Chapter 654 – Selling cards for money Part 2 of 4
Membership cards and shopping cards? These two cards have enormous potential? All the top management staffs were confused. How come they did not know about the potential of these two types of cards?
The supermarkets in Hong Kong also had membership cards and shopping cards. The sales of these cards were only so-so. It was not as profitable as what Feng Yu claims.
Membership cards were only used to identify members. Supermarket membership cards only give the members some benefits and nothing else.
Shopping cards were gift cards. Shoppers could use it to pay for their purchases.
“Seems like everyone here does not believe me. All of you are more experience than me in the supermarket industry. But all of you do not understand China’s culture! All of you are worried when I wanted to set up more supermarkets at the start. You all think that the risk is too high if we open up more supermarkets. But now, all of you are more eager than me to open up more branches.”
Feng Yu looked at Fu Guangzheng and the rest, and continued: “Did all of you realized that China already has private clubs in Guangzhou, Beijing, Shanghai, Tianjin, and a lot more cities? To enter these clubs, you need a membership card.”
“To all of you, a membership card is only a card for members to accumulate points or a discount card. But all of you forget the word ‘member’. It is a form of identity and status.”
Fu Guangzheng and the rest were still confused. Members are a form of identity and status? Membership cards are so important? Wasn’t it to attract customers and increase the rate of them returning?
Feng Yu sighed as he looked at everyone’s puzzled expression. All of them did not know that the Chinese in this era likes to compare with others. At the supermarket, when the shopper is a member, and he sees someone who wasn’t, the member will have a sense of superiority.
“Our supermarkets have parking lots, and we charge them parking fees. But all of you should know that there are not many cars in China now. Some cars are not willing to pay the parking charges and would rather park along the road and walk a few more steps. This is why not many people park their cars in our parking lots. But what if the shoppers have our membership cards and could accumulate points and free parking? If every month, we have a members’ day to let them enjoy member discounts? Or the members will get priority queues at the cashier?”
Anyway, there were not many cars in the parking lots. In the first place, they did not intend to make any money from the parking. But with these member benefits, many people with cars will want to be a member. It will be more convenient for them. They will not need to carry their purchases and walk a distance to their cars.
Not all members will be free on the Members’ day. But it will stimulate sales. This was a bandwagon effect. Chinese love to be in crowded places. When they see many people shopping at Tai Hua Supermarkets, they will be curious and want to join in.
The priority queue for members will solve the issue of people not willing to queue. They can even set up a cashier just for the members. This will let the members have a sense of superiority over the non-members.
Fu Guangzheng and Li Zekai looked at each other. They feel what Feng Yu said made sense. These do not sound anything special, but if they were able to market it well, they should be able to sell lots of membership cards.
“How do the shoppers apply to be a member? In Hong Kong, we usually give out membership cards when the shopper purchase above a certain amount on a single receipt. Also, the members will be given points for the amount they spent, and they can use the points to get rebates.” Fu Guangwei said.
“Give out free? Of course not. Our membership cards must be purchased! There will be two types of membership. The ordinary membership cards will be called VIP cards. The higher tier membership cards will be called SVIP cards. The ordinary VIP card will be sold at 30 RMB, and the SVIP card will be sold at 200 RMB.”
“200 RMB for a card? In Hong Kong, this price is not a lot. But this is China. Will people buy it? This price is almost half of an average person monthly salary. Will they spend this amount just to get a membership card?” Li Zekai frowned. Actually, he wanted to tell Feng Yu that even in Hong Kong, no one will buy a membership card at this price.
Feng Yu shook his finger. “Average workers will just buy ordinary membership cards, and the benefits they enjoy will not be that many. For example, free parking will not be offered to ordinary members, as most of them will not afford to own a car. The SVIP cards are for those wealthy people or people with some social status. 200 RMB to them is nothing. I even feel that 200 RMB is too low.”
“How many membership cards do you think we can sell?” Fu Guangzheng asked.
Feng Yu showed one finger.
“1,000?”
“10,000 SVIP cards…… per branch.”
“10,000? Per the supermarket? You are saying that we can earn 40 million RMB from just the SVIP cards alone? Don’t you think you are too optimistic?” Fu Guangzheng asked.
“I’m not. I can even tell you that 10,000 might not even be enough. Our supermarkets will announce to the shoppers that we have only 3,000 SVIP membership cards per branch. The rest of the people can only get ordinary memberships cars.”
“Hunger marketing?” Fu Guangzheng knew what Feng Yu was thinking. But hunger marketing could not be easily implemented. Many companies tried but failed.
“That’s right. You all do not understand what the Chinese are thinking. The lesser things that are available, the more people will want to get it. The more people who want it, the more they are willing to buy.” Feng Yu confidently replied.
“Then what are the total profits we can get from these membership cards?”
“At least 100 million RMB! Even though the members will be getting discounts, but we will still have profits. We can also clear our remaining stocks on members’ day.”
“Ok. Even if this is a success like you said, but 100 million RMB is only enough for us to set up two Hypermarkets.”
Feng Yu calmly replied. “That’s what I am going to say next. The shopping cars. Although our supermarkets had introduced shopping cards, we do not hire anyone to promote these cards. These cards are just placed at the cashiers. The prices of these cards are not low, and there should not be many inquiries, right?”
Fu Guangwei nodded. “That’s right. We tried to promote these cards, but many shoppers were turned off by the price tags. We are still discussing whether if we should introduce smaller denominations shopping cards so that people can buy them back as the company’s benefits for their staffs.”
Feng Yu rolled his eyes at Fu Guangwei. They had positioned these shopping cards wrongly. These shopping cards might be given out by companies as benefits for their staffs. But in China, how many companies are willing to give out such benefits?
What're the advantages of shopping cards? No names and no pins are required to use these cards. No one needs to worry even if they accepted these cards as there were no names. I can claim that I had picked up this card on the streets and was about to hand it over to the police.
To use these Shopping cards is also very convenient. There are all sorts of products in Tai Hua Supermarkets. This shopping card is equivalent to an ATM card, except it can only be used in certain places.
The shopping cards are like shopping vouchers. But the difference is that the cards are not easily damaged and more convenient to bring it around. The biggest denomination of vouchers available in China is 100 RMB. If someone is going to give 10,000 RMB worth of vouchers, that will be one thick stack of vouchers.
“You all still have not to find the right use of these shopping cards. The real purpose of these shopping cards is…… gifts!”