As the first foreign retail enterprise to enter China and implement the paid membership system, Sam has spent more than 20 years educating the market, constantly explaining to China consumers what the paid membership system is and what differentiated goods and services can be provided by purchasing members.
After years of loneliness, finally, this market is lively. In the past month, many companies such as Yonghui, Carrefour, Hualian and Defoe entered the market. Prior to this, Costco opened its first store on 20 19. Last year, a box horse was opened in the X member store, and Metro resumed its membership system. To this end, Metro has also poached many senior executives from Sam, which shows its determination to revive the membership system.
The hot market is undoubtedly good for Sam, which means that more participants will join the education market and make it bigger. But on the one hand, Sam also needs to answer, where is Sam's barrier in the face of competition?
"From a technical point of view, members pay, so your products must be great and powerful, which requires professional buyers. Only professional buyers are not enough. You have to have scale support behind you, because without scale, it is difficult to gain a cost advantage. "
A few days ago, in an interview with 36Kr-Future Consumption, Zhang Qing, chief purchasing officer of Sam member store in China, answered our questions about the threshold of membership mode.
At the same time, in her view, compared with the technical level, the bigger threshold lies in the mind, because membership is super-commercial and often anti-commercial logic.
First of all, the value of members needs to be effectively guaranteed, which determines that there should not be too many SKUs. Intuitively speaking, streamlining SKU can make member stores do more on a single SKU, thus enhancing the premium ability to the upstream and benefiting members.
But it also means that member stores can only serve some customers. Therefore, if you want to be a member, you can't think about covering more people, categories or models, but only focus on a vertical field, which is different from the membership model that many people imagine.
"So we said, this lonely road, can you stand the loneliness as a pioneer, you must first find a way to make yourself excellent, and then you can become bigger. But now a lot of business logic on the market is the other way around. Think that you must become bigger before you can become excellent. We must first have scale and then talk about value. " Zhang Qing said to 36Kr-future consumption.
Sam defines this "narrow" model as a vertical economy, that is, middle-class families in first-and second-tier cities only serve a group of members, who pursue people with a more "pleasant" quality of life. According to internal research in Sam, there are about 70 million middle-class families in first-and second-tier cities.
People familiar with member stores should know that, unlike traditional supermarkets, Sam adopts the mode of "buying tickets for admission", that is, only members can shop in the store. Moreover, Sam no longer takes the mode of traditional retailers earning the difference, but takes the annual membership fee as the core income source.
Although the annual membership fee accounts for a small proportion of revenue, it contributes most of the operating profit. Differentiated goods and services and competitive prices allow users to choose to pay to become members, which makes Vanke's users more sticky than other traditional businesses.
This means that the card renewal rate is an indicator that Sam values, and the card renewal rate refers to whether there are products that customers want to apply for or renew their cards continuously.
There is a saying in Sam: "If the success rate of your new product is too high, it means that you dare not take risks and cultivate a' hero single product' that won't make members linger."
So Sam's second anti-logic is to endure failure. "In many business models, everyone attaches great importance to success. Can the product be successful? Not low sales, not low profits. But here, we appreciate failure. Because we know that every time we breed a' hero item', we need failed items to pave the way. " Zhang Qing said.
The so-called "hero single product" is a product with high member penetration rate and repurchase rate. For example, when choosing products, many businesses will choose products with high sales volume and high gross profit. However, the thinking of the purchasing team in Sam is that members will not calculate the gross profit when purchasing a product, and will not care whether it is popular or not, but only whether it is what I want to buy. Therefore, Sam will give priority to products with high repurchase rate in regular resumption of trading.
In Sam, product selection includes big exam, middle school entrance exam and quiz, which correspond to product selection and new strategy formulation every year, month and week respectively. The big exam determines the category strategy, that is, the category direction, and what products to make this year; The senior high school entrance examination is a monthly examination, so choose the products that are most suitable for members in the current season; Quiz is a weekly re-examination of goods.
Recently, Sam launched the Jia Yun business, providing online purchases covering outdoor sports equipment and supplies, jewelry, pet supplies, home, musical instruments, large children's toys and other categories. Off-line, Sam has also set up an area to display personal goods. As we all know, the SKU in Sam is very streamlined, and the offline space is limited. Jiayun Business can help Sam expand its shelves and expand the categories that Sam can't touch online.
However, unlike many offline stores' online business, the products currently sold in Jia Yun are low-frequency and high-value, such as Steinway piano with a price of 40,999 yuan, a relatively small number of pulp boards and camping tents.
These categories are selected from Sam's annual category review mechanism. Every year, Sam will study the development of the whole market, the consumption level of consumers in China, and also look at the situation of the whole international market.
For example, making outdoor products is because Sam found that some outdoor sports, which are very popular abroad, are slowly moving from small crowds to larger groups in China, and this group is just in line with the members in Sam.
There is also a saying in Sam that "we won't do what people all over the street are doing". In Sam, if a product has many homogeneous products in the market, it will be removed from the shelf, because in Sam's view, it can no longer provide differentiated membership value for its members.
This is Sam's third anti-logic, knowing how to give up. "What we have to do is what others don't want to do, dare not do, don't want to do, and can't do." Zhang Qingru said.
Take the goods sold by Jia Yun as an example. Most shops will not do or dare to do such low-frequency and high-value goods. Sam dares to do it because the members of Sam are very compatible with the corresponding groups of these commodities, that is, those middle-class families who pursue a "pleasant" quality of life.
These goods need to spend a lot of money to find its consumers, and Sam members also need a lot of money to find suitable goods, so there is a business of Yunjia. In these categories, Sam still gives full play to its direct cooperation with brands, omitting the purchasing advantages of intermediate links. For example, a Steinway piano costs 40,999 yuan, which is nearly 8,000 yuan cheaper than the market price.
This logic is also used in the choice of own brand.
Differentiated goods have always been the core of retail competition. In Sam, there are currently more than 700 kinds of member logo products (the overall SKU is 4,000), which is a core competitiveness of Sam.
Anyone familiar with Sam member stores will know that the price of Member'sMark is often much lower than other products with similar quality, which has become the reason why many consumers choose to become members of Sam.
With Wal-Mart's huge global purchasing volume, Sam has a strong control over the upstream, which enables Sam to directly connect with brands in the procurement of standard products, reducing costs and intermediate links. At the same time, the huge shipment volume can also support Sam to jointly develop its own brand products in the upstream, which is more advantageous in price and can better control the quality.
However, unlike many retailers who try to make their own brands as much as possible, Sam also has its own trade-offs, from roll paper to plastic wrap.
"Where independent brands want to enter, or there is no clear industry standard, we can define the standard; Or there are many intermediate links in this industry. We can save intermediate links for members and help them avoid paying money they shouldn't. When we find that we can't do well, we will definitely retreat, let the suppliers do it, and let people who are more capable than me do it. "
For example, in agricultural products (mushrooms, fungus, etc.). ), there are many self-owned products in Sam, because Sam sees the uneven quality of these products outside, and consumers often have to go home to know the pros and cons. Therefore, in these categories where standards can be defined, Sam manufactures free-brand goods.
However, some products, such as skin care products, will have stronger brands in terms of R&D capabilities, and most consumers also have their favorite brands, so Sam will not make its own products in these fields.
"We need to see what our value in this industry is and whether we can provide value to our members. This is two levels, one is whether there is space and the other is whether I have the ability to do it. " Zhang Qing said.