A.S. Watson Group sets new standard for retail with O+O approach

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Brands and marketers have been finding ways to innovate and offer advanced experiences for customers. In an industry event, A.S. Watson Group & CEO of A.S. Watson (Asia & Europe) Malina Ngai explained the idea of offline plus online (O+O), which has become the new standard for retail and is shaping the future.

As modern customer journeys often include both online and offline channels, the O+O strategy, according to Ngai, is the core business strategy of A.S. Watson Group and more about creating an integrated experience to better serve customers’ needs that enables them to shop across different channels without the limit of locations and time. Traditionally, the strategy of O2O (online to offline or offline to online) drives customers from one channel to another, but the O+O strategy contains an ecosystem that is powered by technology, big data and AI.

malina ngai group coo of a.s. watson group ceo of a.s. watson asia europe Ngai then used the business of the A.S. Watson Group to explain the strengths of this strategy and how to use O+O to create values. "To be able to deliver O+O with excellence, it's a combination of our extensive physical store network, consisting of 16,000 physical stores, as core touchpoints. It’s an organisation cultural change when it comes to managing the business and prioritisation" she said.

The O+O strategy may spark concern over cannibalisation in customers' spending in physical stores. However, the company's figures have shown that O+O customer spends three times higher than their instore-only counterparts. Ngai said this phenomenon can be attributed to creating a bigger share of wallet and higher customer lifetime value.

The group's physical stores are connected to digital platforms, while members are digitally connected with social media and digital platforms and they can shop online not only on A.S. Watson’s mobile apps and websites, but also via WeChat, WhatsApp, and phone. With 100 e-commerce platforms in 27 markets in Asia and Europe, the company can set out to leverage of the potential the O+O strategy.

For example, in Watsons China, customers can seek personalised advice from in-store beauty advisors via Enterprise WeChat and enjoy one-to-one customer service. The advisor can recommend personalised offers with the help of an AI engine, help order the products from its cloud service MyStore - WeChat platform tailored for Watsons - and customers can receive product delivery within one hour.

As for O+O payment options, the company allows customers to buy in-store via payment on the mobile app. First launched in Watsons China, it’s now available in Watsons Hong Kong and Singapore.

Looking ahead, Ngai said converting more customers to O+O members will be A.S. Watson Group's core growth strategy in 2021 and beyond. “Physical stores will continue to play a significant role in creating our unique O+O experience. While some companies decide to disinvest in stores, we plan to open 1,000 new stores this year. Retail is not dead; it just needs to be better for our customers," she concluded.