How to achieve a win-win situation in playing the membership and fan economy and engaging in interactive entertainment marketing with big IPs?

With the intense and saturated market competition, global brands and retail businesses are simultaneously facing new commercial challenges and opportunities.

Membership (fan) economy and big IP entertainment marketing, as currently popular brand management strategies, are gradually becoming the new battleground for global brands and retail enterprises. Whether it's shopping centers, department stores, supermarkets, convenience stores, e-commerce platforms, or brand owners, they all need to continuously innovate and optimize membership services to attract and retain key membership (or fan) consumer groups.

Moreover, by leveraging digital and intelligent technologies such as AI to deeply analyze and mine membership and fan data, enabling precision marketing and personalized services, is also crucial in enhancing business competitiveness and market share.

As an article in the series on "Retail Innovation from the Perspective of Sustainable Business Model Development," this article aims to analyze the next steps for global brands and retail businesses. Global cases like 7-ELEVEn's OPENPOINT retail ecosystem management, Taipei Breeze's "Breeze Night" (the originator of VIP member-exclusive events), and Far Eastern Department Stores' Happy GO provide valuable experience sharing and future industry predictions for retail practitioners, entrepreneurs, brand owners, franchisees, and investors.

01 How can convenience stores leverage membership economy to create a retail ecosystem centered around everyday life?

Mining and leveraging the membership economy is one of the growth curves that convenience store brands continuously strive for.

In the membership economy, businesses can attract consumers to become members through points, discounts, member-exclusive events, and other means, establishing long-term and stable consumer relationships. Meanwhile, through data analysis and mining, businesses can better understand consumers' shopping behaviors and preferences, providing more personalized products and services, enhancing the shopping experience and satisfaction of consumers, and thereby strengthening their loyalty and stickiness.

From a performance perspective, seizing the membership economy can not only increase sales and profits but also enhance brand influence and competitiveness. By continuously optimizing membership systems and upgrading service quality, businesses can broaden their membership base while building closer consumption and interaction relationships, standing out among fierce market competition in the dimension of "people."

Focusing on Taiwan 7-ELEVEn's membership strategy, the company has constructed a retail membership ecosystem centered around everyday life by establishing the OPEN POINT membership system in Taiwan.

This ecosystem encompasses various aspects of daily life, including clothing, food, housing, transportation, and entertainment, and provides members with abundant benefits and privileges through cross-industry and cross-channel collaborations. Taiwan 7-ELEVEn members can also redeem points for various products and services, including electronic gift vouchers from Carrefour Taiwan (under the Uni-President Group), coupons for yoxi ride-hailing services, and free shipping vouchers from iOPEN Mall. Additionally, 7-ELEVEn collaborates with cross-industry partners like Klook and Hahow to offer designated double-points promotions, further enhancing member stickiness and loyalty.

Image: Taiwan 7-ELEVEn

In terms of digitization, 7-ELEVEn has pioneered digital business opportunities exceeding NT$4.5 billion through the introduction of OPEN POINT's icash2.0 service. This service not only provides a convenient one-click card binding function but also encourages members to enjoy bank and credit card discounts and additional OPEN POINT rewards through three major payment tools.

Furthermore, 7-ELEVEn attracts over 8 million members in Taiwan to collect products from nearby stores each month by introducing innovative practices such as diverse shared products and popular product combinations.

Image: Taiwan 7-ELEVEn Membership Services

Regarding membership contributions, 7-ELEVEn's membership contributions have grown by double digits annually, with OPEN POINT membership spending exceeding NT$100 billion for the first time in 2023. This achievement not only demonstrates 7-ELEVEn's strong appeal in the Taiwanese market but also reflects the success of its membership system and the vitality of its membership ecosystem.

Similarly, Taiwan FamilyMart also officially branded its points system in 2023.

According to the author's understanding, Taiwan FamilyMart currently has 17.5 million members. By introducing the "Fa Points" system, the brand has enhanced its recognition. Additionally, Taiwan FamilyMart has launched convenient features such as using points to offset utility bills, further enhancing the practical value of its points system.

02 Exclusive activities and membership tiers for shopping centers and department stores

Focusing on shopping centers and department stores, the membership operation strategies of two major enterprises are worth exploring.

Taipei Breeze Plaza's "Breeze Night VIP Member-Exclusive Event" is an innovative attempt in the VIP/VIC membership economy.

Image: Breeze Plaza

Originating in 2004, this event aims to provide a more intimate and exclusive experience for VIP members, featuring fashion feasts, celebrity gatherings, exquisite cuisine, and beverages, attracting numerous high-net-worth individuals. It has become a landmark event for in-depth interaction and shared prestigious experiences between brands and members within the mall.

Image: Breeze Night Series of Events

With years of development, the 2023 Breeze Night event became more diversified and international, adding international food festivals, fashion trend forums, and other segments to the traditional shopping and entertainment programs, allowing members to indulge in a feast of shopping, food, and culture in a single night.

Image: Breeze Night Marketing Promotion

Simultaneously, the 2023 Breeze Night leveraged the power of social media, engaging more VIPs (VIC) through online live streams and interactive games.

First, by launching the Far Eastern Department Stores App 3.0 version, a new membership tier system was introduced. New functions such as product redemption and consumption record inquiries within the app effectively increased customer engagement with information, enabling customers to manage their accounts more conveniently, thereby enhancing their loyalty and sense of belonging to the brand.

Image: Taiwan Far Eastern Department Stores Happy GO

Furthermore, Far Eastern Department Stores Happy GO leverages consumer data, integrating information from the Far Eastern Department Stores App, subsidiaries of the Far Eastern Group, and cross-platform social media platforms to drive membership management and segmented marketing. This approach not only enhances the precision of marketing strategies but also generates higher market returns for the enterprise.

It can be said that the successful practice of Taiwan Far Eastern Department Stores Happy GO in the membership economy has not only improved member loyalty and satisfaction but also laid a solid foundation for the company's long-term development.

Image: Taiwan FamilyMart Membership

To enhance member stickiness, Taiwan FamilyMart continuously innovates its membership services, such as being the first to implement cross-store pickup through its app and scheduled package pickup. It also partners with the insurance e-commerce platform Yian to provide convenient insurance services for members. These measures effectively improve member satisfaction and stabilize membership revenue contributions at 50% of overall performance, generating considerable earnings for Taiwan FamilyMart.

03 Outlet malls: A dual approach of digitization and tourism

China's outlet mall market has experienced rapid growth in recent years. According to the "2022-2023 China Outlet Mall Industry White Paper," the sales growth rate of China's outlet mall industry reached 8% in 2022, higher than other retail formats. There are currently over 200 operational outlet mall projects nationwide, with sales of approximately RMB 210 billion.

Moreover, China's outlet mall industry is still in a rapid development phase over the next three years, with enormous growth potential. Both new entrants and existing players need to formulate appropriate strategies based on market conditions and consumer demand while continuously innovating and optimizing their services.

In this market context, both new players and existing players must closely monitor market conditions and consumer demand to formulate and adjust strategies accordingly. In particular, the innovation and optimization of outlet mall membership economies have become keywords in the industry.

Taiwan's MITSUI OUTLET PARK, a subsidiary of Japan's Mitsui Group, has established three stores across northern, central, and southern Taiwan. Starting in 2023, it integrated its APP with the LaLaport APP, attracting approximately 680,000 APP members and effectively enhancing member shopping stickiness.

Image: Taiwan MITSUI OUTLET PARK

Taiwan Huatai Outlet Mall

Although outlet malls primarily generate revenue from tourist shopping, the contribution of members cannot be overlooked. In Taiwan, Huatai Outlet Mall, located near Taoyuan High-Speed Rail Station, boasts a remarkable 50% membership contribution rate, unique in the industry.

Image: Huatai Outlet Mall

Huatai Outlet Mall's ability to attract and retain such a large membership base is primarily attributed to its comprehensive range of outlet brands and deep engagement in the membership economy. Even during the pandemic, when facing entry restrictions and a lack of international tourist sources, local membership contributions remained robust, further emphasizing the importance of the membership economy.

04 Hotel + High-end Retail Commercialization: Six Initiatives for Innovative Services

Taking the Regent Galleria at The Regent Taipei as an example, the following initiatives were undertaken to tap into the membership economy:

First, integration of membership benefits.

Regent Galleria integrated hotel accommodation with high-end retail membership benefits, ensuring that members receive points, discounts, and other privileges whether they are staying at the hotel or shopping at the retail stores. This integrated membership benefit design enhances user loyalty by eliminating the need for members to switch between different merchants.

Second, unique membership activities.

Regent Galleria regularly plans exclusive activities for members, such as fashion shows, product launches, art exhibitions, etc. These events, which combine the characteristics of high-end retail and hotel services, provide members with unique experiences while strengthening their emotional connection with the brand.

Image: The Regent Taipei

Third, customized services.

Based on members' personal preferences and historical consumption records, Regent Galleria provides customized services, such as recommending suitable room types, dining options, and retail products. This personalized service not only improves member satisfaction but also increases the likelihood of them choosing Regent Galleria again.

Image: Fine Dining at The Regent Taipei

Fourth, member referral programs.

To expand its membership base, Regent Galleria implements a member referral program. Existing members can invite friends and family to join, with both the referring member and the new member receiving additional points or coupon rewards. This program not only reduces member acquisition costs but also increases interaction among members.

Fifth, data analysis and precision marketing.

Regent Galleria leverages data analytics tools to gain insights into members' consumption behaviors and preferences, enabling precise marketing campaigns. For example, personalized discount information and product recommendations are pushed to members via email or SMS, enhancing the relevance and effectiveness of marketing activities.

Sixth, cross-industry collaboration and resource integration.

To provide richer and more diverse services, Regent Galleria at The Regent Taipei actively collaborates with other high-end brands or institutions. For instance, it partners with renowned designers to launch limited-edition products and collaborates with high-end restaurants to offer unique dining experiences. These collaborations not only increase member stickiness but also enhance brand recognition and influence, successfully leveraging the membership economy within the framework of "Hotel + High-end Retail Commercialization." These initiatives not only improve member loyalty and satisfaction but also create more business opportunities, revenue, and brand economic value for the hotel.

And EBC's subsidiary includes ETSUN Pet Cloud, which adopts diversified innovative strategies and tactics in the areas of playing with membership economy, self-operated brand building, global supply chain development cooperation, and operation management:

First, membership economy strategy. EBC attracts users to register as members by providing rich membership benefits and promotional activities. For example, members can enjoy exclusive content, priority ticket purchase, discounts, etc. At the same time, EBC also increases member stickiness and loyalty through reward points systems and membership levels.

Second, self-operated brand building. EBC actively launches self-operated brands covering news, variety shows, sports, children's programs, pets, and other fields. By strictly controlling content quality and user experience, EBC's self-operated brands have gained a good reputation and influence in the market. In addition, EBC promotes its self-operated brand products and services through online and offline integration.

Image: ETSUN Pet Series

Third, global supply chain development and cooperation. EBC actively seeks cooperation with global outstanding content providers, production companies, etc., to introduce more high-quality programs and resources. At the same time, EBC expands its global supply chain and enhances its competitiveness by participating in international film and television festivals and exhibitions and carrying out cross-border cooperation.

Fourth, innovative operation and management. EBC continuously explores new operation and management models and methods to adapt to market changes and user needs. For example, by introducing advanced technologies such as big data and AI, EBC optimizes content recommendation algorithms and improves user experience. By diversifying businesses and expanding revenue sources, EBC enhances its profitability and risk resistance.

Conclusion

The next step in the development of the global retail industry is to deepen the membership (fan) economy and combine it with interactive promotion and content marketing of big IP entertainment. This strategy combines special collaborations between brand ambassadors and entertainment events (such as concert tours) to attract and maintain long-term interest and loyalty from members (fans). From shopping malls, department stores, supermarkets to e-commerce platforms and brand owners, major retail giants are competing to layout in an attempt to solidify their market position and seek new growth points through the membership (fan) economy.

In the future, the importance of creating economic value for key customers (members or fans) will far exceed mass production, especially in the business field. According to the 80/20 rule, approximately 20% of members (such as VIP or VIC customers) will contribute 80% of economic value.

As the market gradually saturates and competition intensifies, competing in the membership (fan) economy emphasizes the importance of focusing on member (fan) customers and providing exceptional services and unique or limited-edition customized products. By observing retail brands across different formats, it is evident that key customers such as members create tremendous value.

Currently, the domestic retail industry is experiencing a decline in the demographic dividend and market saturation. Shopping malls, retailers, and brand owners should shift their focus to the membership economy. Retail enterprises should strive to provide personalized and refined services to meet and analyze the needs of these valuable customers, turning them into assets for business growth and sustainable development (Apple fans, or 'Appleheads,' are a prime example).

Drawing on the successful experience of global retail giants such as Costco, Sam's Club, and IKEA in long-term membership marketing, retailers can build a loyal membership base and platform economy by leveraging refined membership management and personalized services. Simultaneously, actively developing self-operated brands, integrating global supply chain resources, and maximizing the value of both brands and retail channels are crucial for the sustainable development of chain retail enterprises.