A.S. Watson looks to accelerate O+O retail capabilities

A.S. Watson Group is planning to integrate physical retail with online and digital experiences to provide online and offline (O+O) choices for customers, to facilitate human connections between the brand and consumers. According to the recent interim results of CK Hutchison, parent company of A.S. Watson, the firm has reported a 22% increase in revenue in its Asia operation and 13% in Europe.

Since 2012, A.S. Watson Group has been driving its digital transformation with anticipation of evolving customer needs in shopping for health and beauty products. Besides investment in digital technology, retail systems and automation, big data, cloud technology and cyber security, the transformation in building O+O retail supply chain pays off during the pandemic, according to the statement. 

Looking ahead, online retailing will continue to stay as the company's part of customers’ shopping habit. At the same time, the pandemic underlines the desire among customers for human connection. The company said that physical retail must evolve to serve customers with human touch, friendly services, and interactive experiences of products; while fully integrated with online and relevant digital experiences to provide relevant O+O choice for customers.

Malina Ngai, CEO of A.S. Watson (Asia & Europe), said, “There is no instruction manual for how to lead at a time like the COVID-19 pandemic. We are fortunate that what we believe in - loving our people and customers, and the offline and online (O+O) platform strategy we have been building - plays its most critical role during the crisis.”

Ngai added, “Supply chain is the backbone for us to deliver seamless O+O customer experience. During the pandemic, we were able to quickly adjust our global operations to handle the surge of online orders through activating fulfilment in over 50%, and pick-up in almost 100% of our 16,000 physical stores network, multiple delivery options with 30-minute delivery being the fastest standard.”

“We do not have a crystal ball on a crisis outbreak like the pandemic. But we had a vision a decade ago to build our business into an integrated O+O platform to serve our customers hence we know we need to create a customer-centric supply chain network. We now have a network of close to 90 main warehouses and invested over US$400m in the past decade to transform planning and demand forecasting tools, capabilities in real-time inventory visibility, improving supply chain productivity and capacities. It enables our agility to operate and pays off during the challenging pandemic period to keep us in business in a competitive way,” she said.

Ngai added that feedback on A.Ss Watson's O+O experience has improved from 87 to 90.5 out of 100 in the last three years. "Last year alone we received over four million responses from customers who shopped with us offline and online. Over 60% of them rated us 100. We have added Customer Love Score as a KPI in all businesses to reinforce our company purpose to put a smile on our customers’ faces today and tomorrow," Ngai said.

“Our focus on further strengthening the O+O platform strategy at A.S. Watson stays solid in the very volatile and complex world. We will further accelerate our supply chain transformation to support our growth, specifically in warehousing capacity and automation technologies, last mile delivery experience, AI in inventory management and demand forecasting. And we are keen to build international partnerships with companies who have expert experience, products and solutions in supply chain.”

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