Don't provide too many services at the beginning, otherwise you will lose room for improvement. Since 2019, membership-based warehouse supermarkets have begun to disrupt China's retail industry. Costco's first warehouse membership store opened in Shanghai in August 2019 with impressive performance, and in 2021 it accelerated its layout in five markets: Suzhou, Shenzhen, Hangzhou, Guangzhou, and Nanjing. This ignited the fuse for the warehouse membership retail format. 2021 was a turbulent year for retail, with Walmart, Metro, Carrefour, fudi (a Chinese local brand membership warehouse store), Costco, Yonghui, Hema X, and other retail enterprises entering the warehouse membership store market in force. The Era of Co-good Marketing Arrives Warehouse membership stores serve members and their relatives. This retail format differs significantly from traditional membership models like JD PLUS, Tmall 88VIP, and Amazon Prime in operation: it serves only paying members, not all customers. The reality of China's retail market is that the traffic dividend period has ended, and activating existing stock has become the breakthrough point; advertising marketing effectiveness has declined, making the model of attracting customers through ads ineffective; near-field retail, fresh food, and group-buying e-commerce are deeply cultivating community tracks, striving for seamless terminal interception... Retail enterprises find it difficult to acquire customers on a large scale, customer acquisition costs are rising, and retail marketing has entered the era of single-customer economy. In simple terms, the single-customer economy is about user repurchase behavior. Locking in and cherishing every high-potential customer becomes a must, and deeply cultivating each individual customer becomes an inevitable choice. Based on this, the operation of retail enterprise membership stores is fundamentally correct in the Chinese retail market, but it requires market education. Moreover, deep single-customer operation based on membership is not about overdrawing customers' spending power or plundering their consumption potential, but about building sustainable partnerships through co-good marketing. Co-good marketing emphasizes that under the membership model, enterprises and members are bound by long-term value, constructing a long-term cooperative ecosystem. By jointly planning and pursuing cooperation visions, co-creating and sharing cooperation value, and co-existing and co-prospering lifestyles, they create "super users." Relevant research data shows that capturing just 10% of "super users" can achieve 70% rapid growth in performance. Co-good marketing strives to establish member loyalty and brand trust. Members not only continuously purchase goods and receive services but also contribute their time, energy, resources, and influence, becoming voluntary and spontaneous salespeople and promoters for the enterprise, sharing, promoting, and spreading positive word-of-mouth at zero cost, and referring new members. Grasping the Pulse of Deep Operation Metro's Fengtai store in Beijing selects only 2,500 SKUs, serving families of relatively successful professional women aged 25-45. This move aligns with the proposition of "the father of competitive strategy" Michael Porter: "The simplest method is the best method; simplicity is marketing power." The most realistic choice for warehouse supermarket membership stores to grow their wealth is not to gather points into a surface and advance on all fronts—that is, operating all categories, all brands, and all customers—but to gather points into lines and develop in depth, insisting on operating limited categories, limited brands, and limited customers. The value of simplicity lies in bringing members time savings, convenience, low cost, and long-term pleasant experiences. The relationship between retail enterprises and members is not accurately summarized by equivalent exchange or benefit sharing; they are a value community, that is, lifestyle sharers with similar life philosophies and values, achieving refined operation on this platform. The core of retail enterprise membership model operation is deep customer service, marketing, and management, as well as two-way interactive participation. 1. The Essence of Membership The essence of membership is to provide personalized, in-depth, subscription-based retail life services of exceptional standards to specific groups that match the target customer positioning. This seems like a niche market positioning, but the market is not small; rather, it is a deep retail service based on "single customers." Moreover, the number of members can theoretically expand indefinitely. For retail enterprises, resource consumption, energy allocation, and operational difficulty are greatly reduced, followed by low cost, high efficiency, and high returns. Members are essentially the private traffic of the retail brand, with strong brand stickiness, high controllability, and large expansion space, ensuring good business stability and growth. As long as members step into the enterprise's threshold, there is no distinction between big and small; they stand on the same starting line. Members, as original customers, are both new customers and high-potential customers. However, high-potential customers are not necessarily high-net-worth customers; "high potential" refers to high willingness to cooperate and high consumption potential, not limited to financial capacity. Members must not only have consumption and purchasing power but also have the willingness and intention for long-term and comprehensive participation, and reach service agreements and spiritual contracts with retail enterprises. 2. Evaluation of Deep Operation Member cooperation focuses on performance, mainly reflected in two aspects: qualitative performance and quantitative performance. Qualitative performance is shown in brand stickiness, enhancing brand assets by increasing member loyalty; quantitative performance is reflected in quantifiable indicators such as average order value, repurchase rate, purchase frequency, and number of customers generated through sharing fission. Member sharing fission is crucial; this is remarketing based on members, and the fission results are reflected in brand communication and member acquisition. The highest realm is not to let customers buy from you, but to let customers sell for you. Through multiple fissions, members' sales explosive power can grow exponentially; this is the N-time fission principle. From the member's perspective, evaluation is first based on satisfaction indicators, then pursues loyalty; satisfaction is the foundation of loyalty. American marketing scholar A. Parasuraman proposed five dimensions of sales service: reliability, responsiveness, assurance, tangibles, and empathy. As long as the enterprise works hard enough to do well in these five dimensions, it can improve members' ratings. 3. Dimensions of Deep Operation Cooperation is a multi-dimensional concept, and deep cooperation is precisely the comprehensive embodiment of all-round, three-dimensional cooperation. First, cooperation length, that is, the cooperation cycle and duration, with two possibilities: full-cycle cooperation based on customer lifetime value (LTV), or contract service cycle, and three indicators: renewal rate, retention rate, and churn rate. Second, cooperation width, that is, the fields and scope of cooperation, including categories and items, service items, value-added services, "old brings new" business, and sharing fission "obligations." Third, cooperation height, referring to the level and quality of cooperation, evaluated by indicators such as average order value, product satisfaction rate, service responsiveness, customer satisfaction, customer loyalty, goodwill and credit, and member word-of-mouth. Finally, cooperation density, evaluated by quantifiable indicators such as repurchase rate, purchase frequency, consumption cycle, service cycle, promotion cycle, and last shopping time. The Underlying Logic of Deep Operation Members are not only the "rice bowl" of retail enterprises but also the "reserve granary." Moreover, as the core profit source, the fixed membership fee is paid in one lump sum, the basic capital pool is clearly visible, and sustainable development of members and injection of capital flow are the core profit source. However, how should member operation, aimed at "parents who provide food and clothing," be done correctly? Retail enterprises should arm themselves with new brand, new retail, new consumption, and digital intelligence operation logic. 1. From Resource Development to Asset Operation In foreign countries, warehouse supermarket membership stores are usually built in the suburbs of cities. Walmart also built stores with this concept in China. Self-driving shopping means members have no spatial barriers to switching, especially since many current Costco and Metro stores in China are located in bustling urban areas. Only when enterprises regard members as data assets that can be accumulated, effectively retained, and increased in value can the member pool create maximum benefits. The core of member asset operation is to treat members as "strategic business units" (SUB), each being an intangible asset, market entity, and profit entity, stimulating and activating members' consumption, sales, and communication potential, and turning members into "super users." In addition to actively digging deep for potential customers, retail enterprises should also let members "self-operate," expand customers, increase sales, and achieve "one family." 2. From Manual Operation to Digital Intelligence Operation The development strategy of the retail industry has gone through three stages: product is king, traffic is king, and user is king. Without traffic, there is no member increment. Traffic comes not only from offline but also from online apps. Costco, Metro, and Hema X membership stores all have online apps that gather traffic and feed back offline. Undoubtedly, members are the essence of traffic, the customer essence precipitated after filtering and cleaning from broad traffic. After these three stages, members' choice and voice have become increasingly strong. Traditional data applications are no longer suitable for the requirements of refined customer management; digitalization and intelligence must empower member operation. User dataization and promoting marketing automation (MA) are necessary conditions for identifying, understanding, operating customers, and achieving commercial monetization. The value of user dataization will feed back into all scenarios of product production and supply, sales, channels, and operation, enabling a perfect match between product portraits, service portraits, and user portraits. The membership model is based on extreme product thinking and advocates explosive products. Imported goods, private brand goods, and exclusive goods are the core of the warehouse membership supermarket product strategy, all of which must be organized, produced, customized, and purchased through the above "three portraits." 3. From Quantity Winning to Quality Operation Membership model operation must control the number of customers, the number of products (categories and items), and the number of service items, and adopt the most intimate, necessary, and touching essential goods and necessary services. Management experts Ken Blanchard and Sheldon Bowles pointed out: "Don't provide too many services at the beginning, at least not at the start. Otherwise, you will lose room for improvement and enhancement." Therefore, first do "small," then do "big," and finally do "excellent"—this is the best strategy. Here, "small" means fewer and smaller in terms of service targets, fields, scope, and service items, making it easier to improve the fulfillment rate and performance rate of retail service commitments, thereby winning member trust. Otherwise, it will backfire. Currently, warehouse membership stores in the Chinese market mostly start from the C-end (household consumption), and it is not uncommon for enterprises to extend to the B-end (government agencies, enterprises, and institutions) in the future. However, the B-end is a replica of the C-end; the family is the basic cell of society. If you first expand the C-end and then continue to expand the B-end, the work is easy to become complex and intertwined, and it is actually unnecessary. 4. From Over-exploitation to Long-term Operation If retail enterprises over-serve, providing too many product and service choices will actually burden members, making them stay away from the circle and making it difficult to form recognition of ideas and values. An American scientific study believes that happiness is about having freedom and choice, but more choices do not bring more happiness; only when choices are few does happiness increase. Too many choices can cause "decision paralysis." The less members understand a product category, the more simplified product services should be provided. Encouraging members to over-consume is even more irrational, as are promotional price cuts and "big bloodletting," resulting in unnecessary losses for customers. The "hand-chopping party" generated by e-commerce platforms' annual "6·18" and "Double 11" promotions buy things they don't use or can't finish using, wasting and occupying funds, and finally have to sell them at low prices on second-hand e-commerce platforms like Xianyu and Zhuanzhuan. A long-term member operation mechanism based on customer lifetime value (LTV), consumption cycles, and household consumption capacity can make members convenient and happy, and enterprise operation more stable and orderly. 5. From Product Connection to Lifestyle Interaction The era of selling products is over; the era of marketing lifestyles has arrived. Facing the same market, different logic leads to different business options. Walmart also adopts a membership system. Except for Sam's Club, its supermarkets serve all customers, and these mass customers have diverse ideas, values, and lifestyles. The best business is to do all business with a group of people with similar ideas and values, rather than doing the same business with all people. Therefore, the membership model with lifestyle as the core has emerged. Costco targets middle-class consumers with incomes of $80,000-$100,000 and small and medium-sized enterprise customers, providing all-category goods. Metro is similar, providing personalized and diversified goods and services to China's new generation of middle- and high-end family markets, also targeting the middle class. Why generally only choose the number one or two product brands? It is to target China's new middle class and urban nouveau riche. This group, which values life attitude and quality of life, has unlimited potential for high consumption. Providing them with top brand products and services is like mining a rich mine. 6. From Traffic Conversion to Emotional Cooperation Under the new consumption situation, customer consumption has surpassed product consumption, increasingly emphasizing emotional consumption. Quality and price are only basic consumption factors; the spiritual value behind the consumption experience is more important. Brands with high recognition, quality, and extreme content power will become idols for members. Only such brands can have "super users." Enterprises have user thinking, and customers have fan thinking. This is business empathy, and only then can both sides be good. Fans are traffic, but what retail enterprises really need is a two-way fan relationship of "mutual follow." However, under the membership model, what retail enterprises love most are the hardcore fans who form cooperative relationships, thereby creating idol brands (IDOT). Members identify with the idol brand's ideas and values from the beginning; otherwise, they would not open their wallets to pay membership fees before shopping. Hardcore members being fans of the retail brand, fans of the products, and fans of the lifestyle are the three key steps in deep member operation. Therefore, we must adhere to this inequality relationship: hardcore fans > fans > members > users > customers. This is also the identity evolution logic of member operation. 7. From Chain Relationship to Platform Cooperation Retail enterprises should be platform builders. Self-built e-commerce platforms belong to second-category e-commerce, and traffic attraction is extremely difficult. Without traffic, there is no benefit. This is why American Costco introduced luxury goods, automobiles, and other high-end products for same-channel sales. In September 2021, the well-known American clothing retail brand GAP successively closed all 81 physical stores in the UK and Ireland, and planned to sell its physical stores in France and Italy, shifting to online sales. It is not difficult to assess that choosing existing e-commerce platforms is more realistic than self-operated enterprise online malls. GAP already has shopping malls in China, but second-category vertical e-commerce traffic is limited. Therefore, existing e-commerce platforms (such as Tmall and JD.com) and offline third-party clothing sales platforms (such as shopping malls) will inevitably become important choices for GAP. Perfect Diary, a leading domestic beauty brand, has built its own brand e-commerce, but its parent company Yixian E-commerce is losing revenue, and third-party e-commerce platforms remain the sales focus. Source: Sales and Marketing (ID: cnmarket) Are you "watching" me?