When the middle class is cautious in consumption, retail brands focusing on "high-net-worth individuals" represented by Sam's and Hema have also begun to lower their prices and attract more high-frequency consumption behaviors with discounted or cheap traffic goods, and this "self-destructive behavior" has caused a funny and ironic drama to a certain extent.
In "The Fourth Age of Consumption", Miura Zhan takes Japan as an example and proposes four different types of consumption "consciousness", and this cognitive consciousness determines the consumption trend of the whole society. First, the consumer society, in which only the middle class and above enjoy consumption and become the main force of consumption, is typically represented by the wealthy and privileged classes in the feudal or material scarcity era; Second, the consumer society takes family needs as the core and consumption behaviors are similar, such as the consumption demand for food and clothing of most Chinese families from the end of the last century to the beginning of this century; Third, the consumer society takes the individual as the consumption unit, pursues individuality, and shows its own personality positioning and identity symbol through the consumption of goods. Fourth, consumption, in order to pursue more practicality and simplicity, no longer pay attention to the symbolic meaning of consumption.
As for the current consumption willingness and trend, most middle-class people seem to have entered the fourth consumption. Recently, the middle-class who "gather wool" in Sam's Club and enjoy the "poor ghost**" may not be because they are poor, but more rational, and they don't care about proving themselves through high consumption, but happily accept the two-minute cheap happiness they get from taking advantage of it.
1.59kg is priced at 219 yuan eggs, 7 pieces of 23The price of 9 yuan of original bagel and 16 pieces is 59The $8 Swiss roll is nicknamed the "poor three-piece set" in Sam's Club. On social platforms, a variety of Sam's "poor ghost" strategies are also emerging, with more than 30,000 notes related to the Xiaohongshu platform alone.
In addition to the poor ghosts**, tasting "is also one of the ways to get Sam's wool." On social platforms, enter "Sam's tasting strategy", there will be quite a lot of effective "appearances", some people shared: too early or too late may not meet the peak period of tasting, the aunt who tries the food usually gets off work at nine o'clock in the evening, so between eight and half past eight in the evening, there will be more stalls for tasting. Tasting items include steak, fried chicken, rice dumplings, fish maw soup, Swiss rolls and more. The overall feeling is that "Sam is still very generous, after all, he has collected so many membership fees".
For Sam, whether it is a poor ghost ** or a wool party, it is not his strategic business action or active marketing topic, but just a spontaneous banter from netizens. Since last year, Sam has been under attack, and further low-price and cost-effective strategies have become an important competitive orientation.
In July last year, Zhu Xiaojing, president and CEO of Walmart China, said in an internal meeting that Hema was Sam's Club's only competitor in China. One of the people familiar with the matter explained that the only thing to do is not only this one competitor, but that Hema is the only potential to pose a competitive threat to Sam's Club with its innovative way of doing business.
On October 1, 2020, Hema opened its first X membership store in Shanghai, and there are currently nearly 3 million people paying an annual fee of at least 258 yuan. In August last year, Hema X members launched the "Moving Mountain Price", which directly pointed at Sam's, not only adjusted the ** of similar products to 1 yuan lower than Sam's price, but also made a free bus at Sam's door to pick up customers to Hema to fight, and the war burned directly to Sam's doorstep, and in October, Hema directly lowered the ** of more than 5,000 offline products by 20%.
Shortly after the Spring Festival holiday, Hema APP announced that it will be piloted in Beijing, Nanjing and Changsha: commodity price reductions and adjustment of free shipping thresholds, and the lowering of ** commodities covers seafood and aquatic products, meat, poultry eggs, vegetables and fruits, baking, snack foods, wine and other categories.
Hema officially said that discount management is not a discount store model, not to sell cheap goods, but to sell good goods and top goods at parity. In terms of goods, we will reduce the variety and strive for excellence to provide consumers with high-quality and affordable goods. Hou Yi shouted at the same time, "The model has been passed, and it is not a dream to open 10,000 Hema outlets in more than 2,800 county-level cities and about 290 prefecture-level cities in China, but it will definitely come true."
In the face of Hema aggressiveness, Zhang Qing, chief purchasing officer of the Mu member store, said in a group interview, "I am not inclined to use ** as a main means, more of a long-term feedback, once the adjustment **, it is a long-term price reduction." "Having said that, in the past 12 months, Sam's has invested nearly 1 billion yuan in the cost of reinvesting in commodities, so that dozens of products purchased by members on a daily basis have achieved long-term ** reductions.
In 1996, Sam's Club opened its first store in Shenzhen. As of December 2022, Sam's Club has 44 stores and 5 million members in 25 cities in China, with an annual membership fee income of more than 1 billion yuan and a revenue of about 66 billion yuan. Sam's annual income from membership fees has reached 1 billion, and he has become an excellent student who "stands alone" under the background of today's online and offline retail enterprises' general difficulties in surviving. And such a "solitary body" naturally becomes a "target" for the group to attack.
In addition to Freshippo, a large number of domestic retail companies have also begun to set foot in membership stores, and Sam's old rival Costco is in hot pursuit.
On January 12 this year, RT-Mart's third M Club opened in Nanjing. On the same day, Costco opened its first store in the Greater Bay Area in Shenzhen.
Also as a membership store retail brand from the United States, Costco has a different model from Sam's. Costco even does not hesitate to further reduce operating costs through the self-built integration of the long ** chain. For example, Costco almost always takes its own land, builds and operates its own stores, and reduces fixed costs in a longer period of time. Such an asset-heavy model, although it reduces the speed of store opening, is more advantageous in the later operation. For example, for online delivery, Sam's can provide instant purchase, while Costco has only provided next-day delivery so far, and hopes that consumers will shop in store to save delivery costs.
Some analysis articles believe that Sam's core competitiveness in products is 4,000 advantageous commodities accumulated and selected for more than 20 years, which have formed a strong scale advantage and first-chain advantage in the Sam's system. But Costco's merchandise library is expanding.
The newly opened Costco in Shenzhen has a large number of department stores and even luxury goods. According to **, within 16 minutes of opening the door, Hermes handbags were sold out. In Costco, people can buy everything from home appliances and cars to jewelry, luxury watches, bags and other products.
In this way, Costco is becoming more and more like a department store, and Sam's is becoming more and more like a budget store.
Since the "membership fee" has been paid, for the psychological experience of consumers, member supermarkets must provide full absolute differentiation advantages from non-member ordinary supermarkets in terms of goods and **.
In order to build such a "differentiated advantage", there are often two killer tricks for member stores: the first is to build a huge unique product system. Most of these exclusive products are private label brands of member stores; The second trick is to reduce the procurement cost of non-self-owned goods through strong first-chain integration capabilities and large-scale bargaining power.
These two strategies, based on a foothold, must have a large-scale "sales volume", that is, the exposure to the final consumption conversion in the store must be large enough. This further leads to the fact that member stores must induce consumers to "buy in large quantities".
In the base camp of Europe and the United States, Sam's warehouse store model is dominated by large packaging and selected SKUs, but in the Chinese market, especially in first- and second-tier cities, buyers are mainly small families of less than four people, data from the seventh national census show that there are 4There are 900 million households, with an average population of 2 per household62 people.
Therefore, Sam's large-format packaging is very inappropriate for the vast majority of small families, even those who live alone. No matter how cheap the large package is, it is a waste for consumers to eat and use it, and it is not cost-effective in comprehensive calculation.
However, the products launched by local supermarkets such as Hema and Yonghui Supermarket are mainly in small packages, and the concepts of "buy as much as you need" and "don't stock up" are more in line with the current family demographic structure and the demands of the younger generation. On the other hand, small packages of goods mean lower unit prices, and consumers will not have "pressure to consume" from the senses.
As the middle-class population tends to be conservative in their willingness to consume, reduce their daily consumption, and downgrade the quality of consumption, this is undoubtedly a fatal blow to member stores. Although a considerable amount of membership fees can be collected, if the membership fee income is not enough to make up for the various tasks and preferential concessions made to members, the annual consumption scale of members will be reduced, and the large-scale cost advantage of the membership model will be reduced, and if the cost is not well controlled, the internal closed loop of the membership retail model will become precarious.
Hema may have been aware of this inherent contradiction.
Hema currently has close to 3 million members, but Hema Fresh and Hema x Membership Store share these members. Hema Fresh wants to provide additional discounts for paid members, receive goods for free every day, and deliver 365 times a year without threshold, so that the formation of additional costs will make the annual fee of 258 yuan seem "not cost-effective".
A person close to Hema believes that there is also a conflict between the business logic of X membership stores and fresh food stores, and Hema Fresh hopes to provide users with instant fresh food delivery in as fast as half an hour, without the need to stock up on goods and refrigerators. x member stores hope that consumers can go to the site to visit, taste food, enjoy the various services provided by the member store, and stock up on goods with large refrigerators. Under one system, the two businesses are mutually relevant.
Under such a contradiction, Hema announced that from December 13, it will not support the opening or renewal of Hema X membership for the time being, and the membership rights and interests that have not expired before can be used normally. Combined with the reduction of thousands of offline products** by Hema in the fourth quarter of last year, it is widely speculated in the industry that Hema will start a comprehensive discount or even abandon the membership system.
From the logic of Freshippo, the additional profit generated by membership fee income is not enough to exceed the wider sales revenue formed under the full liberalization model, and Hema simply "opens its mouth" to fully inclusive all non-member users. In other words, the large-scale price reduction of Hema is not only for members but for everyone, imagine that this nuclear-bomb "riot operation" of Hema is extremely lethal to Sam's member group. The benefits that can only be enjoyed by paying a membership fee of nearly 300 yuan in Sam's can be enjoyed casually in Hema, and Sam's members are very likely to "betray the group".
Regardless of the membership model or boutique discounts, China's retail market competition is becoming more and more fierce, after the successful "lying to win" model in the international market into China, with a large number of latecomers "disrupting the situation", everything has become full of gunpowder, full of unpredictability.