping of Freshippo?
02. The discount strategy is not profitable, and Hema listens to the persuasion to return to members
Hu Chuncai, a senior retail expert, said: "Hema has been constantly trying and making mistakes, and the main consideration for canceling the membership system was to further lower the threshold and develop more customers, but after a period of implementation, it should be that the gross profit and sales volume did not meet expectations, so now the membership system has been resumed." ”
Like membership-based supermarkets such as Costco and Sam's, Hema also chose to open its first store in Shanghai in 2020. Similar to middle-class symbols such as Starbucks star cards and hotel memberships, membership-based supermarkets are also a product that quickly satisfies class imagination. Based on this, Chang Yin, the person in charge of the Hema X membership store, also believes that in a sense, the membership system has begun to become a status symbol.
At the same time, the membership system can achieve the purpose of stimulating consumption through preferential rights and interests, and has the functions of locking users without losing them, improving the repurchase rate, cultivating user consumption habits, and increasing sustainability.
However, with the downgrading of consumption, identity fantasy and real preferential options, consumers who pursue cost-effectiveness still value the latter. When Hema canceled the membership threshold, it also noticed this.
Now, Freshippo's move to restore the membership system is not to completely abandon the discount strategy, but to re-target the discount service group to the middle class and return the discount rights to members. In this battle between "members" and "all members", it is obvious that Hema still falls to "members".
What Hema needs now is to serve the existing customer base well, rather than trying to grab the entire supermarket market in a hurry, and only by stabilizing the basic market can it be possible to expand market share.
03. After stunting consumers and driving away investors, it may be difficult for Hema to return to Hema
However, the changeable style of Hema has made it appear in more than a dozen formats in the past, and it seems too swinging in terms of brand positioning. The first question faced by Hema as a reunited member is not how to regain the title of "Light of the Middle Class", but where will Hema go in the future?
Of course, the methods of warfare can be adjusted in due course, but a clear understanding of the long-term strategic positioning is required.
The previous discount strategy of Freshippo, although the performance has been initially improved, but the product quality has dropped sharply, from the previous high-price and high-quality middle-class supermarkets to netizens complained that they could not find customer service after receiving rotten fruits; overtime for two hours to urge the order button disappeared directly; there was a shortage of two catties but refused to compensate; quality control is getting worse and worse; and many brands cannot buy a low-end cheap image.
It stunned consumers, drove away investors, and made Alibaba even more anxious.
Although Hema previously refuted the rumors that Ali was going to sell it to COFCO, it can also be seen that Ali is dissatisfied with Hema's performance. Tsai Chongxin also responded to the rumors of Ali's withdrawal from physical retail at the earnings conference in February this year, mentioning: "At present, Alibaba's balance sheet still has some traditional physical retail businesses, they are not the core focus business, and Ali's withdrawal is also reasonable." But given the current market conditions, it may take time for an exit to materialize. ”
As soon as this news was released, the outside world speculated that this may be Ali's foreknowledge of the possible sale of Hema in the future.
However, the core of the retail industry is still the two dimensions: one is the cost performance of goods, and the other is the shopping experience of customers. How to find a balance between these two dimensions, it has been proved that Hema only takes into account the sinking of prices on the road of pursuing cost performance, and neglects the quality of products, and exhausts the high-quality shopping experience accumulated by previous members.
I hope that when Hema returns to Hema, please also return to its original intention.
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