When the pointer of the economic cycle shifted to a less optimistic time zone, and more cost-effective products were shouted in the live broadcast room, cross-border purchasing began to retreat, and some people said that the income shrank by 8%.
When Japan's nuclear sewage was dumped, the performance of SKII, Shiseido and other daily chemical giants seemed to be deeply affected.
The quality of the purchasing business is not only the manifestation of the economic goodness, but also a "betrayal" of the new business format to the old business format and channels.
In the past year, the supermarket industry, which has existed for 100 years, has experienced a "sad" season in the crowded retail industry. From large supermarkets to boutique supermarkets, they have announced their closure or transformation. The hypermarket Carrefour cleared its warehouse, RT-Mart frequently rumored to close its stores, and Shanghai Chengchao, known as the home of the middle class, collapsed.
However, this track is not only sad players, Henan's "Yiba" Fat Donglai, foreign leaders Costco and Sam have "welded" the flow of people under their own brand swaddling clothes, and frequently appeared on the hot search list, and even gave birth to a group of people who specialize in purchasing Costco and Sam's. Not only in China, an Asian woman living in Auckland has earned at least NZ$2.4w in the first half of 2023 by purchasing Costco.
What kind of membership system makes money
Not only on the Internet, but also in big cities and small counties, everyone who pursues "high quality and low price" and has a certain standard of living vaguely knows the existence of these two supermarkets.
Costco and Sam's run the so-called membership-based warehouse supermarket. Membership is nothing new, from Carrefour to RT-Mart, everyone is issuing membership cards, of course, the standards and rights are different.
The domestic membership model can be roughly divided into three categories: single-track membership, dual-track membership and free membership.
The single-track membership system is a model represented by Costco and Sam's, that is, you can only come to the platform to shop if you spend money to buy members.
The dual-track membership system is mostly used by the e-commerce industry, such as JD.com, although consumers can come to the platform to consume, but paid JD Plus members have more rights.
The free membership system is based on traditional supermarkets such as RT-Mart, which provides free card application, consumption to obtain points, points exchange for products or deduction services, etc.
The membership system can be traced back to the entertainment industry in the 15th century, when the feudal elites in Europe set up a variety of closed meeting places in order to distinguish themselves from the common people, the so-called membership clubs. In the retail industry, METRO is one of the earliest companies to implement the membership system.
Just as the aristocracy spends money to buy a venue fee in order to show his status, the essence of membership is the distinction between circles and privileges.
In the United States, Costco, which was originally benchmarked against the upper class and middle class, continued the connotation of the aristocratic club. Tracing the history of Costco's development, this membership-based warehouse supermarket born in the 80s of the 20th century is full of middle-class and petty bourgeois labels.
It is reported that Costco's predecessor was the Price Club established by Saul Price and Robert Price in San Diego in 1976, which is a new membership store for commercial buyers, mainly serving corporate customers.
In the process of operation, Costco found that many non-enterprise employees would also buy its products through spelling, etc., so Costco gradually began to open up to non-enterprise users.
The opening is open, but whether it is from the admission fee, the category of things and things, or the service, Costco is full of screening thinking, as well as the characteristics of differentiated treatment at the customer level. After all, if you want to get into Costco, you have to pay for it, with a regular membership fee of $60 per year and a premium membership fee of $120.
Changjiang Securities cited WCI data that Costco's user groups are more concentrated in highly educated and high-income groups. It is even said that the Costco membership card will be used as an adult gift for the children of these families.
Source: Warehouse Club Intelligence (WCI), Changjiang Securities Research Institute
That's true of Costco, and even more so of Sam. In China, Sam's ordinary members are 260 yuan/year, and excellent members are 680 yuan/year. Sam's target customers in first- and second-tier cities are at least the middle class.
36Kr quoted speculation from people in the retail industry that Sam's sales compound growth rate in the past three years will not be less than 30%, and its sales will exceed 80 billion in 2023. The average annual contribution of a single user is 14,000 yuan, which is 1.6 times that of Taobao and nearly 5 times that of Pinduoduo.
Low prices are not everything
There are thousands of membership models, and the only ones who make a lot of money are Costco and Sam's. This made Freshippo, which had once implemented a membership model, very angry. After repeated jumps, Hema announced that it plans to restart the membership system on April 24. However, it is also a membership fee, why are customers willing to stand and send money to Costco and Sam?
Costco and Sam taught traditional supermarkets a lesson. Supermarkets are not middlemen, just make a little difference in the price of goods, supermarkets can make money by providing services, the core is: Costco sells services!
Fang Er, a professor of marketing at China Europe International Business School, summed up the essence of Costco: first, retail as a service. Costco allows retail to truly return to the essence of service, providing users with product selection services, and second, serving consumers rather than brands.
If you want users to pay, either the product quality is good enough, or the price is low enough. It just so happens that Costco has a considerable advantage in this.
Behind the fawning of users is the extremely rigorous process of supplier selection. Behind the supplier's willingness to accept Costco's test is the ultimate bargaining power brought by Costco's best-selling products.
Costco only has about 4,000 SKUs, and there are only about 1-2 products in each category. Jim Sinegal, CEO of Costco, once said, "We won't have the cheapest sunglasses on the market in our store, but we will have the cheapest Ray-Ban glasses." ”
Many executives have gone to Costco in the United States to observe and study, and a great feeling is that brand products are really cheap. Cheetah CEO Fu Sheng was even more overjoyed and said that Samsonite's oversized and large suitcases were sold for more than 9,000 in Beijing and only 900 yuan at Costco.
Cheap price is not the biggest advantage, the bigger advantage is: under the premise of quality assurance, cheap price makes sense.
In a dialogue with Wang Gang, chairman of Huayuan Food, Zhixiang went to sea and explained the process of Wang Laoji's landing on the shelves of Costco in the United States.
The first step is to verify the supplier's qualifications. Costco will send a third party to inspect our warehouse, mainly to check the hygiene of the warehouse and the entire operation process, product storage, shelves, inventory, management, delivery, etc.
The second step is to inspect the factory. Costco has a third party in Beijing that inspects Chinese factories according to their standards, including factory equipment, food safety management, and social responsibility inspections.
They will send people to randomly stop workers outside the factory and ask them how many days a month they work, how long they work overtime, and whether they are paid in full for overtime work, so as to check your sense of social responsibility. Many brands can only pass after two or three rounds of factory inspections. And only after passing this level, the two sides will begin to study the specific products on the shelves.
In addition to the advantages of high quality and low price, Costco and Sam's will also co-build and develop some unique private label brands with suppliers, including some online celebrity products, for members to consume.
A Walmart insider revealed to a reporter from Southern Metropolis Daily that they have developed a small tool on enterprise WeChat that is open to all employees, and these employees will become an intelligence source for product information collection.
If you look closely, it's not hard to see that complex marketing models are not common at Costco or Sam.
Zhu Xiaojing, CEO of Walmart China, once said, "Because every promotion will increase the complexity of the business model, and the complexity of each product model will increase the cost, and the cost will eventually be passed on to members." ”
Sam's President Andrew Win once said that the "discipline" of a club store is that "we don't care much about the design of the store, the gorgeous shelves, the lighting and the complex promotion model, we care more about a stable price system." ”
epilogue
The success of Costco and Sam's lies in the accurate matching of people, and the membership model relies on the strong bargaining power of supermarkets over suppliers and the high-quality products they provide.
Now, they are also experimenting with a deeper market, and whether this style of play can be proven in a wider area of China is a major opportunity and challenge.
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