There is a god-like supermarket: the company thinks not of making more money every day, but of making as little money as possible. The most complaints received is the queue too long, the boss should often come out to apologize. Return goods never ask why, eat, pass through, used things a word, return!
The supermarket, called Costco, is finally about to open in China. Costco officials have confirmed that China's first mainland store is about to land in Shanghai, and its flagship Tianmao store will open one step ahead.
At present, its Tianmao flagship store has opened. Once the news came out, Wal-Mart could not sit down, Carrefour could not sit down, run the hair, China Resources every family can not sit down! This is not a wolf, but a gluttonous snake!
Lei Jun: I admire Wal-Mart
But the enterprise that really shocked me was costco.
"that was three or four years ago, when I went on a business trip with a group of executives to the United States, and as soon as they got off the plane, they went to costco, and they came back to show me the results of the purchase. I asked cheetah CEO Fu Sheng what he bought? He said he bought two large boxes of things. Samsonite's oversized box plus a large box, he said, how much does it cost in Beijing? It's about 9000 yuan. Does anyone know how much costco costs? 900 yuan, equivalent to $150.
Anyway, after listening to it, I really stopped at once. Then I went shopping for 10 minutes, and I bragged to Shen Nanpeng that I definitely understood, and then I turned to study what kind of company costco was.
Costco makes only 1% to 14% of any commodity, and if the gross profit margin of any commodity exceeds 14%, it needs special approval from CEO, and they say that no commodity has had a gross profit margin of more than 14% from its inception to this day. This is very different from what the entrepreneurs here think, and probably not as many of your friends in the investment community think. The company controls the gross margin, and it has a combined gross margin of 6.5 percent. "
In 1983, the first Costco opened in the United States. In more than 30 years, leaps and bounds to become the world's second-largest retailer, catching up with Wal-Mart.
How strange is this supermarket?
Behind the success is the Costco 10 strange attributes!
Strange one: thinking about how to make less money every day
Bosses all over the world are pursuing gross profit, and only Costco thinks all day: how to make less money! Will the gross margin be 10% this year and 9.5% next year? The next year 9% is even better! the Costco's gross profit margin is unthinkable-on average less than 10%, and if it's above 14%, it's going to be approved by the CEO.
What is this concept, such as a T-shirt 10 yuan to buy goods, it only sells 11 yuan, 11 yuan! Is there anything better than this? Let's compare Walmart. Walmart's gross margin is typically 40% and 60%, which means the $10 T-shirt is sold at Walmart for about $30! This is a huge profit, okay?!
Costco has a motionless signature package: hot dog soda. This package is very cheap, it has been $1.50 for more than 30 years, and it has sold billions of copies. In fact, domestic millet is the ultimate cost-effective is here in Costco steal!
Wonder2: anytime, anywhere, at any time, return goods at any time, anywhere, at any time.
Most supermarkets or stores return goods within 7 days. If more than 7 days, sorry, you have timed out, do not return! But in the Costco, return never ask why, no time, as long as you are not satisfied, can be returned at any time! Even eat half of the biscuits, through the clothes, used electrical appliances, not even a word, back!
For Costco, returns are not bad. On the contrary, it believes that the return of goods is conducive to the improvement of product quality. Because of the return of too many suppliers will definitely feel pressure, in the future will pay more attention to quality.
Weird 3: best-selling things to hide
Ordinary supermarkets usually put the best-selling items in the most prominent position, and so do we go into the bookstore. Best-selling books are always at the top of the list. But this bizarre Costco often hides the hot-selling items and sells them in the most obscure corners.
For example, its own brand KS nuts have set a 3-day sales record of 3 tons, very hot. But Costco put it in the corner of the non-food area and had to turn around to find it.
Because many of its products, especially's own brand of hot goods, despite large capacity, but more sales, inadvertently sold out. So it has to cover up and sell, thin water.
Weird 4: membership card can be used as an ID card
What if you board the plane and forget to bring your ID card? Costco tells you: it's all right!
Costco, which prints the member's photo and name on its membership card, works with the North American government department to get permission from TSA-compliant passengers to provide documents other than passports to prove their identity.
So its membership card, whether Canadian Border Administration or U.S. Customs, can be used as an ID card.
Strange five: weeping for fear that customers will not take advantage of
We go to the ordinary supermarket, often see the taste of the small sample is too shabby! Small cups, small pieces, not enough stitches! But Costco rules that the amount of food to be tried here should be large enough not to be eaten by guests. As long as there is a trial, the sales of goods can increase 2 to 3 times that day.
A lot of foodie take a little bit here, a little bit there, basically a meal solved! It turns out that there are really free lunches in the world!
Strange 6: the supermarket is not even big and all-round
Costco's active SKU is just 3, 800, equivalent to 1/10 of Wal-Mart's. This means that there are only 2, 3 options for each item in its home, and only items with "fashion" attributes are allowed to go on shelves.
For example, its microwave oven will only be low, medium, high-end three products, toothpaste is only a few brands. The advantage of this approach is that individual stock is so large that it is natural to get more bargaining space from suppliers. In fact, Costco gets much lower prices than other wholesalers, giving consumers lower prices and saving on their choice costs.
Strange 7: free medical treatment, robbing hospitals of their jobs
Costco members can be found in its medical center, Costco's Hearing Aid.
Centers does a free check, free of charge for any cleaning or follow-up appointment. Now, of course, Costco's medical system is well-established, and if customers' health insurance does not include all drugs, they can buy them there at a price well below the market price.
8: laying off home appliance fitters
Costco has a motto: go your own way, let others have nowhere to go! Many people like to buy home appliances in Costco, but they will not be installed or do not know exactly how to use, how to do?
This is usually a call to an electronics company, but it is another matter whether the other party is willing to come or not. For example, the brand officer's colleagues recently bought a few big appliances in an East, the phone rushed a few times, wait a week or no one to install. But in the end, I can only choose to return the goods, too uneasy!
But Costco can provide free technical support, help customers solve all the problems, let the electrical company decoration employees have nothing to do!
Weird 9: not only keep you, but also the keep car.
Costco has a wide range of businesses, such as gas stations, members cheaply refueling. It also sells cars, which sold four hundred and sixty five thousand cars last year, making it the second-largest car dealer in the United States.
For this reason, Costco promises to change tires here so that customers can enjoy free air and tire correction services for life. It's not so convenient elsewhere!
Grotesque 10: salesmen's satisfaction is almost the same as that of Google (GOOG).
In the U. S. employee satisfaction survey, the second highest is not Apple, not Facebook, not Intel. That's right! It's-Costco, is second only to Google. It's hard to fight for employee satisfaction at retail companies, and Costco offers more employees than many of Silicon Valley's top companies.
A cashier in Costco earns $20.89 an hour, almost twice as much as Wal-Mart and three times as much as an average supermarket employee. And 88% of its employees are covered by the company's health insurance.
Costco's employee turnover rate is only 5%, preferential treatment of employees, that is, preferential treatment of customers, so that employees have higher enthusiasm and happiness, reduce staff drain, but also improve the public image of the company. This kind of image is to spend money to do advertisement can't buy!
Like Haidilao, employees earn a lot of money, and the service is naturally lauded by customers, except for last month's Mouse Gate incident. Costco employees were praised by Obama for their best service.
How can it make money if it sells so cheaply?
How can Costco make money after writing so long, selling things so cheaply and offering so many services that far exceed expectations? After talking about its top 10 "exotic" services, then let's talk about Costco, the "heart machine boy" of the money-making model!
In fact, with so many services, Costco has only one purpose-drainage, bringing passer-by A, B, C to the membership system.
To become a member, you have to pay a membership fee. Costco's membership is divided into two tranches: $60 / year and $120 / year.
Don't underestimate this membership fee of dozens to a hundred dollars. It has more than 80 million members all over the world. And it's still paid once a year!
In the past quarter, Costco reported turnover of $28.2 billion and company-wide net profit of $ nine hundred and sixty seven million nine hundred and ninety nine thousand nine hundred and ninety nine, including membership fee revenue of $644 million, contributing 67 percent.
Because of Costco's freak service, its membership renewal rate is surprisingly high-a staggering 90%! In other words, out of an average of 10 members, 9 will be renewed the following year!
The rise of, electronic commerce in the United States has also made entity businesses cry, Wal-Mart, Macy's and other brands are in a rush to close stores. Costco, however, has managed to withstand the retail downturn with its unique membership-based, low-margin model, which we cited above.
In this way, it turned American offline shopping into a belief. Maybe Rebus is right: "when you get into Costco, you don't have to pick it, you don't have to look at the price, just close your eyes and buy it. It's a belief."
Leibbs added: "when I was a millet, what I really learned was these companies: Tongren, Haidiao, Walmart and Costco." Make products like Tongren Hall, real and faith; serve users at the bottom of the sea and make a reputation beyond expectations; learn efficiency from companies such as Walmart and Costco. The experience Costco gave me is that low gross profit is king. Only if you have a low gross profit margin can you be forced to improve your operational efficiency. "
High threshold membership system, will it be disagreeable?
Membership-based wholesale supermarkets are known to have to pay high dues to buy preferential items, while Costco is almost the highest in the competition, but consumers don't have to spend a dime on Tianmao. For example, the latest adjusted breakdown of Costco contributions as at 1 June 2017:
The annual fee for the base member is $60, or 385 yuan, while the executive member who owns up to 2 percent of his annual consumption for a rebate of up to $750 is $120 a year (about 790 yuan).
In other words, in order to buy a real bargain in Costco, you must rely on membership cards and based on high-volume consumption can be achieved.
If the entity follows the Tianmao model by lowering the threshold, or even the zero threshold, it is clear that the Costco will lose direct profits, which is clearly something the listed company and consumers in the rest of the world do not want to see. But it is believed to be one of Costco's biggest headaches at the expense of price advantage at the expense of high-button points and a lack of word-of-mouth advantage on the electronic commerce platform and traditional shopping malls.
In fact, there is a huge market difference between China and the United States. It remains to be seen whether the North American experience will be used to rush for gold in China. Retail cases like Costco should also be judged rationally, but not copied or touted for no reason.
What is the problem with Costco entering China?
It is understood that in the vast majority of China's mainland, large-scale commercial super sites are located in the downtown area, with residential buildings within 3 to 5 km, and convenience stores and community stores within the last 1 km to complete coverage. The boundary between downtown commercial district and residential district is very vague, so the high-frequency consumption of traditional commercial super-store and convenience store in Chinese city is guaranteed under the advantage of high density of people flow and close location.
Low-frequency, bulk procurement is not a problem for most middle-class consumers in China. The biggest problem is the huge footprint of household storage space as a result of bulk procurement-the apartment buildings of two to four members of Chinese families do not fit the family storage space available in independent villas like North American residential areas. Even the fresh refrigerated space in China's home kitchen refrigerators does not match the packaging of products sold by Costco.
When the pattern of low frequency and bulk purchase can not be maintained in China, the consumption pattern can only change to medium-high frequency, middle-low order consumption pattern. So what's the problem with this form?
The high frequency of domestic users, a small number of consumption habits have been developed by the electronic commerce platform, coupled with the disadvantage of the location brought traffic and time cost problems, Costco in the high-frequency consumption of this road is very difficult to get through. If Costco, a warehouse-type wholesale supermarket, fails to deliver large quantities of goods periodically, it will bring very high costs to its goods turnover, especially the loss of raw and chilled foods.
What resistance will Costco encounter if it starts to localize its buying strategy?
time cost （按时间计算的费用成本）
Because of the lateness of entering China, it takes a great deal of manpower and material resources and time to find a partner supplier, at the same time, it is necessary to ensure that its product quality reaches the entry standard of Costco and control it below the level of industry entity retail, and even electronic commerce retail price level. The difficulty is not small.
Wal-Mart's strike
Wal-Mart has been in China for more than 21 years and has a wealth of supplier resources, as well as being a shareholder in Jingdong. At the moment, China's mainland can have a large number of self-buying capacity of electronic commerce and entity companies, are in the same camp. Although Alibaba has the full potential, and as a partner with Costco, retail products can theoretically help. But at least the combination of Wal-Mart and Jingdong will put a lot of pressure on Costco.
More enemies.
If Costco is successfully transformed into local operations, as the number of middle-class consumers in China soars, large and medium-sized foreign investment, joint ventures and local commercial super will face the biggest challenge. Tencent, Ali's electronic commerce platform will also inevitably join in an unprecedented commercial super war.
What kind of chemical reactions will occur in China in the member-based supermarkets that are popular in the United States?