"Cash back?" Pierce didn't understand.
Chen Zhiwen explained: "The logic is very simple. We issue membership cards. Let's say a card costs 10 US dollars. We invite nearby consumers to become members. Then these people earn points when they spend in our supermarket. We can give back cash after one year, such as 2% The amount of consumption, that is to say, as long as the user spends 500 US dollars, the membership card is free, and if it exceeds, it can be converted into a deposit for shopping, or the supermarket can hold activities every once in a while, such as redeeming points Commonly used commodities such as gasoline, toilet paper, small electrical appliances, beverages, and spiritual stones.
In this way, when we recommend members, we can use this reason to convince consumers, because as long as they consume, they can get back the money they invested. US$500 is not much for ordinary families, and daily consumption is far more. As long as this system is in place, those who have membership cards will give priority to our supermarkets. Besides, our supermarkets themselves are of high quality and low prices. They can buy enough supplies at once and consume one or two at home. It’s been months. "
"This method is very innovative." Pierce thought about it carefully. The cashback system is indeed easy to persuade consumers to spend money to buy memberships. Before, he asked his staff to go to nearby supermarkets to copy the prices, and then sort out the list before getting it. Compare with consumers and convince them that the prices in supermarkets are very cheap and it is definitely cost-effective to apply for a membership card.
Obviously, the former is simple and easy to understand, while the latter requires a lot of time and manpower to execute, and the effect is not as good as the former.
The cashback system will also make consumers more willing to shop. After all, the price itself is cheap, and the more you buy, the more you can earn. In addition, the price of gas is now expensive, and many ordinary families in the United States have gas-hungry cars. Nowadays, there is a very small group of people who drive out for leisure activities. Most people are probably more inclined to buy enough supplies at once to save gas costs.
"However, this change is too big to be tested directly on FedMart, so I need to build another brand and start over. However, considering that it may steal Fedmart's business, I can go to other states for testing, such as in Los Angeles and San Francisco. It’s a big city like this, and because it’s our first store, I hope it’s my own property, and it needs to be large in scale, and it doesn’t matter if it’s decorated, it’s just fine.” Chen Zhiwen continued.
One disadvantage of warehouse-type supermarkets is that it is difficult to build supermarkets everywhere like Wal-Mart, because its core is a small variety of goods and a small-profit-quick-turnover route. Therefore, it is difficult to establish in small cities or even ordinary cities. Only cities with sufficient population and higher consumption power can support a large warehouse supermarket. The number of Costcos in later generations is not large, and by 2020, there are only 700+ stores in the world.
Relatively speaking, the operating methods of Costco in later generations are still too conservative, and funding problems are also the main reason. Now, although Chen Zhiwen wants to learn Costco's operating methods, he cannot be conservative. He needs to expand quickly and expand globally as soon as possible. Establish branches in core cities and enter the mainland market as quickly as possible in the next 20 years.
Of course, Costco's business model will definitely not work in the early stage of the mainland. Supermarkets such as RT-Mart and Suguo will work. Different places also need to consider different business models. Warehouse supermarkets have too high economic requirements.
Even though funds are tight now, he is still willing to spend money to build the brand first. As long as the first Costco can have many users, high sales, and a certain profit, then he can use bank funds to develop it. As long as he waits for a few more years, he will wait until If some of Chen Zhiwen's plans in Hong Kong and the United States pay off, funding for Costco's expansion will no longer be a problem.
"There are many supermarkets in a big city like Los Angeles. It is a big gamble for us to open a store here, and it is a new store." Pierce said with a smile.
"A good business model is never afraid of competitors. What we need is to gain a foothold in big cities like Los Angeles and San Francisco, so that we can quickly conquer other cities." Chen Zhiwen nodded and said, "I hope you can go there in person Since Los Angeles is responsible for this store, we must successfully build a reputation.”
The business model of warehouse supermarkets is indeed very novel in this era. After all, it is a successful business model for decades to come. No one could have imagined it in this era. But once it appears and shows certain advantages, other competitors can also copy it. , after all, there is no patent copyright on this kind of thing.
However, even in the Internet era, the old monopoly giants were very slow to respond to new companies with new models, such as Google to Facebook. By the time Google reacted, the latter had already grown in scale and could no longer overtake it. In the 1970s and 1980s, Similarly, with so many retail giants, Costco must have been large enough by the time they reacted. Because it is not large, these people will not notice it at all.
Historically, only Wal-Mart's Sam Walton valued Costco's business model very much when it was very young, and established the first Sam's Club in 1983, but it was still too late. In the field of warehouse supermarkets, At that time, Costco was already in the dust.
However, regardless of whether his intervention will change history, Chen Zhiwen needs a capable person to run it personally and sum up all successful experiences. After all, methods are methods, but how to do it best is a very professional matter. Let Chen Zhiwen To do it, it is absolutely blind, and you can only rely on Pierce and his team, who have a lifetime of experience, and the predecessor of this method was researched and explored by their team.
Therefore, Chen Zhiwen promised to give their team enough shares, so that they would be willing to work hard for the company to grow. Anyway, as long as the company is large, in an environment like the United States, a Chinese will not be allowed to control such a large group alone. , sooner or later the shares will be given to the Ministry of Finance. Of course, other large consortiums will still have to provide funds and cooperate with each other in the future, and it will be inevitable to go public by then.
What reassures Chen Zhiwen the most is Pierce's age. In ten years, he will be almost 70 years old and will not have the ambition to fight for power and profit.
"That's no problem. Fedmart will just operate normally." Pierce nodded and asked, "What's the name of the new supermarket?"
"Let's call it Costco. Cost itself means consumption, and it's easy to understand." Chen Zhiwen said.
"It's not bad, it's easy to remember," Pierce said.
Chen Zhiwen added: "Also, there is a small thing. I hope that Costco has one or several very cheap products inside, such as a roast chicken for $1 a piece, plus a large Coke?"
"One dollar?" Pierce was stunned for a moment and said: "The big cup of Coke is not the problem, it's just this roast chicken. It seems difficult to get one dollar. Mr. Chen means to use this to attract people at a loss?"
"Yes, it's similar to McDonald's roast chicken, which tastes better, or sausages. Losing money is a must. I just want to lose money to attract a large number of people. This discount is still very good, but you have to find the right taste of roast chicken and Sausage will do." Chen Zhiwen said with a smile.
In the later Costco, hundreds of millions of roasted chickens were sold a year. On average, a member purchased two roasted chickens a year. This was a very good feedback to members. Just like the supermarkets in the mainland in the previous life, many sold eggs at a low price or even at a loss. Logically speaking, any normal person would not come to the supermarket just to eat a roast chicken or buy an egg. Even if they do, they are very rare, and most people will buy other things.
"Okay, that's no problem." Pierce nodded and said.
