On August 28th, Costco, which was once closed on the first day of opening, began to take measures to limit the flow. According to the official information of the store, the number of shoppers in the store will be controlled within 2000 in the future. On the first day of opening, it is conservatively estimated that at least 10,000 consumers in the store are shopping at the same time.
event
Limited flow of 2000 people
Queue for more than an hour and can’t enter the market for shopping.
The Beijing Youth Daily reporter learned that at 8: 30 am on August 28, customers had already lined up at the entrance of Costco. On-site staff marked a queuing area in the square in front of the store with a mobile fence, and released customers to the store in batches. On that day, the weather in the area was hot and sunny, but the queuing ground was not covered, and many customers put up umbrellas when queuing outside.
According to videos posted by some customers on social media, even if they are allowed to enter Costco’s building, customers cannot directly enter the store. Customers need to queue downstairs in the parking lot in the building before they can enter the store. Due to the hot weather, the parking lot is very stuffy, and some customers who really can’t stand it give up the queue and leave. Some customers said that the number of people released from the store is small at a time, and it is estimated that it will take more than an hour from the parking lot to entering the store. However, there is no ventilation system in the parking lot, and even if there are staff members who send water, it is really unbearable.
Some customers complained that the store opened at 8: 30, and they arrived at the scene at 8: 30 and were told to queue up and enter in batches. After queuing for more than an hour, they still could not enter the store.
This is the second day of the store’s opening. The reporter of Beiqing Daily learned that on the first day of the store’s opening, it may be due to the store’s underestimation of the number of visitors, resulting in serious congestion on the surrounding roads that day. Many customers need to walk to the store from one kilometer away, and the parking lot needs to wait for about 3 hours to enter. The store is even more crowded, and the cashier informant is crowded and crowded. Some customers say that it takes two hours to complete the checkout. In the end, the store’s first day of business lasted only about 5 hours and was urgently stopped.
The official micro-signal of Costco’s market opener said, "It is decided to control the number of shoppers in the store within 2,000 from Wednesday, August 28th. The local police will help us to divert traffic around the store and try our best to reduce the impact on nearby communities. At the same time, we are also trying to improve the internal passenger flow management system. " At the same time, the store reminds customers that they need to show their membership cards or electronic membership cards when they enter the venue.
In addition, in the next week, Costco will inform members of the latest situation of the store by SMS and APP, so that members can know in time whether the passenger flow in the store is close to saturation or needs a long wait. However, Costco did not specify the time when the current limit was cut off.
survey
Has been adhering to the low price and high quality sales strategy.
Hot products sold out quickly when the first store opened in the Mainland.
Costco is a paid membership supermarket, and the popularity of its opening is not unrelated to the promotion of its explosive products. When other supermarkets still use eggs and cooking oil, Costco’s advertisements before the opening of its first store in the Mainland were Feitian Maotai of 1,498 yuan, Wuliangye of 919 yuan and Hermes at a discount. Of course, these products are not the whole promotion, but they are enough to attract attention, such as Feitian Maotai, which was robbed soon after it opened.
In addition, the prices of some Costco products are claimed to be 10% to 30% lower than the market. It attracts the American middle class through an average gross profit margin of about 10% in the United States, and then generates income through membership fees. Since the application for membership was opened on July 1st, Costco Minhang Store has accumulated tens of thousands of members, far exceeding previous expectations. Of course, as a marketing tool, the annual membership fee of Costco is 199 yuan before opening and 299 yuan after opening.
The reporter of Beiqing Daily learned that because Costco has been adhering to the low-cost and high-quality sales strategy in the United States, the gross profit margin of its products has always remained at around 10% to 11%, far lower than other retail enterprises. As a comparison, the gross profit margin of ordinary supermarkets will be 15% to 25%, while in Costco, once the goods are higher than 14%, they must be reported to the CEO, and then approved by the board of directors. If the prices set elsewhere are lower than those in Costco, they will be removed from the shelves.
This operating model has also attracted many celebrities to "speak for" it. In Chinese mainland, Costco has a large number of followers. In the early years, Xiaomi CEO Lei Jun said that Costco: "The most important reason why Costco has been invincible for so many years is to grasp the essence of its existence: the goods are excellent, the prices are extremely low, and the services are beyond expectations."
analyse
The opportunity to enter the mainland market is better.
It will take time to test whether you can keep up with the new retail players in China.
"If you have seen the opening of foreign supermarkets such as Carrefour, Yibaijia, Metro, Tesco and CP Lotus in China, you will feel how familiar the opening of Costco is.
But what are the results of these stores now? Carrefour was acquired by Suning, Tesco was acquired by China Resources, Metro was looking for a buyer, and the other two companies stuck to their original stores, resulting in business contraction and tepid business. A senior industry person who has been engaged in retail for 20 years said that Costco chose a better opportunity to enter the mainland market — — China is in the tide of consumption transformation and upgrading: paid membership system has been widely accepted by young consumers; Compared with the past, the new generation of consumers emphasize the cost performance of goods rather than simply pursuing low prices; Physical commerce, led by scene experience and service, is also recovering; E-commerce companies have also laid out offline markets.
The right timing does not mean that Costco can succeed by copying the American model.
In fact, Costco’s membership is its biggest source of income, which increases the stickiness of its members because of the payment of membership fees. Coupled with its huge stores, remote locations and American family shopping habits, more than half of Costco’s profits come from peripheral services such as cars, restaurants and gas stations. The reporter of Beiqing Daily learned that in fiscal year 2017, the renewal rate of Costco members in the US market was 90%, and that in Canada was 87%. The annual consumption of each paying member in the United States in Costco is $2,554, and it is $213 per month. Although Costco’s first store in the mainland was selected in a relatively "lonely" location in Minhang District, it is still difficult to completely copy the American model in the mainland.
In addition, Costco’s products in the United States can be sold at low prices mainly because it owns the ownership of the land and buildings where most shops are located, that is, it does not have to pay rent. In China, the cost of land acquisition for opening a shop is higher, and cooperation with commercial real estate is the mainstream choice, so rent is inevitable. However, the rental composition of domestic commercial real estate developers is mostly linked to the store performance, so it is less likely to lower the rental cost by selling more goods.
In addition, whether its iconic "large-capacity" goods can be adapted and satisfied by "small-scale" Chinese families is also a major factor that determines whether its model can be popularized and the cost of goods is high or low.
The competition of e-commerce has continued from online to offline. For example, there are different e-commerce companies standing behind Box Horse and Suning Store. Among these new retail players who know more about China, it remains to be seen whether Costco can keep up with China’s gameplay. (Reporter zhangxin Coordinator/Yu Meiying)