The Industrial Giant Reborn

"Cash back?" Pierce didn't understand.

Chen Zhiwen explained: "The logic is very simple. We issue membership cards, assuming a card of 10 dollars, and invite nearby consumers to become members. Then these people will earn points when they spend in our supermarkets. We can return cash back after one year, such as 2% That is to say, as long as the user spends 500 US dollars, the membership card is free, and if it exceeds, then it can be discounted as a shopping deposit, or the supermarket can hold activities at regular intervals, such as redeeming with points Common 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 you spend, you can get back the money you invested. $500 is not much for an ordinary family, and daily consumption is far more than that. And as long as this system is in place, those who have membership cards in their hands will also choose to come to our supermarket first. Besides, our supermarket itself is also high-quality and cheap. They can buy enough supplies at one time, and then consume one or two at home. month. "

"This method is very innovative." Pierce thought about it carefully. The cashback system is indeed very easy to persuade consumers to spend money to buy memberships. Before him, he asked his staff to go to a nearby supermarket to copy prices, and then sorted out the list before taking it. Comparing with consumers, we can 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 takes a lot of time and manpower to implement, and the effect is not as good as the former.

And with the cashback system, consumers will be more willing to shop. After all, the price itself is cheap, and the more you buy, you can earn a little more. In addition, the current price of gasoline is high, and many ordinary families in the United States have cars that are fuel-hungry. Now there are very few people who drive out to spend money, and most people should be more inclined to buy enough supplies at one time to save fuel costs.

"However, this change is too big and it is not suitable for direct testing on Fedmart, so I need to build another brand and start over. However, considering that it may rob Fedmart's business, I can go to other states for testing, such as between Los Angeles and San Francisco. In a big city like this, and because it is our first store, I hope it will be my own property with a large scale, and it doesn’t matter if it is decorated, it’s almost enough.” Chen Zhiwen continued.

One of the disadvantages of warehouse-style supermarkets is that it is difficult to build supermarkets everywhere like Wal-Mart, because its core is that there are few varieties of goods and it follows the route of small profits and high sales, so it is difficult to establish in small cities or even ordinary cities. The city has enough population and higher consumption power to support a large warehouse supermarket. There are not many Costcos in later generations, and by 2020, there will only be 700+ stores in the world.

Relatively speaking, the later generations of Costco's management methods are still too conservative, and the funding problem is also the main reason. Now, although Chen Zhiwen wants to learn from Costco's business methods, he will not be conservative. He needs to expand rapidly and expand globally as soon as possible. Set up branches in core big cities, and enter the mainland market at the fastest speed in the next 20 years.

Of course, Costco’s business model will definitely not work in the early stages of the mainland. Supermarkets like RT-Mart and Suguo will do. Different places also need to consider different business models. Warehouse-style supermarkets have too high requirements for the economy.

Even though the funds are relatively tight now, he is still willing to spend money to start the brand first. As long as the first Costco has many users, high sales volume, and certain profits, he can use bank funds to develop. Chen Zhiwen's layout in Hong Kong and the United States has paid off, and Costco's expansion funds will no longer be a problem.

"There are many supermarkets in a big city like Los Angeles. It's a big gamble for us to open a store here, and it's a new store." Pierce said with a smile.

"A good business model is never afraid of competitors. What we need is to gain a firm foothold in big cities like Los Angeles and San Francisco, and then we can quickly conquer other cities." Chen Zhiwen nodded and said, "I hope you can go there in person. Los Angeles is in charge of this store, so it must make a name for itself.”

The business model of warehouse supermarkets is indeed very novel in this era. After all, it is a successful business model for decades later. No one thought of 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 for this kind of stuff.

However, even in the Internet age, the old monopoly giants are very slow to respond to new companies with new models. For example, Google reacted to Facebook. Also, with so many retail giants, Costco must already have a sufficient scale when they react, because the scale is not large, these people will never find out.

Historically, only Wal-Mart’s Sam Walton valued Costco’s business model very early and very young, and established the first Sam’s Club store in 1983, but it was still too late. In the field of warehouse supermarkets, At that time, Costco has been all the way.

However, regardless of whether his own intervention will change history, Chen Zhiwen needs a capable person to manage it himself and sum up all the successful experiences. After all, the method is the method, but how to do it can be the best. To do it is absolutely blind, and we 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 enough shares to their team, so that they are willing to work hard for the company's growth. Anyway, as long as the company is large, in the environment of the United States, a Chinese will not be allowed to control such a large group alone , sooner or later the shares will be given out. Of course, other big consortiums will still have to give in the future, and cooperate with each other, and it will be inevitable to go public at that time.

What reassures Chen Zhiwen the most is Pierce's age. Ten years later, he will be almost 70 years old, and he will not have the ambition to fight for power.

"That's no problem. Fedmart can operate normally." Pierce nodded and asked again, "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: "In addition, there is another small thing. I hope that there will be one or several very cheap products in Costco, such as roast chicken for $1, and a large Coke?"

"One dollar?" Pierce was stunned for a moment, and said, "A large glass of Coke is not a problem, but this roast chicken seems to be difficult to achieve for one dollar. What does Mr. Chen mean to use this to attract people at a loss?"

"Yes, it's similar to McDonald's roast chicken. It tastes good, or sausage is fine. Losing money is necessary. I just want to lose money to attract a lot of people. This discount is still very good, but you need to find a roast chicken with the right taste and Sausage will do." Chen Zhiwen said with a smile.

Costco in later generations sells hundreds of millions of roasted chickens a year, and an average member buys roasted chickens twice a year. This is a very good feedback to members. Just like the supermarkets in the mainland in the previous life, many of them sold eggs at a low price or even at a loss. The truth is, any normal person will not come to the supermarket just to eat a roast chicken or buy an egg. Even if there is, there are very few, and most people will buy other things.

"Okay, that's okay." Pierce nodded.