Why was Watsons forced to transform and save themselves?

Watsons, a daily chemical chain brand, is accelerating its embrace of e-commerce. It is reported that during this year's "Double 1 1" period, Watsons not only launched a promotional carnival online and offline, but also launched "store express" and "lightning delivery" services.

In this regard, the relevant industry insiders interviewed by the reporter said that behind the embrace of e-commerce is the fact that Watsons bid farewell to the golden age of development. Under the increasingly severe performance pressure, Watsons tried to rely on the Internet.

Transformation and self-help. However, with the great changes in the retail business environment today, the fundamental problem cannot be solved simply by surfing the Internet. In the future, Watsons should actively adapt to the current new retail reform model and further build its core competitiveness.

Strive to break through the current business dilemma.

Say goodbye to the golden age and usher in a turning point in performance.

It is understood that during this year's "Double 1 1" period, Watsons spared no effort to launch a large-scale promotion on the online platform, and also launched new "store express" and "lightning delivery" services.

Among them, the "store express" service has now covered 50 cities across the country. Customers can go to the "Store Express" area through the official flagship store of Tmall Watsons and the official shopping mall of Watsons in China, place an order online at the designated store, and pick up the goods at the store with SMS notification.

"Lightning delivery" service is a strategic cooperation with Hungry. After the customer places an order in the lightning delivery area of Watson's China official mall APP or Watson's lettuce APP, the store will receive the information and confirm the order, arrange the knight to pick up the goods at the store, and deliver the goods to the customer within 2 hours.

Insiders pointed out that Watson's accelerated embrace of the Internet, or its farewell to the golden age, ushered in a turning point in performance after a desperate war.

According to public information, Watsons officially entered the mainland market of China from 65438 to 0989. Since 2005, Watsons has begun to expand rapidly. In 2007, Watsons opened its 300th branch in Nanjing, Jiangsu, China. As of June 30th this year, the number of Watson's stores in China has reached 30 14, with more than 60 million registered members.

Although it continues to expand, Watson's performance has already fallen into a quagmire. In 20 16, Watsons first experienced negative performance growth in China. The financial report of that year showed that Watson's China revenue was HK$ 20.9 billion, down 4% compared with 20 15. In the same period, Watson's average single store output decreased by about 10% compared with 20 15 comparable retail sales.

According to the data in the interim financial report of 20 17, as of June 30th, 201061500 million was the revenue of Watson's China, in which the sales of Watson's China store decreased by 6.2% in the first half of the year.

Under the deep pressure of performance, Watsons began to make changes. In March this year, Luo, chief executive officer of Watsons China, resigned for personal reasons and was replaced by Gao Hongda, chief operating officer. Gao Hongda started a series of measures.

Strategic adjustment, including upgrading old stores, adding cosmetics and Japanese and Korean cosmeceutical brands, piloting shopping guide projects, and expanding e-commerce channels. Today, relevant adjustments are still in progress.

An expert in the chain retail industry pointed out in an interview with the Economic Information Daily that Watsons, once the benchmark of traditional retailers, won an award for its precise business positioning, reasonable layout and perfect supply chain system.

The rapid development, especially Watson's strong site selection and supplier management ability, has led a long-term business myth and made many beauty and FMCG brands. "However, for today's retail market,

The added value of these core advantages, such as the choice of commercial property, high-quality supplier management and personalized and fashionable store retail management, is gradually decreasing. "

Encounter multiple attacks

Accurate target consumer positioning and successful brand management structure are the keys to Watson's success in the past ten years. However, industry analysts believe that the aging of its own brand, fierce market competition and the fierce impact of e-commerce are the main reasons for Watson's decline in China market performance.

It is understood that the products in Watsons stores are mainly composed of three parts, imported brands, local brands and their own products. Among them, private brands account for about 30% to 35%, including the group's own brands, exclusive distribution agent brands and targeted procurement products. Because of its large scale and price advantage, its own brand once became Watson's main profit source.

However, the problem of Watson's own brand aging is increasingly prominent. For example, collagen and bird's nest series, which were all the rage, have been aesthetically tired by consumers because the product packaging has remained unchanged for many years. add

At the end of 20 16, the snail skin-care lifting mask produced by Watson's own brand Meijiafen was taken off the shelf due to quality problems, and consumers have lost trust in some of Watson's own brands.

In this regard, insiders pointed out that in order to pursue high profits, Watsons continued to put more independent brands on the shelves, but did not increase its efforts to introduce more popular and high-end imported brands to increase its presence in local brands. When its positioning, brand, products and services could not meet the needs of consumers in first-and second-tier cities, Watsons began to expand into third-and fourth-tier cities, and ensured revenue by sinking the market and increasing the number of stores.

20/kloc-in August, 2006, Luo, then CEO of Watson's China district, also publicly stated that the focus of Watson's future store expansion is the sinking of third-and fourth-tier cities. Of the 3,800 stores planned, Watsons hopes that first-and second-tier cities will account for 2,255, and third-and fourth-tier cities will account for 1.545.

Judging from the competitive environment of the daily chemical industry itself, in first-and second-tier cities, Watsons will not only encounter rivals such as Wanning, but also face the impact of the high-end daily chemical market brought about by consumption upgrading.

The main body has become over 35 years old, and the consumption demand level of these consumers has been significantly improved. Even if Watsons sinks its channels to third-and fourth-tier cities, it will still face local beauty chains such as Guerlain and Botanists.

The multi-faceted attack of the store.

Many insiders pointed out that the impact of e-commerce and new retail is the most critical factor. The cosmetics industry in China has ushered in the era of e-commerce, and the appearance of beauty e-commerce has triggered a new wave of retail. However, during this period, Watsons remained silent about expanding its territory and increasing the number of stores to achieve scale effect, and missed the golden time of e-commerce development.

Zhao Jianbo, an associate researcher in the Enterprise Management Research Office of the Institute of Industrial Economics of China Academy of Social Sciences, said in an interview with the Economic Information Daily that Watson's business dilemma seems to stem from the substitution of e-commerce online shopping or the competition of similar business models such as Wanning. The fundamental reason is that we have not really grasped the "new retail" model.

The above-mentioned chain retail industry experts also told reporters that although Watsons has opened the e-commerce entrance at present, it is far from solving the two key links of "brand interaction" and "socialization" in new retail. At the same time, it failed to make effective use of a large number of consumer data and operational data accumulated by Watsons for decades.

"On the one hand, Watsons is eager to transform, and on the other hand, due to the huge size of the store, it is difficult for Watsons to let go. In the huge China market, Watsons has temporarily discovered the potential of third-and fourth-tier cities.

The way out, the living space of these cities and stores is still very large, and because of this, Watsons can still maintain a certain expansion speed at present, but this is by no means a permanent solution. "said the expert.

It is urgent to adapt to the new retail revolution.

Some experts said that the current retail environment has undergone drastic changes, and Watsons should accelerate its transformation under the new retail background.

"Both traditional department stores and professional retail channels including Suning, Gome and Red Star Macalline are facing tremendous performance pressure under the impact of new retail. In this case, it is recommended to bend.

On the basis of mastering a large number of commercial real estate and supplier resources, Chen Shi has further strengthened its interaction with consumers and established a young and differentiated consumption and brand awareness model. "Experts in the retail chain industry.

Go ahead.

In Zhao Jianbo's view, the integration of online and offline development, the establishment of an experiential socio-economic model and the creation of a "small fortunate" model based on emotional economics will also help to build Watson's core competitiveness and thus better achieve transformation.

First of all, in the development of the new retail model, we should pay attention to the integration of reality and reality or the integration of online and offline development. In fact, no matter how the network economy develops, online shopping alone cannot meet people's requirements for a better life, and consumers still need offline experience and socialization. Compared with the continuous innovation of offline stores such as Boxma Xiansheng, Watson's store model in the past 20 years should be changed.

The second is to develop experience economy and social economy. Faced with the impact of the network economy, Watsons chose to "go online" to develop online sales channels, which is obviously not enough. "Experience" is often irreplaceable by online shopping.

Yes In addition to experience, different communities and shops can also use the Internet to form interactions. The future of offline stores will be to use the Internet to develop experience economy and social economy. Future consumer demand can only rely on online shopping, on a large scale.

Supermarkets are already difficult to satisfy, and only the localized community economy and community economy model can be competitive.

The third is to add more "small fortunate" elements. Watson's answer is not to establish online sales channels, but to develop the irreplaceable core competitiveness of Ali and JD.COM through Internet economic innovation. Zaidagui

In the era of model economy, Watsons used the differentiation based on market segments to build a business model different from Wal-Mart and other large supermarkets. In the era of Internet economy, Watsons should also create an experience economy or community experience based on network tools.

Economic model, reshape their own value creation model. In the era of a better life, Watsons should lead consumers to "pursue happiness". Compared with the existing standardized chain operation, we should create a "small accurate" based on emotional economics.

Fortunately, the model will be more conducive to the transformation of enterprises.

In China, you should adapt to the lifestyle of China.