Hema Fresh-membership operation routine!

The reason for this article today is that I moved to a legendary Hequ house some time ago. The next day, when I went to Hema, I spent a huge sum of 258 yuan to open a Hema X membership under the "routine" of the shopping guide...

After one month of membership experience, I found that this huge amount of money is really worth spending. Before I knew it, I had almost earned back the membership fee. At the same time, friends around me who have opened X membership also said it is great value.

"Hequfang" means that houses within 3 kilometers of a Hema Fresh store can enjoy door-to-door delivery service with the fastest delivery time of 30 minutes. Due to the nature of marketers, we must dig deep into how Hema Fresh tricks people into becoming members, and how it uses membership benefits to get customers to buy more and more frequently (increasing store visits and repurchase rates).

Basic information of Hema Fresh

01 What is the membership system?

In daily life, everyone must have applied for various membership cards. From large shopping malls to small braised food shops near your home, they all use various means to attract you to become a member.

We simply divide the membership model into three categories:

1) Paid Membership

Paid membership locks in the long-term value of customers by packaging a full year's benefits and paying a one-time fee. The subsequent renewal rate/repurchase rate needs to be ensured by the company through high-quality services + products.

Common paid memberships:

• Offline supermarkets: Hema x membership, Sam's Club membership, Costco membership
• Benefits: iQiyi, Youku, and Tencent Video membership, NetEase Vinyl membership
• E-commerce: JD.com plus membership, Taobao 88vip
• Knowledge payment: Himalaya, Get
• …….

2) Growth Members

It means that when customers reach a certain amount of consumption or number of consumption, they can upgrade their membership level and enjoy corresponding level benefits.

The most common ones are like Starbucks membership:

3) Stored value membership

Pre-paid members recharge a certain amount at one time to enjoy membership benefits. Stored value membership is also the most popular membership form in the catering industry. For example, for Cha Yan Yue Se’s stored value members, you can get 30 for a top-up of 200, accumulate points when buying milk tea, and enjoy member prices when buying tea bags, cultural and creative products and other peripheral products.

02 Why do we need a membership system?

As we all know, as the traffic dividend disappears, the cost of acquiring customers for companies is getting higher and higher, and more and more companies are starting to engage in refined operations in private domains. In the private domain, we value the user's LTV (Life Time Value), that is, the customer's lifetime value.

LTV (Life Time Value) refers to the lifetime value of a user, which is the sum of all economic benefits a company obtains from all user interactions. The total profit a user brings to you during his or her entire life cycle, from registration to uninstallation.

This is also the purpose of enterprises building a membership system. By paying and setting thresholds, a group of high-net-worth customers can be screened out, and better services can be provided to this group of customers, thereby increasing the frequency and amount of customers' consumption and extending the user's life cycle.

Hou Yi, vice president of Alibaba Group and CEO of HEMA, said in his speech "The Battle to Fill the Gaps in 2019" at the Lianshang.com Conference that physical supermarkets need to consider the issue of covering online delivery costs, which requires that store traffic and average customer spending maintain a healthy growth momentum. Increasing the frequency of high-quality users visiting stores through the membership system will obviously have a significant impact on Hema’s store traffic and daily sales.

In short, Hema hopes to increase the frequency of these customers' visits to stores and their average order value through paid membership, thereby increasing overall sales.

At the same time, the membership fees of paid members are also a considerable source of income. Costco supermarket, which is Hema's counterpart, showed in its 2019 annual report that Costco's global membership fee revenue reached US$3.35 billion.

Image source: iMedia Consulting

03 How does Hema trick you into becoming a member?

Hema Fresh's paid membership was first tested in Shanghai in April 2018 and began to be promoted nationwide in 2019, but it was not until 2021 that the promotion process was accelerated and the promotion efforts were increased. We made drastic adjustments to membership benefits and also increased the membership price from 188/year to 258/year.

To be honest, this price is not cheap, especially in Changsha where there is no Hema membership store yet. Hema Membership Store: Only paying members can enter the store to shop, which is comparable to Sam's Club and Costco Supermarket. Hema’s membership stores are currently only open in Beijing and Shanghai. Not long ago, Hema announced that it plans to open 10 membership stores across the country this year.

Today, I will take my personal experience as an example to talk about how Hema tricks people into becoming members.

1. Field effect, creating atmosphere

Cheng Zhi Dabing mentioned the field effect in his book "Marketing Psychological Warfare":

It refers to an individual who does not have specific behaviors and emotions. Once he enters a group or is in a certain place, he will be involuntarily magnetized by the psychological field created by this group, thus producing certain behaviors and emotions that are consistent with this group or place. You need to create a hot scene where everyone is shopping, and stimulate customers' desire to consume through the power of the scene.

How did Hema create the market?

First of all, before entering the Hema physical store, I was attracted by the overwhelming X membership advertisements outside the store. In the several Hema stores I've visited, from the advertisements on both sides of the escalators, the roll-up banners at the door, to the promotional posters in the hands of the store clerks and the display boards everywhere in the store, they are all telling you that X membership is here, and the material posters list the membership benefits in detail, making people feel that it is a great value at first glance.

Online is no exception. Whether it is HEMA’s app, community or Xiaohe’s circle of friends, they are all reminding you that X membership is here in the most eye-catching way.

App guides you to activate membership

2. Member card opening gift, lowering the decision threshold

When X Member first entered Changsha, in order to attract customers to become members, it offered a 50-yuan opening gift. The 50 yuan would be deposited into your account in the form of a coupon, which could be used to offset any consumption. This meant that you only needed to spend 208 yuan to become a member.

Especially when offline shopping guides promote X membership, they will "induce" customers to activate by using such rhetoric as: "If you activate it now, you can directly use a 50-yuan discount coupon to pay for these things today. It's very cost-effective."

As the number of members increases, the benefits of the card opening gift are constantly adjusted. When you open an X membership every day, there is only a 20-yuan opening gift. Recently, when I went to Hema, I found that the opening gift has been adjusted again. It has been changed to milk or rice, you can choose either one. (It feels much more cost-effective than my 20 yuan!!)

3. Scenario implantation and description of pain points

When I was hesitant, the shopping guide said: "X members are given 31 free shipping privileges every month. If you are cooking at home and need soy sauce or salt, you can just place an order on the Hema app and it will be delivered in 30 minutes. It is very convenient." "Or if you want to add a dish to your meal but don't have time to buy groceries, you can just place an order on the app and the food will be delivered to your home..." These words really hit the young people and office workers~

In the first two years after Hema entered Changsha, you could enjoy free shipping if you bought a portion of onions or a bag of salt. Since last Spring Festival, the free shipping threshold has been adjusted to 29 yuan, and a 6 yuan delivery fee is required for purchases less than 29 yuan. For a "lazy person" like Tiantian, free shipping coupons are quite attractive. For example: A few days ago, I suddenly had the idea to make barbecue at home, but I found that I was missing potatoes and enoki mushrooms. This is when the free shipping coupon came in handy!

Key points: When describing customer pain points, embed scenarios to make customers feel more involved, thereby promoting transactions.

4. Shopping rewards points, creating extra value

Giving members points back for shopping is a common practice in many merchants’ membership systems. HEMA has also set up the benefit of giving members points back for shopping. But unlike other membership points that can only be redeemed for things that don’t seem very useful, Hema’s points can be directly used as cash.

5. No threshold coupons to promote transactions

You can receive 6 shopping coupons of 5 yuan for different categories every week, including 2 meat, milk, egg coupons and dairy product coupons worth 5.01 yuan or more. Meat, milk and eggs can be said to be indispensable foods in residents' daily lives, and they are still very practical for consumers.

6. Rich product line

The key is to attract customers to become members through high-quality products! On the one hand, Hema is accelerating the pace of opening membership stores, and on the other hand, it is also enriching its own product line. From fresh fruits and vegetables sold daily to HEMA Bakery, HEMA’s self-operated products are increasing in number and variety. On social platforms such as Xiaohongshu and Bilibili, we can see more and more bloggers sharing their Hema shopping experiences and self-operated products.

With this set of benefits, many people paid for it.

Of course, Hema’s membership is not that simple. In addition to making you pay for membership, it also requires you to keep repurchasing and make you feel that your purchase is of great value!

04 How does Hema keep you shopping?

1. Free food delivery every day to increase store visit rate

"If you become a member today, you can go over there and pick one vegetable for free. Let me show you what dishes we have today~" the shopping guide said as she opened her X membership benefits page.

Hou Yi, president of HEMA, mentioned that the membership system could be used to increase store visits, and the strategy of getting vegetables for free is one of them: if you spend 9.9 yuan offline or 99 yuan online every day, you can get designated vegetables for free. From the thresholds for receiving food set online and offline, we can see that Hema has come up with unique ideas to increase the store visit rate, but it has to be said that this strategy is still very attractive.

After a month of observation, I found that the free dishes are basically the same every day: Hema’s own fresh vegetables, fresh milk and eggs. Although the unit price of these gifts is very low, for customers, especially those living nearby, it is not too cost-effective to go to Hema every night to buy discounted meat (Hema’s fresh meat is discounted after 8 o’clock every day) and get a free side dish. And basically, people always take a walk around after arriving at the store. The longer they stay in the store, the more likely they are to make a purchase.

In addition, two days before I opened my X membership, I received edible eggs that were sold at a price of more than 10 yuan, but I never saw this kind of eggs again afterwards. As a marketer who specializes in studying various routines, I can't help but suspect that this is a routine of Hema!

2. Weekly membership day to increase average order value

Member Day means that when you activate the Hema X membership service, you can freely choose Tuesday or Wednesday as the membership day, and you can enjoy a 12% discount on shopping on that day. On every membership day, Hema will replace the price tags of some products with membership tags and directly calculate the discount for you.

When users pay, the price comparison before and after the discount will be directly displayed on the electronic screen, and you will be told how much money x membership has saved you.

After a month of observation, we found that on Member's Day, sales of fresh fruits and vegetables as well as seafood and food were faster than usual. Even the refrigerators where you can get free food were empty early...

3. Use points to earn cash and improve shopping experience

X members can earn 2 points for every RMB 1 spent. Points cannot be withdrawn, but once 500 points are accumulated, they can be used as cashback when placing an order on the Hema app or in a store. A maximum of 1,000 points, or RMB 10, can be deducted for a single order.

In marketing, emphasis is placed on giving customers the pleasure of timely payment. By setting a lower points threshold and a lower usage threshold, HEMA allows customers to feel the value of points in a timely manner and enjoy real benefits.

At the same time, the points system can also help lock in customer consumption. After all, for the same product, you would definitely prefer to buy it from a place where you can earn points.

4. Set a coupon validity period to create a sense of urgency

The previous paragraph mentioned that members can receive 6 coupons worth 5 yuan per week. These coupons are thoughtfully set with expiration dates and are valid for one week after receipt, further increasing the customer visit rate.

5. Member-only page to highlight privileges

Differentiating members by color is also a common practice for Internet companies. HEMA not only highlights members through black and gold in the app, but also has a black and gold page exclusively for X members in the offline store payment interface.

On the one hand, it makes users feel "distinguished", and on the other hand, it also invisibly creates a buying atmosphere, encouraging onlookers to place orders and become members.

6. Other member benefits

In addition to regular membership benefits, there are also member-exclusive prices, exclusive customer service, etc., and various coupons are given to members from time to time. For example, when swimming crabs were recently launched, we gave exclusive coupons worth 99-10 yuan to X members.

05 Conclusion

Through the analysis of Hema X membership, we realized that whether users can pay to buy membership is a test of the merchant's bait, rhetoric, etc., but whether customers can renew their membership and continue to consume is a test of the products and after-sales service behind it.

We also summarized the routines of Hema X members:

Nowadays, paying for membership is becoming more and more common, and customers are becoming more and more accepting of the form of paid membership. However, whether the membership system can generate value and achieve the purpose of our membership system requires merchants to think and plan carefully.

It is hoped that businesses can provide users with better services and products through continuous practice and research to achieve a "win-win" goal.

Author: Cheng Zhitian

Source WeChat public account: Chengzhi Marketing (yingxiao18)