A.S. Watson Group: The Key to Enabling a Seamless Offline Plus Online Experience

Digital Innovations sits down with Ohad Elzur, Store & Promotion Technology Director at A.S. Watson Group, to shed light on his company’s strategy to enhance offline plus online (O+O) customer experience.

A.S. Watson Group is the world’s leading international health and beauty retailer with more than 16,000 stores to its name and over 130,000 global staff. It is a Hong-Kong-based company with business units located in Asia, Europe, the UK and UAE, it is part of Asian conglomerate CK Hutchinson – a Fortune 500 company.

With over five billion transactions each year, 140 million loyalty members and its huge presence both offline plus online, you probably have one of their products in your bathroom cabinet. Due to its prominent position as the world's largest international health and beauty retailer, A.S. Watson Group embraces the work it takes to make sure they stay ahead. Crucial to this is close collaboration across different business units.

Here to tell us more is Ohad Elzur, the Store & Promotion Technology Director at A.S. Watson Group. According to Ohad, the main challenge is finding innovative solutions and actively navigating the digital transformation process.

He explains, “A.S. Watson Group is structured like a federation with various local business units, operating with group entities that help the company as a whole to move forward. To take the responsibility we have as group entity, our team has developed the Store Technology Strategy to make sure we are ready for the future and stay ahead. We work with the business units to see how we can ensure successful adoption. We need to focus on internal marketing, digital transformation and change management to facilitate this process.”

Group IT, being one of the central functions, has established a close collaboration with the different business units across the company. It is actively helping these business units through the digital transformation process. Regarding the central solutions in the Store and Promotions Technology domain specifically, the team has developed a future-proof strategy to lead business units to accelerate offline plus online (O+O) success. 

“To bring our strategy to life, A.S. Watson Group needs to focus on digital transformation, user adoption in change processes and the internal dialogue with our business stakeholders,” summarises Ohad.

THE STORE TECHNOLOGY STRATEGY

A.S. Watson Group is on a mission to build technology solutions that create and deliver a seamless O+O customer experience. In the context of constantly changing markets, the solution is simple: employees need scalable technologies to be able to react to these developments. As a result, the company’s Store Technology Strategy aims to make things simpler and faster for everyone.

When asked to elaborate on their Store Technology Strategy, Ohad breaks it down into four elements: transactional platform, operational platform, digitalisation and data.

The transactional platform focuses on one transactional engine that serves any in-store touchpoint or journey involving transactional services, wrapped with A.S. Watson Group’s own API layer to integrate all touchpoints such as the Point of Sale, kiosk, handheld terminal or even a customer app.

Next, the operational platform consolidates and replaces the different operational applications – such as item stock management, operational reports or task management, etc – into a single platform, irrespective of the operating system or device so employees can do everything in real-time on one central platform.

Digitalisation efforts ensure that screens in stores are managed by content management systems. It can be a screen at the window, behind the cashier, on a shelf top or digital shelf label. The aim is for an internal module to manage the content, connecting the dots to backend processes and facilitating internal business processes such as promotions.

Underpinning the Store Technology Strategy is data and having real-time decision- making capabilities is the goal. However, to get there you need to make sure the first and second elements are completed to provide new business logic.

Ohad elaborates, “All apps are combined in a single in-store platform and the store’s applications have a consolidated user experience. Using data in this way gives us the ability to learn, improve, and be future-ready. We can tell that our customers who are shopping with us via various channels, spend up to 30 per cent more and show increased levels of loyalty. This is the essence of the O+O strategy and it is key for us.”

As A.S. Watson Group starts to bring the first functions of their operational store platform to life, they are ensuring that captured clickstream data is fully embedded into the app. On the importance of data helping development, Ohad specifies: “With data, we can tell how fast a colleague could find a function and how much time they spent using this function. This fuels our conversation with the business about how much time they want to spend on a specific function each week, for example. Put another way, one employee hour per week across 16,000 stores adds up to several million dollars spent in a year. Therefore, we see great importance in making sure we’re as efficient as possible.”

To scale up its technology, A.S. Watson Group partners with leading tech solution providers to embrace a ‘stronger together’ mentality. Ohad says, “You need to acknowledge where your expertise lies and where you need other experts to join your journey. There are processes you can coordinate internally and others where you need to find the right partners to help you.

“We have a microservices platform embedded into our architecture where we build all the operational flows, allowing us to easily connect all the dots together. We need to make sure what we are building is based on best practices and market expertise, so we partner with companies to upskill, enhance our efficiency and speed up development.”

One of the valuable strategic partners A.S. Watson Group works with is Zebra Technologies. Ohad enthuses, “We have partnered with Zebra Technologies for our handheld devices worldwide. The Zebra handheld is robust and enables fast scanning which is a key time saver for our store staff. Besides the hardware itself, Zebra brings expertise on how best to use the device for software development. With the right partnership, we can help each other with our roadmaps and futureproof the technology.”

INTERNAL COLLABORATIONS

Cross-business unit collaboration is also necessary to ensure all functions are on the same page. Ohad gives the example of sharing a familiar visual across the organisation in discussing a specific concept. He explains, “A shared vision helps to explain internally what we want to do. Collaboration is important because we all share a common goal, which is to help A.S. Watson Group grow. We must work on understanding each other’s needs and capabilities in order to optimise what we do.”

Speaking of collaboration, the company launched its Store Technology Innovation Lab just before the Covid-19 pandemic hit. Its goal is to define new technologies that bring business value by improving sales or reducing costs, as well as putting a smile on customers’ faces. The Innovation Lab facilitates new technologies to be tested and showcased for business unit decision-makers, truly bringing future technologies to life.

“A lot of what we do in the lab is customer-facing because that is a key part of our DNA,” insists Ohad. “We want to achieve a balance between technology push and business pull. We know customers can start their journey online and then come into the store or go online when they are in the store itself. The moment the customer decides to come to the store is when we step in from a store-technology innovation perspective.

The Store Technology team looks at every step in the transactional journey and tries to make improvements using technology, from finding the product to putting it in the basket or from queuing up to checking out. They also consider ways to improve the business model, such as introducing a locker wall to facilitate click-and-collect.

“The Store Technology team tests and explores technologies that aim to meet a business need in an environment that looks and feels like a store. If the technology is promising and they think it can bring value, the team will try it out in the field in a proof of concept (POC) store. If that is successful and we want to go for a pilot, we then find a sustainable solution to move forward. If the technology is not good enough, the idea is not viable, or the supplier is unsuitable, for example, the idea can be put aside.”

THE FUTURE OF STORE TECHNOLOGY

So, how would Ohad describe his company’s vision for the future? He answers, “Our company vision is to put a smile on our customers' faces today and tomorrow. To do that, we must continue to be a global leader in O+O health and beauty. From the IT side of things, it means that we need to get to a full real-time API-based set of platforms that are data-driven, allowing us to serve the business with any touchpoint, flow, or need across the stores. We are also working on our sustainability agenda. If you consider how we can be more sustainable and efficient from a technology perspective, using and managing the right devices is key.”

Ohad foresees huge developments in terms of mobility while shopping as a fundamental trend for the future. He concludes, “Either the customer will use their mobile or colleagues working in the stores will have handheld devices, ensuring more and more mobility in the stores. We can serve the customer at any point in the store, and with any device. It is our aim to be future-ready with our new technology, with everything built around a single real-time platform.”

For further information on A.S. Watson Group, visit www.aswatson.com

This article was originally published in the April 2023 issue of Digital Innovation, Europe’s go-to digital technology magazine.

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