Are you looking forward to November 11 this year? Are you ready to shop till you drop on November 11? When you're gearing up for a shopping spree, shouldn't you think twice? Yes, here's a guide to avoid being ripped off. Would you like to take a look?

-01- When you gaze into the abyss, the abyss gazes back! When Alibaba's Daniel Zhang (Zhang Yong) founded the shopping festival, no one imagined that November 11 would become a carnival for Chinese consumers and a goldmine for brands. Look at these figures: According to the "China Retail Industry Market Outlook and Investment Strategy Planning Analysis Report" released by Qianzhan Industry Research Institute, at 24:00 on November 11, the total transaction volume on Tmall for the 2018 shopping festival exceeded 200 billion yuan (RMB, same below), reaching 213.5 billion yuan, a year-on-year increase of about 27%. Compared to the 0.05 billion yuan in 2009, this is a growth of over 4,200 times. During the 2018 shopping festival, total online sales across the entire network reached 314.3 billion yuan, a year-on-year increase of 23.8%.

Statistics of Tmall shopping festival transaction volume from 2009 to 2018

Wait, I'm not here to show you data; I'm here to analyze how to avoid being ripped off! What point am I trying to make with this data? Chinese consumers and mobile internet have created the commercial phenomenon of periodic e-commerce promotions. As the base grows larger, this is no longer just a matter for one or a few companies. Undeniably, this commercial phenomenon, initiated by one company and involving the entire industry, ecosystem, and supply chain, owes its success to several major e-commerce platforms. E-commerce companies can offer lower prices than offline stores because they save on rental costs, so consumers benefit and can compare prices across the entire network. Online e-commerce has successfully accounted for about 17.8% of total domestic retail sales. In 2019, it is estimated that the entire network may exceed 500 billion yuan. However, even if it reaches 500 billion yuan, it still hasn't exceeded 20%. What does this mean? It means the dividend of the traditional e-commerce model has come to an end. Consumers are all too familiar with the tricks and tactics of traditional e-commerce. Remember last year's video by Papi Jiang complaining about e-commerce promotions? She analyzed all the various tricks and pitfalls! Traditional e-commerce has become synonymous with slow shipping, order accumulation, various coupon tricks, and high markups followed by discounts. Ten years have passed, and consumers have gone from liking it to being very dissatisfied, but they feel helpless.

So what to do? Let's use the familiar formula and analyze it in plain consumer language.

—What do consumers like? Of course: high quality, low price, premium products, and fast delivery! November 11, 2019 is coming. Who understands consumers' minds best? Is it the old traditional e-commerce platforms? Of course not! It's membership stores!

-02- Shopping and consumption trends: Short-term promotion model vs. membership model—which is more beneficial to consumers? Chinese people's lives are getting better, but that doesn't mean we should be naive in our spending. In 2019, there are many discussions about consumption upgrading, downgrading, and differentiation. Regardless of the level, I think we shouldn't "bypass" consumers. Instead, we should consume clearly and shop meticulously.

Traditional e-commerce, in order to offer limited-time discounts, usually stock up in the short term. Then, to meet dear consumers, brands have to pay for traffic and exposure on traditional e-commerce platforms, such as through direct traffic or diamond exhibitions. Basic commercial costs reach 36-40%. Let's calculate: a product leaves the brand, goes through reasonable channel profit markups, and then adds these high channel costs. You can imagine what price it reaches the consumer. Of course, platforms aren't stupid; whether through packaging or marketing, they will make you feel a "sense of cheapness." We've all experienced the tricks!

Where there are vested interests, there are disruptors and game-changers. Just as traditional e-commerce disrupted supermarkets, convenience stores, and mom-and-pop shops, membership stores are now disrupting traditional e-commerce.

Let me use Sam's Club as an example to explain how this store provides consumers with "high quality, low price, premium products, and fast delivery."

First, from a business model perspective, Sam's Club uses large-scale centralized procurement, allowing for long-term price adjustments and proactive pricing. They can even reduce prices on the top 1,000 best-selling products by an average of over 10% per year for two consecutive years. For instance, during a recent visit to Sam's Club, I found that nearly a hundred products were offered to members at special prices, all in one go. Interested consumers can visit the store to experience it. After seeing this price adjustment list, we joked to the company: "If gross profit is the company's fat, then nearly a hundred products are nearly a hundred cuts!" Each cut draws blood, and every price is a shocking deal! Don't believe it? We sampled some products and made comparisons.

We also took some real photos on site.

Are you tempted after seeing this?

Second, they don't profit from product price differences but by acting as consumers' buyers (charging membership fees). This is a major disruptive logic that fundamentally solves the problem of high product markup rates. You can imagine how much consumers can save by shopping at Sam's Club. It's truly "good products at fair prices"!

How is "good products at fair prices" achieved? First, ensure quality; second, keep prices low. For example, Sam's Club's private brand tissue is good and affordable. The "good" is mainly reflected in the fact that Sam's Club's tissue manufacturers are well-known brand OEM factories, so quality is guaranteed. "Affordable" means Sam's Club's procurement team has a mature pricing standard system that can professionally minimize costs at different stages, such as packaging bag costs, pulp costs, and core tube costs, avoiding inflated prices. Then, adding reasonable profit gives the final product price.

The value of products is mainly reflected in two aspects: one is that Sam's Club uses its own strength to reduce costs and control prices; the other is that Sam's Club strictly controls product quality, ensuring higher quality at the same price. We collected the 8 products with the highest penetration and repurchase rates in Sam's Club stores and listed the features that make them appealing to consumers. See the table below:

Don't think that's all; you haven't seen the other benefits besides exclusive member discounts! Key points, listen up! Recently, Sam's Club has begun implementing the "Premium Member Worry-Free Upgrade Plan" nationwide. When ordinary members upgrade to premium members, every penny they spend is genuinely returned to users, ensuring members make a profit without risk.

Also, Sam's Club is holding a premium "Member Week" in Shenzhen from October 24 to October 31, offering even lower prices on some products for premium members. In short, getting a premium membership card is like a long-term value investment. Because you gain not only long-term product discounts but also a better shopping experience and richer benefits, such as 2% monthly points rebate, saving up to 6,000 yuan a year; a monthly free shipping coupon for online purchases, worth 180 yuan; free extended warranty for home appliances, worth 495 yuan; and family oral care worth 8,000 yuan.

Finally, after buying products online, aren't you often troubled by logistics? But at Sam's Club, you won't be; logistics is super fast! What you see is what you get; no need to wait a week or even ten days. In cities with stores, some products can be delivered within an hour, and items can be delivered to your door in the time it takes to order takeout. Isn't that great?

-03- The era of seeing flowers in the fog, the moon in the water, and waiting with longing has passed! Why am I calculating all this for you in such detail? Because data doesn't lie! You can also ignore all this. From a consumption perspective, just buy with confidence, buy boldly, and buy easily. Shopping is a process of enjoyment and pleasure. It's said that shopping can trigger dopamine secretion and bring about a mental orgasm. I think that's why many people become shopaholics. It's supposed to be a joyful shopping day for consumers worldwide. The worst thing is when you're happy and suddenly get annoyed, right? With membership supermarkets like Sam's Club, the era when consumers saw flowers in the fog, the moon in the water, and waited with longing has passed!

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