A.S. Watson Uses Pandemic Lessons To Craft Future of Retail
- By Sheila Lam
- September 11, 2023
When the pandemic first hit Hong Kong, the local retail market took it hard and fast. The travel restrictions and social distancing measures emptied or shut down many shops almost instantly.
However, some took the opportunity to revamp their digitalization strategies, bringing remarkable and fast rebound this year. International health and beauty retailer A.S. Watson Group is one of those.
The company’s health and beauty segment reported 12% y-o-y growth in sales, according to the 1H 2023 interim results of its parent company, CK Hutchison. A.S. Watson also increased its global presence by adding new markets in the Middle East, expanding its global store network to more than 16,000.
The war for customer smiles
These achievements are attributed to the company’s O+O (Offline plus Online) strategy, according to Andrew Ma, chief technology officer for eLab Asia at A.S. Watson Group.
At the recent SAP NOW Hong Kong conference, Ma said eLab is the company’s in-house digital team, established in 2015 and played a critical role in realizing the O+O strategy.
“We want to put a smile on our customer’s face,” said Ma. “Our O+O strategy is about combining the offline and online channels to create a seamless shopping experience for our customers.”
He added this strategy starts with offering a single and consistent frontend customer journey but extends to integrating different backend processes and systems, including the supply chain, inventory management, payment, logistics, and more.
O+O = unprecedented experiences
With a focus on O+O platform strategy, A.S. Watson was more prepared and able to pivot when the pandemic hit.
“The pandemic has taught us a lot about growth,” said Ma. He noted one of the earlier lessons was the ad hoc mini-site built for mask pre-orders.
In the early period of COVID-19, a limited supply of masks created long lines and panic buying at the stores. Aiming to solve this problem fast, Ma said his team took two weeks to build and launch a mini-site for customers to pre-order masks. In the first 10 minutes it went live, the company recorded 1.5 million visitors—an unprecedented exponential increase in traffic.
Thanks to the O+O platform strategy, Ma added the eLab was able to support many more unprecedented projects during COVID-19. One is the express delivery service, allowing online shoppers to pick up their purchases at selected stores within one hour. This service integrates the front-end customer’s online experience with the back-end store operation and is an actual demonstration of offline plus online strategy.
The project also paved the way for A.S. Watson’s latest contactless shopping experience. It allows customers at the physical store to scan products and settle payments using their mobile app, reducing physical contact and waiting time at the cashier.
To continue enhancing customer experiences at the physical stores, Ma said eLab also developed StyleMe, an augmented reality-powered virtual makeup sampling tool. Available in selected stores across Asia, including the latest one in Kuala Lumpur, StyleMe uses AI to conduct skin tests and color tone analyses, helping customers to sample makeup products without physically applying them. Ma added that the service, developed before COVID-19 and took off during the pandemic for hygiene reasons, remains a unique experience for store visitors.
Tech partners critical to agility
Technology is an important enabler to continuously improve the company’s O+O platform strategy, according to Ma. On top of having an in-house digital agency, eLab, he said many of the O+O initiatives were made possible through the company’s Tech Partners Program.
“In contrast to traditional short-term client-vendor relationships, A.S. Watson’s Tech Partners Programme aims to build long-term partnerships with tech companies, building deeper collaboration, mutual trust, and synergies,” said Ma.
One of these partners is SAP. Ma said SAP Services Cloud supports eLab’s integration of customer interactions across online and offline touchpoints. Such integration centralizes customer information, empowering its customer services representative to provide relevant and consistent messages, promotions, and support.
This long-term relationship means SAP supports A.S. Watson in multiple areas, including a cloud-based solution enabling the company’s agility to handle unforeseen situations.
“We need to be agile in adapting our plans and strategies to the unexpected challenges and seize emerging opportunities,” said Ma.
“With cloud-based infrastructure and services, companies can quickly deploy new features, functionalities, and integrations across their offline and online channels,” added Esmond Tong, managing director at SAP Hong Kong. “With these solutions, A.S. Watson is empowered with the necessary agility and flexibility to quickly react to ad hoc market conditions and meet short-term unforeseeable demands.”
Sheila Lam is the contributing editor of CDOTrends. Covering IT for 20 years as a journalist, she has witnessed the emergence, hype, and maturity of different technologies but is always excited about what's next. You can reach her at [email protected].
Image credit: iStockphoto/supatom