O+O is the new standard for retail, Malina Ngai, ceo, A.S. Watson (Asia & Europe) and chief operating officer, A.S. Watson Group told attendees during a keynote interview at the Beauty Tech Live event today.
Ngai said O+O (online to offline or offline to online) refers to how today’s customers shop – a journey that almost always involves online plus offline. She said the concept differs from O2O, which refers to driving customers from one channel to another.
“But this is not what the customers want, they want to shop wherever and whenever they like,” said Ngai. “So, forget about physical versus online, it’s not either or, but the most integrated customer experience in every touchpoint. And the focus should be on customer lifestyle and this is what O+O is all about.”
“The motivation behind this O+O standard is very clear for A.S.Watson: There is no cannibalizing in customer spending in physical stores,” she said. “The analytics show us that in fact our O+O shoppers, meaning they shop with us both in physical stores and online, their spending is actually three times more than the customers who shop with us only in the physical stores. So, there is no cannibalization and it’s about creating a bigger share of wallet. Retail is not dead it just needs to get better,” Ngai highlighted.
The O+O ecosystem
Ngai said the O+O standard involves an entire ecosystem powered by technology, big data and AI. Also important is organizational cultural changes in terms of managing business and deciding where and what to prioritize.
Ngai explained that customer expectations for stores had moved on, particularly in the wake of the COVID-19 pandemic. She said believing in the old adage that ‘the customer is king’ is about more than delivering good customer service.
“One, you really have to give them the best, and two, you have to know their power,” in terms of their ability to criticize things like slow delivery times or content on social media, she said.
Ngai noted that an important, but often ignored aspect of the digital transformation of physical stores, was the need to redefine the role of the store teams and beauty advisors. In this vein, A.S. Watson has adopted tech tools that empower store staff to grow direct and personal interactions with customers.
“We are trying to allow [store staff] to spend less time on administration and more time on customer service,” she stated. “It’s more about interactions, so we have to inform them and keep them up to date about a lot of social-media trends, and from driving transactions we are talking about interactions. So, in some way our store team and beauty advisors they become like our CRM managers too because they are managing a community around the stores and customers who actually shop in store.”
For example, in Watsons China, customers can seek personalized advice from in-store beauty advisors via Enterprise WeChat. The advisor can recommend personalized promotion offers with the help of artificial intelligence to help order the products from its cloud service MyStore (WeChat platform tailored for Watsons) and customers can receive product delivery within one hour.
All of the group’s physical stores are connected to digital platforms, meaning the product offering is not limited by shelf space. In a few clicks, store teams can order products for delivery or pick-up by customers. The company’s 139 million loyalty members are also digitally connected with social media and digital platforms, so they can shop online not only on A.S. Watson’s mobile apps and websites, but also via WeChat, WhatsApp, and phone.
Ngai said the store network today allows A.S.Watson to have flexible fulfilment options for customers, such as the offer of 30-minute click-and-collect and 60-minute delivery. Initiatives such as WatsonsGo enable customers to buy in store with payment via mobile app.
In addition to WatsonsGo, Ngai pointed to other examples of technology the company has implemented:
- Go-In-Store: Customers who browse online can speak to an in-store beauty or health advisor on video to have a consultation.
- Skin Analyser: A device to analyze skin types and condition and offer product recommendations. Skincare solutions continue to be in high demand around the world.
- ColourMe: Using augmented reality technology, upgraded virtual make-up services have been launched in Watsons’ apps. Even if customers are wearing face masks, they can virtually try on lipsticks. In addition, Watsons has introduced a virtual hair coloring tool in the mobile app to help customers choose the right hair colorants.