A.S. Watson’s $400 Million Investment in Supply Chain Transformation Strengthens its O+O Capabilities

At the recent interim results announcement of CK Hutchison, the parent company of A.S. Watson reported a 22% increase in revenue in its Asia operation and 13% in Europe. The company attributes its resilience and ability to react to challenges with a laser-sharp focus on consumers as factors that helped it power through the Covid-19 pandemic.

 

“There is no instruction manual for how to lead at a time like the Covid-19 pandemic,” said Ngai. “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.”

 

Currently, the company has 130,000 colleagues globally with the majority of them working in its physical stores. The company's prioritization of employee health and safety and financial security during market lockdowns helped to keep morale up during difficult times, Ngai said.

Customer Love Score

As part of the company’s focus on people amid the ongoing pandemic challenges, the company has also recently announced its plan to offer 200,000 job opportunities worldwide for young people by 2030, enabling them to gain valuable experience to develop their career in retail. The company also strengthened its commitment to inclusion and diversity and sought to expand its understanding of women’s needs.

 

“We’ve been working to build a lasting and close relationship with our billions of customers who shop with us every year, amongst which 142 million of them are loyalty members,” he said. “Customers are more emotionally demanding for relevance, care, and personalization, so we need to show them that we understand, we care, and we want to stay connected to them.”

 

What’s more, the company conducts monthly customer surveys in all operating markets, called Customer Love Score. It added Customer Love Score as a KPI in all businesses to reinforce company purpose. The feedback on its O+O experience has improved from 87 to 90.5 out of 100 in the last three years. Last year alone, the company received over 4 million responses from customers who shopped with the business offline and online. Over 60% of them rated the company 100. 

  

Looking ahead, online retailing will remain part of customers’ shopping habits, but the ongoing pandemic underlines the desire among customers for human connection. This emphasizes physical retail’s need to evolve in order to serve customers with friendly services and interactive experiences of products while fully integrating with online and digital experiences to provide relevant O+O choices for customers.

 

“Our focus on further strengthening the O+O platform strategy at A.S. Watson stays solid in the very volatile and complex world,” said Ngai. “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. We are keen to build international partnerships with companies who have expert experience, products and solutions in supply chain.”