AS Watson eLab to drive US$60 million eCommerce investment

In Q4 of this year, A.S. Watson Group (ASW) will be setting up eLab, a team of 80 digital specialists based in mainland China, Hong Kong, Milan and London, to drive the group's eCommerce strategy across 25 markets in Europe and Asia.

The eLab team will advise the group's brands on digital marketing and eCommerce strategy across health and beauty, luxury perfumeries and cosmetics, food, electronics, wine and beverages sectors that it operates in.

It is a new group-level business unit created on top of existing country-specific digital marketing and eCommerce teams, acting as a back-end consultancy which will also maintain a technology platform that will power the group's e-stores across the 25 markets.

Including its investment in this technology platform, the group will spend over US$60 million over the next three years to accelerate its CRM and digital marketing strategy.

Following the establishment of eLab, the group hopes to achieve over 50% year-on-year growth in eCommerce sales, with the aim of having eCommerce account for 5% of total sales in the future.

"The establishment of eLab is a strategic move on the part of ASW to strengthen our differentiation through quicker time-to-market digital engagement initiatives and better eCommerce experiences for our customers," Malina Ngai, COO at A.S. Watson, said.

As with any major launch of eCommerce initiatives, the question is: what will be the impact on sales in existing offline retail stores?

Ngai said, "We are closely monitoring customer behaviour and its potential impact to our core retail business.  Our latest market research findings show that customers who shop with us both in-store and online tend to spend more than customers who only shop offline."

"We see eCommerce as complementary to our retail network as it provides a mobile touch point for customers to browse through our offerings and make a purchase anywhere, any time."

She cites a recent online survey answered by 143,000 of the group's loyalty club members in 10 Asian and European markets where 71% of respondents prefer to shop in-store.  28% were likely to shop either in-store or online.

Majority of the products that will be offered in the upcoming e-stores will be the same as that featured in the group's physical retail stores, with some online-only product ranges.

Out of the 80 people comprising eLab, 20 will be part of a centralised pool of experts in marketing, design and content to be based in London.

Within eLab, a team known as eStudio will serve as a creative hub to deliver content, designs and enhanced digital marketing.

The locations of the eLab team members were chosen based on their proximity to the group's head office in Hong Kong and satellite offices, as well as the ease with which digital talent can be found.