How do convenience stores, supermarkets, department stores, outlets, e-commerce and other retail formats leverage the membership economy?

In the fierce market competition of the retail industry, membership economy is gradually becoming an important strategy for brands and merchants to maintain customer relationships and improve sales performance. How to achieve a win-win situation of membership and fan economy and big IP interactive entertainment marketing?

As market competition becomes increasingly fierce and saturated, global brands and retailers are facing new business challenges and opportunities.

Membership (fan) economy and big IP entertainment marketing are currently the hottest brand management strategies and are gradually becoming a new battlefield for global brands and retail companies. Whether it is shopping malls, department stores, supermarkets, convenience stores, e-commerce platforms or brand owners, they all need to attract and retain key member (or fan) consumer groups by continuously innovating and optimizing membership services.

Not only that, in-depth analysis and mining of member and fan data through digital technologies such as AI to achieve precise marketing and personalized services is also a top priority for improving business competitiveness and market share.

As part of the "Retail Innovation Series from the Perspective of Sustainable Business Model Development", this article aims to analyze the next strategies of global brands and retail businesses. For example, in global cases, 7-ELEVEn's OPENPOINT retail ecosystem management, Taipei Breeze Plaza's "Breeze Night" (the originator of the "VIP Member Closure" event) and Far Eastern Department Store Happy GO, etc., provide valuable experience sharing and future industry development predictions for retail industry practitioners, entrepreneurs, brand owners, franchisees and investors.

1. How can convenience stores create a retail ecosystem of pan-life centers through membership economy?

Exploring and amplifying the membership economy is one of the growth curves that convenience store brands continue to build.

In the membership economy, merchants can attract consumers to become members through points, discounts, member-exclusive activities, etc., and establish long-term and stable consumer relationships. At the same time, through data analysis and mining, merchants can also better understand consumers' shopping behaviors and preferences, provide them with more personalized products and services, improve consumers' shopping experience and satisfaction, and thus enhance consumer loyalty and stickiness.

In terms of performance, seizing the membership economy can not only increase sales and profits, but also enhance brand influence and competitiveness. By continuously optimizing the membership system and improving service quality, we can broaden the membership base and establish a closer consumer and interactive relationship with them, thus standing out in the "people" dimension in the fierce market competition.

Focusing on the membership strategy of 7-ELEVEn convenience stores in Taiwan, by establishing the OPEN POINT membership system in Taiwan, the company has built a retail membership ecosystem as a pan-life center.

This ecosystem not only covers food, clothing, housing, transportation, entertainment and other aspects, but also provides members with abundant discounts and benefits through cross-industry and cross-channel cooperation. Taiwan 7-ELEVEn members can also use it at any time and enjoy double value-added. This move further optimizes the membership management of the retail ecosystem.

Members can redeem points for a variety of goods and services, including electronic gift certificates from Carrefour Taiwan under the Uni-President Group, coupons for Yoxi rides, free shipping coupons from iOPEN Mall, etc. In addition, 7-ELEVEn has also launched designated double gift points activities with cross-industry partners such as Klook and Hahow, further enhancing the stickiness and loyalty of members.

Image: 7-ELEVEn Taiwan

In terms of digitalization, 7-ELEVEn has created more than NT$4.5 billion in digital business opportunities by introducing OPEN POINT's icash2.0 service. This service not only provides a convenient one-click card binding function, but also encourages members to enjoy bank and credit card benefits and additional OPEN POINT points through the three major payment tools.

In addition, 7-ELEVEn has attracted more than 8 million members in Taiwan to pick up goods at 7-ELEVEn every month by launching innovative practices such as diversified shared products and celebrity combinations to increase purchasing power.

Figure: Taiwan 7-ELEVEn membership service

In terms of member contributions, 7-ELEVEn has achieved double-digit growth in recent years, and the amount of OPEN POINT member consumption exceeded NT$100 billion for the first time in 2023. This achievement not only reflects the strong appeal of 7-ELEVEn in the Taiwan market, but also reflects the success of its membership system and the activeness of its membership ecosystem.

Coincidentally, Taiwan's FamilyMart also officially branded "points" in 2023.

According to the author's understanding, the number of members of Taiwan FamilyMart convenience stores has reached 17.5 million. By introducing the "Fa Points" system, brand awareness has been enhanced. In addition, Taiwan FamilyMart has also launched convenient functions such as using points to offset water and electricity bills, further enhancing the practical value of points.

2. Shopping malls and department stores, exclusive events and membership tiers

Focusing on shopping malls and department stores, the membership operation strategies of these two major companies are also worth exploring.

Breeze Taipei Breeze Night, the originator of VIP member closing activities

The "Breeze Night VIP Member Closure" event initiated by Taipei Breeze Plaza is an innovative attempt in the VIP/VIC membership economy.

Photo: Breeze Plaza

The event originated in 2004. It aims to provide VIP members and guests with a more private and exclusive experience with highlights such as a fashion feast, celebrity gatherings, exquisite food and drinks, etc., attracting the participation of many high-net-worth customers. It has now become a landmark event in the mall for in-depth interaction between brands and members and sharing of honorable experiences.

Photo: Breeze Night Series of Activities

With years of development, the 2023 Breeze Night activities have become more diversified and international. In addition to traditional shopping and entertainment projects, it has also added international food festivals, fashion trend forums and other activities, allowing members to enjoy a feast of shopping, food and culture in one night.

Image: Breeze Night Marketing Promotion

At the same time, Breeze Night 2023 also made full use of the power of social media, allowing more VIPs (VICs) to participate in this event through online live broadcasts, interactive games and other means.

Taiwan Far Eastern Department Store Happy GO Membership Economy has many innovations

First of all, by launching the 3.0 version of the Far Eastern Department Store App and launching a new membership grading system, the newly added functions such as product redemption and consumption record inquiry in the App have effectively improved customers' stickiness to information utilization, allowing customers to manage their accounts more conveniently, thereby enhancing their loyalty and sense of belonging to the brand.

Photo: Taiwan Far Eastern Department Store Happy GO

In addition, Far Eastern Department Store Happy GO also makes full use of consumer data, combining Far Eastern Department Store App with Far Eastern Group's various branches and cross-platform social platform data to promote membership management and targeted marketing. This move not only makes the marketing strategy more precise, but also brings higher market returns to the company.

It can be said that Taiwan Far Eastern Department Store Happy GO’s successful practice in membership economy has not only improved members’ loyalty and satisfaction, but also laid a solid foundation for the long-term development of the company.

Photo: FamilyMart Taiwan

In order to enhance the stickiness of members, Taiwan FamilyMart has also continuously innovated its member services, such as taking the lead in realizing cross-store pickup through APP purchase and self-pickup of packages, and cooperating with insurance e-commerce Yianwang to provide members with convenient insurance services. These measures have effectively improved member satisfaction and stabilized the proportion of member revenue at 50% of the overall performance, bringing considerable benefits to Taiwan FamilyMart.

3. Outlet: Digitalization and Tourism

China's outlet market has shown a rapid growth trend in recent years. According to the "2022-2023 China Outlet Industry White Paper", the sales growth rate of China's outlet industry in 2022 will reach 8%, higher than other retail business formats. There are more than 200 outlet projects in operation across the country, with sales of approximately 210 billion yuan.

In addition, in the next three years or so, China's outlet industry will still be in a rapid development stage and has huge development potential. New entrants and existing players need to formulate appropriate strategies based on market conditions and consumer demand, and continue to innovate and optimize their services.

In such a market context, both new entrants and existing operators need to pay close attention to market conditions and consumer demand, and formulate and adjust strategies accordingly. In particular, innovation and optimized services in the outlet membership economy have become keywords in the industry.

Japan Mitsui Group

MITSUI OUTLET PARK, a subsidiary of Japan's Mitsui Group in Taiwan, has three stores in the north, central and south of Taiwan. Starting in 2023, it will connect the APP with its LaLaport. Through this initiative, it has currently attracted about 680,000 APP members, effectively improving the shopping stickiness of members.

Photo: MITSUI OUTLET PARK, Taiwan

Gloria Outlets Taiwan

Although the main source of income for outlets is tourists, the contribution of members cannot be underestimated. In Taiwan, Gloria Outlets is close to Taoyuan High Speed ​​Rail Station, and its member contribution rate is as high as 50%, which is unique in the Taiwanese industry.

Photo: Gloria Outlets

Gloria Outlets is able to attract and retain so many members mainly due to its complete range of outlet boutique brands and its strategy of cultivating the membership economy. Even during the three-year mask period, facing entry restrictions and a lack of overseas tourist sources, the performance contribution of local members remained strong, which further proves the importance of the membership economy.

4. Hotel + high-end retail commercialization, six measures to innovate services

Take the Regent Boutique Hotel in Taipei as an example. In order to tap into the membership economy, it has taken the following measures:

First, the integration of member rights and interests.

Regent Boutique combines hotel accommodation with membership benefits of high-end retail business, ensuring that members can earn points, discounts and other benefits whether they spend money in hotels or retail stores. This integrated membership benefit design eliminates the need for members to switch between different merchants, thereby increasing user loyalty.

Second, unique membership activities.

Regent Boutique regularly organizes exclusive events for its members, such as fashion shows, new product launches, art exhibitions, etc. These events usually combine the characteristics of high-end retail and hotel services to provide members with unique experiences. At the same time, these events also enhance the emotional connection between members and the brand.

Photo: Regent Hotel

Third, customized service.

Based on members' personal preferences and historical consumption records, Regent Boutique provides customized services, such as recommending suitable room types, catering and retail products to members. This personalized service not only improves members' satisfaction, but also increases the possibility of them choosing Regent Boutique again.

Photo: Regent Hotel Food

Fourth, member referral program.

In order to expand its membership base, Regent Boutique implemented a member referral program. Existing members can invite their friends and family to join, and both the successfully recommended members and new members can receive extra points or coupons as rewards. This program not only reduces the cost of acquiring members, but also increases interaction between members.

Fifth, data analysis and precision marketing.

Regent Boutique uses data analysis tools to gain an in-depth understanding of members’ consumption behaviors and preferences, thereby conducting precise marketing activities. For example, personalized discount information and product recommendations are pushed to members via email or SMS, improving the relevance and effectiveness of marketing activities.

Sixth, cross-border cooperation and resource integration.

In order to provide more abundant and diversified services, the Regent Boutique of Taipei Regent Hotel actively cooperates with other high-end brands or institutions. For example, it cooperates with well-known designers to launch limited edition products, and cooperates with high-end restaurants to provide special dining experiences. These collaborations not only increase the stickiness of members, but also improve the brand's visibility and influence, and successfully play the member economy under the framework of "hotel + high-end retail commercialization". These measures not only improve the loyalty and satisfaction of members, but also create more business opportunities, revenue and hotel brand economic value for the hotel.

5. E-commerce: Membership community + traffic + content + business

Since 2011, Taiwan's "ETtoday Pet Cloud" has been independent from ETtoday Taiwan ETtoday News Cloud. It uses the abundant new retail and new media resources of its parent company Taiwan ETtoday Media Group, and utilizes ETtoday ETtoday News Cloud's media audio and video, news, programs and Facebook. It has a pet cloud fan zone with more than 2 million fans, and also relies on ETtoday Shopping's 9.5 million members.

From the very beginning, Eastern Pet Cloud has used O2O to connect the new business model of the pet ecosystem: membership community + traffic + content + business. In 2019, it joined forces with Oscar Pet's offline chain hypermarket system. As of January 2022, it has 120 stores and service locations in 18 cities across Taiwan, with a coverage rate of 82% and a revenue market share of 10%, making it Taiwan's largest chain pet supplies brand.

Taiwan Eastern Cloud includes Eastern Pet Cloud, which has adopted diversified innovative strategies and tactics in membership economy and self-operated brands, as well as global supply chain development cooperation and business management:

First, membership economic strategy.

Dongsen Cloud attracts users to register as members by providing a wealth of membership benefits and preferential activities. For example, members can enjoy exclusive content, priority ticket purchase, discounts, etc. At the same time, Dongsen Cloud also increases member stickiness and loyalty through points system and membership level system.

Second, building our own brand.

Eastern Cloud has actively launched its own brands, covering news, variety shows, sports, children, pets and other fields. By strictly controlling the quality of content and user experience, Eastern Cloud's own brands have gained a good reputation and influence in the market. In addition, Eastern Cloud also promotes its own brand products and services through online and offline integration.

Picture: Eastern Pet Series

Third, global supply chain development cooperation.

Eastern Cloud actively seeks to cooperate with outstanding global content providers and production companies to introduce more high-quality programs and resources. At the same time, Eastern Cloud also expands the global supply chain and improves its competitiveness by participating in international film and television festivals and conducting cross-border cooperation.

Fourth, innovation in business management.

Eastern Cloud is constantly exploring new business management models and methods to adapt to market changes and user needs. For example, by introducing advanced technologies such as big data and AI, we optimize content recommendation algorithms and improve user experience; by developing diversified businesses and expanding revenue sources, we enhance the company's profitability and risk resistance.

To sum up

The next development direction of the global retail industry is to deepen the membership (fan) economy and combine it with interactive publicity and content marketing of big IP entertainment. This strategy combines special cooperation between brand spokespersons and entertainment activities (such as concert tours, etc.) to attract and maintain the long-term attention and loyalty of members (fans). From shopping malls, department stores, supermarkets to e-commerce platforms and brand owners, major retail giants are scrambling to lay out, trying to consolidate their market position and seek new growth points through the membership (fan) economy.

In the future, creating economic value for key customers (members or fans) will be more important than mass production, especially in the commercial field. According to the 80/20 rule, about 20% of members (such as VIP or VIC customers) will contribute 80% of the economic value.

As the market becomes increasingly saturated and competition becomes fierce, the competition for membership (fan) economy emphasizes the importance of focusing on the management of membership (fan) customers and providing excellent services and unique or limited customized products. It is not difficult to find that key customers such as members create huge value through retail brands of different formats.

At present, the domestic retail industry is in a situation of fading demographic dividend and market saturation. Shopping malls, retailers and brands should turn their focus to the membership economy. Retail enterprises should be committed to providing personalized and refined services to meet and analyze the needs of these valuable customers, making them the bargaining chips of corporate assets, so as to achieve business growth and sustainable development (the "Apple fans" of Apple mobile phone fans are one of the best examples).

Drawing on the successful experience of global retail giants such as Costco, Sam's Club and IKEA, we can build a loyal membership group and form a platform economy of members and communities through refined membership management and personalized services. At the same time, we can actively develop our own brands, integrate global supply chain resources, and maximize the value of brands and retail channels, which is also the key to the sustainable development of chain retail enterprises.

Author: Gao Zhiping Editor: He Xiang Producer: Retail Business Finance ID: Retail-Finance
This article is written by the author of Operation Pie [Retail Business Finance], WeChat public account: [Retail Business Finance], originally created/authorized to be published on Operation Pie. Reproduction without permission is prohibited.

The title image is from Unsplash, based on the CC0 protocol.