Text: Xiangshan Finance.
According to the Tianyancha app, recently, Shanghai Watsons Daily Commodities *** was fined 15 by the Pudong New Area Market Supervision and Administration Bureau for preparing cosmetics without authorization and violating the "Regulations on the Supervision and Administration of Cosmetics".More than 30,000 yuan, and confiscated packaging materials.
If Watsons is just a new beauty retail store, we may attribute it to the immaturity of the management, but for a beauty retail chain with a history of more than 30 years, this mistake is particularly eye-catching.
And from 2022's "Watsons 001 yuan is sold and then not shipped, and the anchor scolds consumers for being 'like mad dogs'" to the present, almost every once in a while, similar topics such as "Watson's poor shopping guide service attitude" will appear, so that now the statement that "Watsons is abandoned by young people" has almost become a "cliché" in the beauty industry.
But the problem is that Watsons has not made any changes to this, and even launched a wool picking strategy in order to please young people, but judging from the declining revenue scale and the number of stores in China in recent years, Watsons still seems to be on the verge ......of being abandoned
Gao Hongda, who has been in office for seven years, failed to stop the fall of Watsons
In fact, since 2015, A.S. Watson's performance in the Chinese market has been facing stagnation, so in 2016, A.S. Watson's performance growth rate in China has experienced negative growth for the first time, which is -382%, and store sales fell by 10% year-on-year that year1%。
In 2022, the expansion pace of Watsons' China stores will also show negative growth for the first time, with the total number of stores falling below 4,000.
Subsequently, according to the first half of 2023 performance report released by Watson's parent company, CK Hutchison Industrial***, Watsons China's total revenue in the first half of the year was 88HK$8.4 billion, down 8% year-on-year; The number of stores in China has further shrunk from 3,836 in 2022 to 3,780, and the overall performance can be described as worse year by year.
The decline of Watsons can be roughly summarized into two reasons:
First, at the strategic and channel level, the trend of online e-commerce is avoided and trivialized.
Why did Watsons China's growth stagnate in 2015 and 2016? The answer has to do with the explosion of online e-commerce channels. According to the data of the Prospective Industry Research Institute, in 2015, the retail transaction scale of China's beauty products reached 484.6 billion yuan, with an annual growth rate of 20%, of which the online transaction scale was 176.7 billion yuan, accounting for 36%, and continued to maintain strong growth.
As more beauty retail brands shifted online, A.S. Watson's offline channel traffic advantage began to be weakened.
However, what is interesting is that in the face of the surging trend of the e-commerce era and the signal of its own stagnation of growth, Luo Jingren, then the CEO of Watsons China Headquarters, did not embrace e-commerce in time, but avoided the important and "hidden", and his reaction was:Continue to open stores, and shift the focus of store opening from first- and second-tier cities to third- and fourth-tier ......cities
Then the result is self-evident, Watsons missed the first wave of e-commerce channels and online traffic explosion of the bonus outlet.
Second, at the level of models and products and services, the "elephant turns" is not thorough.
Before the announcement of Watsons China's 2016 financial report with negative growth for the first time, in March 2017, Luo Jingren resigned due to personal reasons. Gao Hongda, then Chief Operating Officer of Watsons China, took over the business in China and began an all-round "elephant turn" transformation from online channels to offline stores.
In 2017, Watsons launched flash shopping and launched Meituan, Ele.me, etc. Subsequently, it gradually supplemented online platform channels such as Xiaohongshu, Douyin, and WeChat mini programs.
Less than half a year after the launch of the seventh-generation store in the Luo Jingren period, Gao Hongda's eighth-generation Watsons China store was officially launched, and at the same time, the store added free makeup and other services.
The third is to launch the "O+O" retail model, that is, to open up the omni-channel user operation system of online traffic and online experience, and to do one-to-one service ...... for members on this basis
So what is the result? In the past two years, the declining revenue scale of Watsons China tells us the answer.
Why did Gao Hongda's efforts fail to change the situation of Watsons in the Chinese market?
From the perspective of the consumer market, when the shortcomings of online channels are filled, there seems to be only one reason why Watsons is still not favored by Chinese consumers: you can't buy the good-priced products you want in Watsons stores, you don't have a favorite brand, and you can't find the new products you want.
Behind it is the incomplete transformation of Watsons China and Gao Hongda, that is, only the channel has been changed, but the corresponding brand product and service upgrades have been ignored, that is, it has not touched the core profit logic of Watson's self-operated products, nor has it completely let go of Watson's pride as a beauty retail "giant crocodile" in the past.
For example, in terms of products and operations, in line with the previous Watsons' huge offline channel advantages, on the one hand, is the self-operated strategy of store brand products accounting for more than 30% of sales, and the core idea is to collect some excellent global products to the self-research department for "big brand replacement" development.
This model is imaginative, in the non-e-commerce era when it is inconvenient to buy international beauty products. But now, with the help of major e-commerce platform channels, consumers' awareness of various brands is deepening, and they can also buy more big-name products in a more transparent way.
In other words, the brand premium space of Watsons replacement products has been greatly eliminated.
But Watsons China doesn't seem to realize this, in the current era of uniform prices on the whole network, major social platforms still have from time to time "Watsons offline stores of the same product, twice as expensive as online" complaining posts, attracting many netizens in the comment area.
However, it should be noted that in the absence of further confirmation from these third-party evaluations, it is not appropriate to jump to conclusions for the time being.
On the other hand, it is an "unfriendly treaty" with third-party brands in exchange for the scale advantage of offline stores. In the past, A.S. Watson held the right to speak in the industry, so brands entering A.S. Watson not only had to face various fee thresholds such as barcode fees and entry fees, but also had to endure the unreasonable conditions of a relatively long payment collection period.
These entry thresholds are undoubtedly unacceptable for the cutting-edge domestic makeup product brands that modern young people like and are cost-effective. Perhaps because of this, until now, in the **Watsons official***, it has not been possible to find popular domestic beauty brands such as Perfect Diary and Huaxizi.
At the same time, a group of new generation of offline beauty collection stores represented by colorists, wow colour, etc., focusing on zero threshold, indiscriminate recommendation, and only commission, have gradually become the main positions of cutting-edge brands, and thus gathered the traffic mentality of a new generation of young beauty consumers, which is in stark contrast to the "middle-aged" Watsons ......
Hot and cold shopping guide service, contradictory Watsons China
If the product "fails", it can be attributed to the "failure" of Watson's China strategy, then the "poor service attitude" towards consumers may fall on the poor management of the management.
In the major social networks, Watsons' service attitude has almost become the hardest hit area in recent years than the product "no", which makes the mass consumer "unhappy", mainly concentrated in two aspects:
The first is the complaint about the way the online cashier pays.
Watson's cash register is like an ornament. This is the first feeling of many netizens after visiting Watsons.
Even if you go to an offline store, you must scan the QR code on WeChat when checking out, enter the Watsons cloud store mini program, and then place an order to check out, as well as let you add a shopping guide to the corporate WeChat.
There are even consumers who complain: Now there are no members, no shopping guide enterprise WeChat, Watsons stores will not pay. The staff also said that it was ...... company regulations
The second is the service attitude of consumers who are hot and cold, and even "watch people put dishes on the plate".
In the first period or the performance period, Watsons store shopping guides often show extreme enthusiasm, "like a wolf seeing meat, keep pushing this, push that, and check it when you go home after buying, you don't need to be so expensive......."”
Follow me every time you go, as if you are afraid that I will not pay for something."
only push the expensive but not the appropriate, exaggerated to open your eyes and say nonsense".
But when the performance is up to standard or consumers only buy a bottle of water or buy less things, Watsons staff open up a different attitude.
There were no customers in the store, and they didn't care about me when they gathered there to chat. ”
Except for the issuance of membership cards, everything else is blackface......
Although Xiangshan Finance has always had reservations about the evaluation of these third-party social platforms, in the face of such a common and similar complaining experience, it still makes people wonder if there is a problem with Watsons China's management strategy?
In this regard, a Watsons clerk who left the company disclosed the reason on social **Behind the hot and cold service attitude is Watson's huge number of KPI assessment indicators.
For example, if the unit price of customers should be maintained at more than 120 yuan, then "the clerk must hate customers who come in and only buy a bottle of water and a pack of tissues, because it will lower the overall unit price." ”
At the same time, Watsons emphasizes the customer flow conversion rate, "What Watsons store staff are most afraid of is that a group of people come in to hang out, but they don't buy things, and if they go in and out a few times, the customer flow conversion rate will become very low." In addition, employee entry and exit will also be taken into account, and many stores will let employees go to the toilet less to avoid reducing the ...... of customer flow conversion rate”
In this way, it may be precisely because of Watsons China's excessive pursuit of paper data that the shopping guides at the bottom of the store have to put on two faces to consumers. This actually explains that as well,The answer to why A.S. Watson requires customers in offline stores to choose online checkout more often may be related to the O+O platform strategy change implemented by A.S. Watsons.
Normally, the original intention of Watson's O+O model is to serve consumers, aiming to transform the core of retail from "operating physical stores" to "operating customers". In other words, Watsons' shopping guide, in the past, aimed to serve customers in stores, but now it is to manage the relationship with customers. Then letting customers add WeCom is one of the methods.
But the problem is that due to the incomplete strategic change of Watsons China and Gao Hongda, the store products have not ushered in the imaginary outbreak, but the core KPI may still refer to the ideal standard, so from the headquarters to the region to the terminal store, online sales data need to be delivered, and the shopping guide also needs to complete the sales conversion of self-operated brand products accounting for more than 30% of the store, therefore, this requires offline stores to complete the member drainage as much as possible, even if it is transformed into "if you don't become a member, you won't pay" and then move to the online checkout ......
After all, if Watsons' KPIs are not achieved, then the result may be that the store itself digests internally. In this regard, there have been suspected internal employees of Watsons who have published a "Letter to Watsons China's Top Leaders" on Xiaohongshu in response to these management issues. Among them, the first question mentioned is "Does the company explicitly stipulate that the store manager needs to purchase the goods that have expired or are about to expire in the store?" ”
In fact, looking back, whether it is young people complaining or the industry singing about Watsons, there is a meaning of "hating iron does not become steel".
Because of the market advantages such as system, chain and brand influence accumulated by Watsons over the years, it is still in an absolute leading position in the current beauty industry. Moreover, coupled with the financial strength background of the Yangtze River Hutchison Industrial and Li Ka-shing and Li Zeju families, whether Watsons China can do a good job in products and services is hardly a problem in itself.
Therefore, as long as the beauty and personal care hypermarket model is not abandoned by the times, Watson's future imagination will not disappear.
So, the only thing Watsons China needs to do now is to admit the shortcomings in strategy, and then conduct top-down market combing in the management, reform the brand cooperation model, and make more in-depth adjustments in the product selection strategy, and perhaps there will be no chance to rejuvenate the market for the second spring.
After all, if you want to say who abandoned Watsons and who can save Watsons, the answer may be Watsons himself......