What:  A review of some initiatives in grocery based on members-only model

Why it is important:  This model allows to create a sense of belonging to a club, enticing customers to significantly increase their purchases.

With the expansion of its membership-driven hypermarket chain, Store X (read more here), Ali Baba paves the way for a new approach, taking its knowledge of members-only schemes to create a sense of exclusivity for its customers, who have to pay USD 40 a year to access the Store X stores.

In these hypermarkets, 40% of the offer (all categories) is sold under private labels, contributing to improving (in the case of Store X) the brand perception of the chain. The members-only scheme allows to address a specific, fast-growing segment of Chinese customers willing to pay more for better services and experience.

Inside Retail mentions that the members-only scheme for grocery stores is not new: Warehouse Club in Singapore opened in 2014, Move opened in 2019 in the US as well. Although the models are different (Warehouse Club focuses on bulk buys, value packs and exclusive brands, and Move on artisan suppliers), they all sell groceries on a members-only model (we also reported other models in our IADS Exclusive here).

Are members only supermarkets the future of retail