As a globally renowned health and beauty product retailer, Watsons leverages its offline plus online (O+O) platform strategy to achieve high engagement with customers. With 4000 physical stores and multiple channels online, such as the Watsons Mini Program, Weixin communities, WeCom for beauty advisors (BAs), Weixin service accounts, and Weixin channels, Watsons has created a seamless offline and online shopping experience that has reshaped its relationships with customers.
Building on its O+O platform strategy, Watsons launched its OPTIMO Brand Centre, which provides inbound brands with various digital tools to better screen and reach their target customers and provide shoppers with recommendations for high-quality products and services.
With approximately 4,000 stores and over 60 million members across 500 cities in the Chinese mainland, Watsons is a leading retailer of health and beauty products both online and offline. In February 2020, Watsons launched its Mini Program, which marked an acceleration in the company's exploration of omnichannel integration and development.
As internet technologies continue to evolve, the trend of combining offline and online shopping has become increasingly evident. For consumers today, it's common to browse a store offline and make a purchase online. For Watsons, which already has obvious advantages offline, the major challenge has been linking together its offline and online channels to bring a seamless shopping experience to young shoppers.
With an increasing focus on driving private traffic, many brands are attempting to launch new direct-to-consumer business models. In this new era, the major questions are how retailers can find new positioning to stay competitive and adjust their business models to continue providing diverse value for their brands.
Faced with a rapidly changing consumer environment, Watsons makes full use of the power of the Weixin ecosystem to achieve full-channel connectivity, provide a modern shopping experience, and enhance its relationship with customers, as well as accumulate user insights and find new ways to increase its value.
Watsons has implemented an innovative O+O retail model, which provides shoppers with an enjoyable shopping experience at its physical stores while also taking advantage of the Weixin ecosystem to reach consumers online. This approach has allowed Watsons to build a digital ecosystem that seamlessly combines the advantages of online and offline shopping.
In 2018, Watsons began accelerating its digital transformation, expanding its customer base both offline and online, and implementing the O+O platform strategy. By integrating its physical stores with its growing online presence, Watsons has continued to attract shoppers to its owned sales channels.
Watsons' cloud store Mini-Program is a key component of the company's O+O platform strategy, serving as a hub to offer services to customers. These include tangible services such as spa treatments, skin care, and makeovers that can be experienced in-store, as well as informational services that provide Watsons with valuable insights into consumer preferences for products, allowing the company to offer targeted promotions and activities.
Since its launch, the Mini Program has accumulated traffic from about 4,000 stores and online channels across the country. Shoppers can participate in limited-time flash sales, members can enjoy special pricing, and customers can place their orders online and pick up their purchase at a nearby store or have it delivered to their home within 30 minutes. They can also make an appointment online for in-store services.
Watsons also uses the Mini Program to provide rich social interaction features for young shoppers. For example, special areas are set up where customers can receive recommendations, try out new products, and make purchases, creating a two-way connection between brands and consumers. For Watsons, the Mini Program is not just an online store but also a way to inspire and interact with its customers.
Watsons has also created virtual idols and offered virtual pet cats based on the interests of young people and is constantly looking for ways to provide new value with its Mini Program and create a more exciting and interactive space for young shoppers.
The goal of Watsons' beauty advisors (BAs) is to establish friendly and trustworthy relationships with customers. To achieve this, Watsons provides its BAs with professional digital tools like WeCom, which enables them to give one-on-one online consultations even after a customer leaves the store. Watsons also uses WeCom to send personalized messages, birthday offers, and membership activities to customers, who can click a link in the message to directly open the Mini Program.
With WeCom, BAs are no longer limited to only communicating with customers in the store. Instead, they can build longer-lasting relationships with customers, transforming their roles from short-term salespeople to long-term companions.
Currently, Watsons has over 40,000 BAs who have used WeCom to connect with more than 43 million shoppers, almost half of whom have gone on to make a purchase. Data shows that members who added their BA's WeCom account spent 3.8 times more and made purchases about 3 times more frequently than those who hadn't added it during the same period.
Furthermore, BAs actively invite shoppers to join relevant communities, where they can receive daily promotions and discounts on products. Currently, Watsons has over 60,000 communities for different interests and even VIP communities, with total users numbering in the millions.
In terms of community operations, Watsons has launched "28-day check-in" activities to connect, inform, and encourage users. One such activity for the Move Free brand was created to spread awareness of joint health to community users online, with health promotions also being held in stores. This helped the brand reach out to new customers and increase sales both online and offline.
Watsons stores across the country serve as natural gateways for offline traffic. In the store, BAs actively add customers' Weixin accounts to help guide that traffic to Watsons' online channels. Shoppers can also scan the QR code displayed in every store to quickly access Watsons' Mini Program. In addition to driving traffic to its owned sales channels, Watsons also advertises on public platforms such as Weixin and iQIYI, where it can drive huge levels of traffic back to its own private channels.
Watsons makes the most of this vast private traffic by tailoring its strategies for each touchpoint, helping it to increase new and repeat sales. For example, Watsons provides a section on its Mini Program homepage where existing members can create their own groups, invite new members, and receive discounts that can be enjoyed by all members in the group. This type of social fission approach not only attracts new customers, but also encourages them to make repeated purchases and become long-time members.
It's worth mentioning that Watsons' Weixin official account matrix has garnered tens of millions of followers. To cater to the diverse interests of its followers, Watsons pushes targeted content to specific audiences. This approach ensures that followers receive content that is tailored to their interests, which significantly increases click rates.
Watsons continues to deepen its O+O platform strategy. To date, Watsons' data platform has gathered more than 200 million loyal beauty care enthusiasts, including over 90% of urban women aged 18–45 in China, earning it the key demographic that both domestic and international beauty brands strive to reach.
As a retailer of different health and beauty products, Watsons not only engages shoppers, but also builds close cooperation with numerous brands. Its large, high-end, and targeted user base, along with its in-depth user insights, enable Watsons to maintain long-term relationships with consumers while also laying the foundation for a robust ecosystem of brand cooperation.
To better leverage its global business advantages and empower more brands, Watsons built its O+O media platform, OPTIMO, which provides brands with digital tools such as WISE INSIGHT, WISE BRAND, and WISE MEDIA. These tools help brands better screen and reach their target audiences while creating a positive cycle of consumer experience, consumer reach, data insight, and brand empowerment. WISE INSIGHT is a consumer-oriented research and insight tool that enables more informed marketing planning. WISE BRAND helps brands to understand consumer trends and changes, health status, and other information so they can assess and adjust their marketing strategies and explore new marketing opportunities. WISE MEDIA uses precise and efficient advertising methods to help brands quickly reach their target audience, increase sales, and evaluate their media influence.
Watsons' OPTIMO Brand Centre has achieved breakthrough growth through collaborations with multiple brands. The center is building a new industry ecosystem with an open attitude, helping to drive new innovation and growth in the industry.
• Watsons has accumulated over 60 million members and over one million community users.
• Watsons empowers its beauty advisors (BAs) with WeCom, allowing them to connect with over 43 million shoppers. Of those, data shows that 48% made purchases after consulting with a BA. Customers who followed a BA's WeCom account spent 3.8 times more and made purchases 3 times more frequently than shoppers who hadn't added it.