100 Quick Reviews
Between selling goods and selling cards, Costco chose to sell goods in the short term.Author: Boya Editor: Hexiang.
Producer: Retail-Finance ID: Retail-Finance
The half-year-long "bidding" war between Hema and Sam did not reach Costco on the surface, but to some extent aroused the latter's desire to survive to broaden the service radiusCostco may launch a delivery service in Shanghai
Citing the "Oriental Finance and Economics" news on January 8, some consumers said that they had received it recentlyCostco's questionnaire on delivery fees was whether they could accept a delivery fee of 15 yuan.
*When I asked about two Costco stores in Shanghai, the staff said thatCostco may be able to activate the delivery service"It may not be delivered until the end of the year, and we are still in preparation." Whether it will be delivered the same day or the next day is still uncertain. As for the issue of delivery fees, the other party said that they have sent text messages to do a questionnaire survey to see how much everyone accepts, whether there will be a specific charge, and the charging standard of the delivery fee, which has not yet been determined.
Source: Little Red Book.
The author used "costco delivery" as a keyword to search on social platforms such as Xiaohongshu and found that many costco errands and ** businesses are currently active in Shanghai. Although some consumers are looking forward to the opening of delivery services by Shanghai Costco, at the same timePractical considerations such as "online is more expensive than offline, and you can't pick it yet" are also one of the reasons for its resistance.
Previously, Costco's e-commerce business in Suzhou, Wuxi, Nantong, Ningbo, and Hangzhou was operated by third-party service providers. Pick and choose shopping mainly provides two services: instant delivery to home (same city) and express delivery to home (two-day delivery, Jingdong delivery). In the middle of 2023, Costco will also have the news of "testing the water through the cooperation of third-party service providers to deliver e-commerce business at home", but the cities covered by the business do not include Shanghai.
Costco's choice to open a delivery service in Shanghai does not mean that its online business has accumulated sufficient operational experience in other parts of the Yangtze River Delta, on the contraryFrom the perspective of business motivation, timing and cost accounting, it is more like a step that has to be taken in response to fierce market competition
The phenomenon of "popularity" when opening has been staged more than once in Costco's mainland stores. The strength of Costco's brick-and-mortar stores is undeniable, but the online business has been tepid.
Premium delivery, this point is not as beautiful as Sam's doing" "This thing is officially authorized**" There are few things and slow speed, and express delivery is more difficult" Weibo, Xiaohongshu and other social platforms have no shortage of complaints about Costco's "pick and choose shopping" service.
Source: Little Red Book.
The author learned from the customer service of "Pick and Pick Shopping" that at present, the instant service is only within 10 kilometers of the Suzhou store, and the 10kg shipping fee is free for 199 yuan, and refrigerated and frozen goods only support instant delivery. Express delivery is 299 yuan free 10kg freight, Wuxi, Nantong, Ningbo, Hangzhou only support Jingdong express delivery, goods are picked and packaged by Costco Suzhou store, normal T+2 days to arrive.
Source: "Pick and Choose" applet.
Compared with its competitors, it can be said that Costco's online business is still in its infancy, and its choice to cooperate with multiple parties rather than self-operated reflects the company's own strategic swing. For the opening of the Shanghai delivery service, whether it is the online time, or the delivery form, or the charging standard, Costco obviously did not think about what to do.
As for Costco's business motivation for opening a delivery service in Shanghai, it is nothing more than the following:
First, increase online touchpoints, increase the frequency of "home-to-home" shopping for members, and ensure the renewal rate of users in Shanghai's main position; Second, broaden the service radius, regain the market share that originally belonged to itself from the first and errand runners, and focus on a "sesame watermelon"; Third, to meet the market call and make up for the shortcomings of online business, with the increase in the number of Costco stores, the hunger marketing of Internet celebrity hits is no longer so effective, from focusing on scarcity to emphasizing universality, Costco is trying to establish an omni-channel mentality to stabilize its market position.
Costco's move to deploy its Shanghai delivery business coincided with the opening of Sam's Club's nationwide delivery service, and Hema vigorously implemented discounting and de-membership reforms, while charging an additional 1 yuan packaging fee for online orders.
The practical consideration of Hema comprehensive discounting and the abandonment of "membership first" is that it is urgent to find a balance between business models in the new economic situation. In this test of membership model and loyalty, the early departure of the "seed player" undoubtedly tilted the balance of the originally swinging "renewal" in favor of Costco and Sam.
As for the measure to add 1 yuan to online orders, even if Hema explained that it was a paid provision of plastic bags according to the "plastic restriction order", the survival pressure reflected behind this should not be underestimated.
In the blink of an eye, in the ring of the warehouse membership store, Costco and Sam still have a brilliant record. It's just that in terms of Costco's online business, which has been lacking, Sam's has more advantages in being a pioneer and localizing because of its backing on Walmart.
Retail Business Finance has learned that up to now, Sam's has laid out 47 stores in 25 cities across the country, and the stores can provide a variety of distribution services such as fast delivery, city-wide distribution and nationwide distribution. According to Zhang Qing, Chief Procurement Officer of Sam's Club, the number of Sam's Club memberships has grown almost fissionally in recent years, and the membership renewal rate and activity have also continued to rise.
In the past year, Sam's has invested nearly 1 billion yuan to achieve a long-term ** reduction in dozens of members' frequently purchased products, while Costco is more focused on store expansion, with 3 of the existing 5 stores (Shanghai Pudong store, Ningbo store, Hangzhou store) all open in 2023, and the first store in South China will be opened in Shenzhen on January 12, 2024.
Source: official website of the company.
It is not difficult to see from Costco's recent performance data that, like Apple, the consumer market from China contributes most of the company's revenue and profits, and Costco has always regarded China as an important strategic market.
In 2024, we will also open a membership store in Nanjing, where we will be the first to try the gas station business, and in the future, we will expand our business footprint to more parts of China. Zhang Shuyun, general manager of Costco Chinese mainland, said.
In the face of Sam's omni-channel advantage and the most powerful offensive,Costco has focused on store expansion and business expansion。As for the Shanghai distribution business,The timing of the layout is not early, and the strategic determination is not firm enoughIt is debatable whether "making up for shortcomings" can be called a favorable business supplement.
The underlying reason why Hema insists on "different prices online and offline" is that the cost of online distribution is high, while the cost of offline is low. The high cost of online fulfillment is in line with the law of retail, and similarly, in the eyes of industry insiders, "member to store" is the core logic of membership stores.
Therefore, Costco's move to open a delivery service in Shanghai is likely to be understood as "choosing to sell goods between selling goods and selling cards", which can get good sales data in the short term, but it is very likely to shake the foundation of the membership system.
Source: Internet.
On the one hand, if Costco chooses to sell goods, does the threshold of "membership fee" be supported by the commodity power, low ** and service power? If you choose to sell cards, will online shopping and consumption data pose a challenge to the membership system itself?
On the other hand, the "small business" with errands is actually the epitome of Costco's prosperous ecology, Costco's delivery service in Shanghai may be able to add a lot of new members who focus on online shopping, but it will also make many old members who prefer offline feel uncomfortable, and even do not renew based on the familiarity of the product, and choose to find another way to "borrow a card".
Source: Little Red Book.
Mr. Wang, who has also applied for membership cards for Costco, Sam's, and Hema X membership stores, said bluntly: "I will never get a membership card in the future." Membership cards seem to be handled by individuals, but once online purchases are opened, there will be many loopholes to be drilled, such as a membership card serving n addresses, you can get together 50 and I make up 50 in the family community, and everyone can get together 250 to spell a card. ”
Source: Little Red Book.
As a "gathering place" for high-net-worth clients in the Yangtze River Delta region, when they begin to spend their days on membership fees, the Costco that once made consumers queue up in the early hours of the morning and caused traffic congestion due to excessive passenger flow will no longer exist.