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This article is full of high energy and reveals the wealth code of how retail and brands truly generate profits.

We must first switch to a pure consumer perspective to think about the problem.

Do you save certain shopping bags and recycle them for brand reasons? Would you feel proud that you use a niche, high-end or luxury brand? Do you feel inferior because the bag used by the person you are dating is more high-end than yours? Do you feel more energized because you have an extra object? Do you feel different because of certain lifestyle habits, such as insisting on shopping at a membership-based offline supermarket or drinking a cup of cold brew coffee every morning?

I believe the vast majority of people would. This is normal, it's how humans are.

In fact, after the industrial revolution in Europe and North America was fully completed, the main task of merchants was to make their products and services have some kind of added value, that is, a sense of superiority . Because productivity has increased significantly, a large number of people have solved basic needs such as food and clothing, and these people are constantly looking for new ways to show their differences.

If we say that a bottle of Coke sells for 3 yuan, the first sip is worth 2.5 yuan, and this 2.5 yuan is a kind of physical satisfaction; then a piece of Patek Philippe sells for 300,000 yuan, and the psychological satisfaction and sense of honor is 299,000 yuan. It seems as if the time you are looking at can see through five thousand years.

If you buy a Dyson bladeless fan or hair dryer, then every breeze is filled with your yearning for life, and it seems that the wind is no longer wind, but a ray of light.

02. Moutai and Tesla

If Patek Philippe is not representative, then you absolutely cannot ignore the success of Moutai and Tesla. Their paths to success were different, but in the end they all formed a differentiated identity, consciously or unconsciously.

Decades ago, China's largest winery was Fenjiu, and Moutai was still a little brother at that time. But today, Moutai has formed a unique and beautiful landscape with its unique brewing and blending process of sauce-flavored liquor + limited production + price anchoring + almost certain price increase trend + countless historical and celebrity endorsements + circle effect.

The formation of Tesla's brand assets is unique and almost different from the approach of the entire automotive industry.

In the past, it was almost unquestionable that a car worth half a million yuan could not hold its head up in front of a car worth one million yuan. Although luxury cars have different focuses, for example, BMW focuses on driving and Mercedes-Benz focuses on the boss circle, the price is always determined by seniority.

Ever since Tesla came out, it seems that a car costing three or five hundred thousand yuan can be looked down upon as long as it is not a luxury car. Because spiritually I seem to be blessed by "adventure" and "future". Those who drive them seem to be the trendsetters of the times, just like Musk.

Tesla's focus is on its sense of technology and the future, its research into high-end technology, and its pursuit of quality. Driving it symbolizes not only money, but also a kind of life belief and value choice. Musk's personal charm also creates added value for Tesla. Fans feel that this is the transportation of the future and is the best.

(SPACE X has given Musk an extra layer of personal charm and also benefited Tesla)

It can be seen that this kind of recognition between groups eventually formed a chain of contempt. This feeling is the result of the combined influence of multiple factors, which brings consumers a unique circle of pleasure. It is the recognition of many different labels such as a certain lifestyle, age, class, education level, etc.

Because of identification, people with the same values ​​come together. However, recognition is inevitably accompanied by disagreement, so people who hold other values ​​will also be rejected. In this process, if the brand resonates with any of the links, it will become a label that highlights the identity of the group and a point of excitement for this group, thereby greatly increasing consumer stickiness.

For example, no one will feel unhappy if someone gives you a bottle of Moutai, even if he doesn’t like drinking.

This is because the brand potential is strong enough. At the same time, the brand will enter a virtuous circle and continue to attract more people who hold the same values ​​to consume.

03. Supermarkets also have a chain of contempt

So, the question is: Are only consumer brands able to create this feeling?

Answer: No. Channel brands are also acceptable.

Buying the same thing from different places can also create a cool circle. Buying a bottle of water at a street shop and at the airport are completely different feelings. For example, if you buy a bottle of Evian mineral water outside the Yiwu Small Commodity Market, most people will say it is not worth it and that you are being cheated. However, if you buy a bottle of Evian while visiting Disneyland, it seems normal and worthwhile. When you spend the same amount of money in different consumption scenarios, the sense of matching in your mind will also be different.

As for buying groceries, it seems that going to a supermarket to buy groceries is more high-end than going to a vegetable market, and going to a membership-based supermarket is more high-end than going to a big chain store.

Even though the vegetables in the wet market may be cheaper, many people prefer supermarkets with better environment; even though ordinary supermarkets are closer to home, many people prefer to go to membership supermarkets with stricter quality, more top-notch products and better service experience; however, even in membership supermarkets, there are some that are so smoky that you can't park your car, for example, you have to squeeze together with aunties who are fighting over pork, scalpers who are selling Maotai, and uncles and aunties who are drilling through the shutters to compete for discounted goods...

Behind every objective phenomenon, there is a set of logic that can be explored and concepts that can be explored in depth. As long as we can summarize the concepts and logic behind this phenomenon, business opportunities will be created.

How can channel brands like supermarkets create a refreshing atmosphere among their circles?

Think about a question first. What do you think of when you mention supermarkets?

Shopping, service, excitement...

This is the impression many consumers have of supermarkets, and it is also what many supermarket companies believe to be consumer demand. In order to meet these demands, many supermarkets will try to provide more categories for consumers to choose from, better services to make consumers feel attentive, and louder music to create a lively atmosphere. But there are actually other options. For example, Sam's Club, which has been rooted for a long time and is popular in Shanghai, has chosen a different approach from most supermarkets.

All shopping carts in Sam's Club look like this.

You will find that it has two obvious differences from other common trolleys: the first is that it has two child seats, which can accommodate two children at the same time, or one seat for the child and the other seat for a bag or other sundries; the other difference is that their carts are very wide but not very deep, which means that while being able to hold the same or even more goods, it reduces the possibility of bending over and the possibility of goods being piled up and squeezed.

The size of the trolley has changed, making the shopping process more comfortable, but it also means that wider aisles are needed to accommodate it.

So this is what the aisles at Sam’s Club look like.

(Sam's aisles are about 3 meters wide, while most supermarkets are no more than 2 meters wide)

At the same time, Sam's Club has only two layers of shelves, the highest of which does not exceed 180cm, and above that are storage cabinets. It won't make you feel like you're not tall enough, or that you're fat, or that you're caught in a crowded, noisy environment with carts bumping and dodging each other.

It costs a huge amount to create such unique and refreshing little details. For supermarkets whose core demand is grocery shopping, most of them would not do this. It would be better to give more discounts or carry more categories with this cost. But Sam's Club did it anyway.

The advantage of doing this is that it is very easy for consumers to form a sense of identity: I am different, I am respected, and I feel good.

The entire layout, services and even product design of Sam's Club are quite different from those of conventional supermarkets. For example, there is no promotional music, nor are there shopping guides repeatedly emphasizing that you can get one free on buy-two-get-one-free laundry detergent. In fact, most consumers are shopping quietly, and few people are chatting loudly about family matters.

Another detail is that the duplication of their SKUs is very low. In the supermarket industry where increasing SKUs is a selling point, this approach is basically going against the trend.

Many products in the store only have one or two varieties. For example, there may be only two varieties of pork belly: one with skin removed and one without. The weight of each portion, the size of the meat, and the fattiness of the meat are basically the same. Do you think you are here to pick meat? No, their professionals have already selected it for you. This is the best one. You don’t have to choose, and you don’t have much chance to choose.

Helping consumers make decisions is the ultimate goal of most companies and brands, but few companies dare to actually do so because the risks are too great. If they are not careful, it is easy for consumers to point their fingers at them and say, "Who do you think you are? I want you to make a decision for me?"

But Sam's Club did this, and it did not cause any complaints from consumers, because they used strict quality control to truly prove that "the things I picked out for you are really good."

Sam's watermelon, any watermelon, not only is the size and shape basically the same, but the taste is almost the same as the best watermelon you have ever bought; a box of 4 tomatoes at Sam's must be the same size, there will not be 3 big and 1 small, 2 big and 2 small, etc.; Sam's steaks are basically the same in taste, size, texture, thickness, so you don't have to worry about choosing the wrong one;

Some netizens even lamented on Zhihu: Sam's cucumbers are all the same size, how does he do that?

This Virgo, obsessive-compulsive way of playing releases the "lazy" nature of young people and middle-class families, and at the same time, creates a unique pleasure point - I don't have to pick and choose, I can buy good things that others have to spend a lot of time and effort to choose.

In fact, from this we can see that when everyone thinks that consumers' needs are to buy groceries and the pleasure of choosing, Sam does not think so. He provides consumers with an extremely comfortable shopping environment, a good shopping experience and a selection of product categories, allowing consumers to have a unique sense of pleasure.

It’s like many big headphone manufacturers thought that consumers’ demand for headphones is sound quality. They spent a lot of effort on the sound quality of headphones, but were instantly eclipsed by the extremely simple and portable AirPods. The stylish appearance and comfortable user experience brought by its extreme portability have made many consumers loyal fans of AirPods, and some even developed a sense of pride and identity that they would only buy AirPods.

The success of AirPods, in a sense, is Apple's deeper insight into consumer needs. The needs that are generally believed to be true are not necessarily the deepest and most real needs.

The same is true for supermarkets. Perhaps the needs that everyone generally believes in are not necessarily the deepest and most real needs. Not to mention that while Sam's Club sets the threshold, it also makes consumers feel that it is "worth it" through product and price settings.

If you want to go shopping at Sam's Club, you must first apply for a membership card for 260 yuan. This is both a threshold and an important source of consumers' unique sense of luxury.

Sam's Club has many exclusive supply chains. For example, Sam's own brand Member's Mark (MM) is of extremely high quality and very attractively priced. The popular MM mochi, MM mountain black pork, etc. are only available at Sam's Club. Will you apply for a card or not?

For some non-exclusive products, Sam's Club chooses better prices. For example, Penfolds, Suntory whiskey, and Godiva chocolate have all achieved the goal of earning back the membership fee by buying two bottles of wine or a box of chocolates. In this case, will you apply for a card or not?

Through the environment, service, product selection and value, consumers can feel that shopping in a supermarket is not just about buying vegetables, grabbing eggs and choosing meat, but can even be as comfortable, pleasant and enjoyable as shopping in a high-end shopping mall, thus creating a refreshing point in the circle.

In a sense, this is wrong-dimensional competition. You think it is a razor, but it is actually a hair dryer; you think it is a hair dryer, but it is actually a razor.

It’s like you think Haidilao sells hotpot, but actually, it sells services. You think Sam sells vegetables, but actually he sells experience and value.

Take-out food is popular, but the instant noodles business is not so good; shared bicycles are popular, but the three-wheeled motorcycle business near the subway is gone.

The fact is just like AirPods. This practice that is in line with the deepest insights of consumers will become mainstream as society and the market develop. Apple's AirPods has a market share of 60% in true wireless headphones, and Haidilao has become the company with the highest market value in China's catering industry. They have all become mainstream in the absolute sense.

04. Future business model

Moutai has replaced the "number one bank in the universe" to become the stabilizer of the A-share market. Tesla surpasses Toyota to become the world's most valuable car company.

Even in a poor economic environment, some companies can still turn things around and master the code to wealth. For example, Sam's Club, which often sells out, has countless members renewing their memberships and continues to accelerate the opening of new stores. According to their plan, by the end of 2022, Sam's will have 40-45 stores opened and under construction.

Recently, in order to write this article, I talked about Sam's Club with many friends around me. During the conversation, I found out that many people around me have been members of Sam's Club for 3 to 5 years and are familiar with all the products there. The common characteristics of these people are very obvious. They are all middle-class people who pay attention to life, cherish time and enjoy life.

These brands that can create a refreshing atmosphere in their circle have good and stable business.

(The collaboration between DIOR and AJ helps people in the fashion circle transition to the luxury circle)

Between traffic business and retention life, Sam's Club chose to move forward. Quality and service are becoming more and more "obsessive-compulsive", with more and more strict attention to details and quality control. Stores are gradually penetrating from first-tier cities to quasi-first-tier, second-tier, and third-tier cities.

This is the difference between flow and retention.

For low-end consumer goods, consumers rarely have loyalty. Unless your brand can truly dominate the market on price for a long time through advantages in supply chain, logistics, platform channels, etc., basically any brand with a lower price or higher exposure will replace you.

Businesses that move up the market have stricter control over quality and experience, and have higher consumer recognition and stronger stickiness.

(What Jobs brought to Apple was strict philosophy, not technological innovation)

It is worth emphasizing again here: there is no high or low between businesses. Being an upstream high-end brand is not superior to being a low-end brand. Conversely, companies rooted in small towns are by no means more humble than those originating from Beijing, Shanghai, Guangzhou or even developed countries.

The market can extend downward infinitely, letting its roots take root in every corner of the country and even the world, whether it is a first-tier city or an eighteen-tier city. As long as any aspect such as price, quality, service, and environment is done to the extreme, consumers will vote with their feet. Extremely low prices, extremely cost-effectiveness, extremely good services, and extremely good environment, staggering the conventional competition dimensions, creating exciting points in the circle, and opening up another battlefield, all of which may transform the brand from "traffic" to "retention."

No one would complain that a product is too famous, no one would complain that a car is too cool, no one would complain that a shopping mall is too clean, the service is too good, or the price-performance ratio is too high. That’s why Moutai, Tesla, Apple, and Sam’s Club can achieve all-round success.

This is the reason why there is a big business hidden in the chain of contempt.