Seven membership systems in the era of e-commerce
In the retail circle, the membership system has been iterative, so we might as well look at the membership logic from Amazon, Nike, Sephora, Starbucks and Xiaomi.
This article comes from WeChat WeChat official account:Retail Watch (ID: On Retail), author: Wang Ziwei
For retailers, the membership system is basically unavoidable. Let’s take a look at what the most mainstream membership system in the e-commerce era is like.
From a global perspective, there are seven most common forms:
1. Integral-hierarchy system
2. Service subscription system
3. Entity subscription system
4. Charity system
5. Sharing cooperation system
6. Community system
7. TOKEN system
I. Integral-Hierarchy System
This is almost the simplest one. In short, every time you spend X yuan, you get Y points. The more you spend, the higher the score.The only variable seems to be that there may be reward points at different times and through different channels, such as 5 times points for in-store consumption during the celebration period and 10 times points for e-commerce consumption during the Black Five/double 11 period.
Let’s take a foreign example, that is, the clothing brand "North"（North Face）",its integral system is called" VIPeak ".
For consumers, understanding this system is also very simple, that is, for every dollar spent, they get 10 points-whether online or offline, if they spend at outlets, they get 5 points for every dollar.
These points can be used in future consumption. To this end, North Face allows users to manage their accounts, buy goods, see points and redeem rewards through the App.
This is the simplest point system, through which consumers are willing to continue to shop. North Face is a typical single-level membership system.
Based on this logic, there will be a multi-level membership system, generally and periodically.(e.g. 1 year)The consumption amount or points are positively related.The characteristic of hierarchical system is that the higher consumers spend, the more rewards they get.
This level itself is also a gamification system, which links consumption with "playing". In the United States, a classic case is the beauty brand e.l.f
Consumers with 0-100 points are at the first level, consumers with 101-400 points are at the second level, and those with 401 points or above are at the highest level-the more membership points, the more unique the rewards.The uniqueness of the highest level is an important factor that urges consumers to buy more goods.
From the point of view of points, the first-level consumers get 2 points for spending 1 dollar, the second-level consumers get 4 points for spending 1 dollar, and the third-level consumers get 6 points for spending 1 dollar, and consumers can get corresponding services by using points.
Similarly, Starbucks in the United States also has this hierarchical system, which is divided into green card levels.（Green Level）And gold card level（Gold Level）.
When the user has less than 299 stars, it is a green card level, and will enjoy the privileges of getting 2 stars for every $1 spent, birthday gifts, mobile payment, placing orders in advance, and free refills in the store; When the number of stars reaches 300 or above, the user will be upgraded to the gold card level. At this time, he will not only enjoy all the green card level permissions, but also double the star accumulation day every month, get a gold card membership card with his name printed on it, and exchange free food or coffee every 125 stars.
In addition to getting stars through consumption, there are also some activities in Starbucks APP, such as going to the store for consumption at a specific time, getting extra stars, and buying specific goods to get extra star rewards.
Second, the paid subscription system-service category
In the payment system, consumers need to pay a monthly fee or an annual fee to become a VIP. Generally speaking, there must be a solid consumer base.After all, it is difficult for you to make a new user become a paying member with little contact with you, so this payment system is basically used to maintain experienced users.
In addition, this payment system must have membership benefits, otherwise users don’t have to pay you in vain.
The most classic case is Amazon. Now Prime with an annual fee of $119 only needs $79 at the earliest, but only one problem was solved in that year, that is, it was guaranteed to be delivered free of charge within 2 days. This was the biggest problem of e-commerce in that year, otherwise a product would only be available in 2-3 weeks, and even if the price was superior, it could not wait.
Later, many functions were added to Prime for free, such as Amazon music, Amazon photos (unlimited storage of photos) and Amazon videos.(Watch all kinds of movies, dramas and original dramas at will)Wait a minute. In 2018, according to data from investment bank JP Morgan, the annual membership fee of $119 is worth about $784, which can be said to be over-valued.
The extreme, even extreme, is Costco.After covering the cost of goods, personnel and management expenses, the income generated by its goods is almost used up, so that its final profit returned to shareholders and membership fees are almost equal.
Third, the paid subscription system-commodity category
Another logic of the payment system is, "subscription box.（Subscription Box）Type ",that is, the subscription of physical items such as products/commodities.
The goods in the "subscription box" generally need to be purchased repeatedly. Take Bean Box as an example, it is the subscription of coffee-normal purchase is the normal price, but if you subscribe, you can always receive coffee on schedule within a cycle, and you can enjoy a discount.The essence is a behavior of directly locking consumers and locking demand, and then it may be the reverse supply chain.
Another advantage of this subscription is that it can increase the lifetime value of customers-from the case of Bean Box, can it be the same if you let consumers buy once and realize repeated service for six months, and let consumers buy for one month and one month?
Amazon has a similar service, and some products can be "subscribed" directly on the purchase page-usually with a discount of about 5%.
Fourth, the charity system
Discount can be a component of the membership system, but it is not necessary.
Therefore,The logic of the charity system is that you are attracting consumers with your own values, thus establishing a stronger relationship.The more common way is that enterprises donate a percentage of their income to charity, such as donating the money to charities, disease research institutions, animal protection organizations and so on.
A small evolutionary version here is that the enterprise will give you several optional donor institutions, and you can choose the one you are willing to donate. This is the case with The Body Shop in America, which introduced animal welfare into its membership system.
In addition to receiving rewards and VIP treatment, consumers can also choose to donate a percentage of their spending to Born Free USA, an animal welfare institution. This is also because The Body Shop has always emphasized environmental responsibility.
This logic lies in that the communication with consumers is not only the exchange of goods and services, but also the integration of values, which in turn makes the loyalty of consumers come to a different and uncontested field.It can be said to be a "blue ocean strategy of values".
V. Sharing cooperation system
A consumer will not only have a membership card, so the demand is also diverse. It can be said that consumers’ spending time is very idle, and the core is whether businesses from different formats can "cut leeks" together-buy electronic products from you, shoes from me and snacks from him.
Therefore, consumers will also want more flexibility in rewards. At this time, what is needed is cross-industry cooperation, which is equivalent to consumer sharing. After all, every enterprise has private domain traffic and data is single-segmented. If(Where permitted by law)Realize the docking of data, then almost draw the whole life of consumers.
In the United States, Nike’s membership system is like this. It has cooperated with Apple, Classpass and Headspace. These companies are not randomly selected, but can be linked to sports. They belong to the cooperation of several enterprises with sports as their core values.
At the same time, Nike also has a variety of apps for different sports to help members achieve their exercise goals. Then as long as the consumer’s behavior can be recorded by the App, then you can get a reward.
Japan’s Sakya Bookstore is also this logic, which focuses on life: through the T-card system, the parent company of Sakya Bookstore has opened 887,000 stores in 179 Japanese companies in May 2018, realizing the universality of points, and the profit does not come from the points themselves, but from the big data insight of consumers. Because consumer data is no longer just a single book purchase, eating, shopping, but all the synthesis.
In China, this kind of cross-industry cooperation is also gradually emerging. For example, JD.COM Plus can give you an iQiyi member.It is also the opening of data and traffic sharing between the two parties, which in turn turns traffic into "reservation".
VI. Community system
Beauty cosmetics brand Sephora（Sephora）Beauty Insider, a membership system, must be said. On the one hand, this system can be upgraded to three grades based on consumption, and every dollar spent in each grade can get different grades of points feedback.(1 dollar for 1 point, 1.25 points, 1.5 points respectively)At the same time, there are opportunities to get more exclusive services with the improvement of grades in the traditional "hierarchical system".
Besides,The biggest feature of Sephora’s membership system is the establishment of a community-to communicate with various members, find inspiration, participate in exclusive activities and so on.At this time, members of Sephora come to the brand community, and Sephora can understand the needs of consumers and then optimize its product design.
This logic also exists in China, that is, in Xiaomi’s community, a group of fans gather in the community to communicate with each other and put forward their own needs, and Xiaomi’s product manager can collect relevant information and update the corresponding system: users feel that they are valued, and Xiaomi has obtained consumer demand and met consumer demand, and both sides are happy.
Seven, TOKEN type
The last one is the TOKEN logic in the blockchain, or,Is similar to "asset securitization"（ABS）The idea of "assets token" should be called as a kind of "assets token"（ABT）”。
This kind of logic can be seen in China. At present, it can be simply divided into two types. The first type is "commodity tokenization", which is represented by the second-hand e-commerce enjoyment theory, and the second type is "behavior tokenization". I think the representatives are interesting headlines and today’s headlines. Let’s look at it together:
"Commodity Tokenization"
The problem with second-hand e-commerce is that the seller wants to sell an item that is "emotionally connected with himself", and based on game theory, the buyer will directly regard all second-hand goods as having a problem, forming a "lemon market effect" and paying a very low price, or, no matter how wonderful your price is and how perfect the goods are, I will ask for a 20% discount first and then post it-as long as I have sold something on idle fish once.
This will greatly reduce the efficiency of the transaction, and the seller will usually feel very uncomfortable, and finally there may be problems on the "supply side", which will have a negative effect on the market.
The logic of enjoying things is very interesting, that is, instead of introducing money, users use small red flowers. Users earn small red flowers through various behaviors, such as signing in and sharing, and then "exchange" other people’s goods with their own small red flowers. Because the little red flower is not anchored with the RMB, so,Users will participate in the purchase according to their real needs, rather than the "chopping behavior" caused by "consumerism".As a result, the pressure on both buyers and sellers is reduced, which greatly promotes the circulation efficiency of goods.
This logic actually exists in offline channels, that is, "moon cake tickets", that is, the moon cakes are placed there, and the person who finally gets the tickets goes to a specific place to pick up the goods. As for the intermediate process-the goods are not moving, and the tickets are flying around, which greatly reduces the cost. The logic of this set of freight tickets is "online" and combined with the mode of second-hand e-commerce, which forms the theory of enjoying things.
"Behavior Tokenization"
The second logic is "behavior token", which is the case with interesting headlines.
To put it simply, users can be rewarded for all their behaviors on the APP, including reading gold coins, watching videos, sharing gold coins, and rewarding users with "tokens" in a different way, and then this "token" is every cycle.(The period of interesting headlines is "1 day")Will be cleared, converted into RMB, accumulated to a certain amount, you can withdraw cash-or buy other goods directly in the APP.
The logic is simple,Retaining customers requires costs, so why not give these costs directly to customers as much as possible?And these sources of RMB are also simple, just divide the gross profit of each cycle directly. So now, we will find that many apps have this logic, such as the extreme version of today’s headlines, various headline apps, and various information apps.
Related links:"Integral Incentive System" from the Perspectives of JD.COM, Interesting Headlines and Amaya.
This article comes from WeChat WeChat official account:Retail Watch (ID: On Retail), author: Wang Ziwei
