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Watsons, who strive to be young, still can't impress young people
Written by / Lai Hyun-chi
Editor/Wen Jie
In mid-March, Watsons' parent company, Cheung Kong Hutchison Industrial Co., Ltd., announced its annual financial results for the year ended December 31, 2021.
In the past year, the health and beauty products business represented by Watsons Personal Care Stores in China sold HK$22.77 billion, an increase of 14% year-on-year, the largest increase in seven years. On the other hand, Watsons' profits continued to decline, at just HK$1.808 billion, even lower than the HK$1.952 billion at the trough of 2020.
Even more brutal than the data is the reality of the Menkolofinch. If you pay a little attention to the Watson stores that can be seen randomly in the business circle, you can find that its existence seems to be incompatible with the current consumer trend.
From the brand squeezed out of the head also want to enter Watson's, to the brand can not be separated from the flagship store, from young people even if they hate the shopping guide to make up enough "buy three free one" to "the next head, Watson's", under the siege of many new commercial formats, the road to transformation is also to take a step and fall, customers have not been guided to buy more Watsons is embarrassing.
E-commerce, beauty collection stores besieged, young people "down"
If it weren't for the new advertisement of Watsons at the bus stop, Jinya would have forgotten that she also had a Watson membership card. And even if she saw the slogans of "hot pot equipment" and "beautiful new test world" in the platform advertisement, Jinya was not interested, "The last time I consciously wanted to go to Watsons for a walk, it was when I was in college, probably around 2018." ”
Open social platforms such as Xiaohongshu and Weibo to find that Watsons across the country are rapidly being forgotten, "Watsons have also withdrawn from the stage of history? In the past, I would go to Watsons when I bought something, but now I go to the mall and I am really thirsty to go in and buy a bottle of mineral water. "Although the shopping guide is not with people, the preferential discount seems to be more, and some stores also sell big brands and small samples, but they are unwilling to go." "Isn't buying in e-commerce and counters better than Watson's incense?" ”......
In fact, brands seem to have left Watsons earlier than consumers. Zinc scale search found that most beauty brands began to lay out e-commerce platforms around 2015. Among the domestic brands, 8 sub-brands under Shanghai Jahwa, including Herborist Set, entered the e-commerce platform in 2015, among foreign brands, Friffons, who are still active on major social platforms, also opened a flagship store in 2015, while Woohou entered Tmall in 2014...
Although this does not mean that the brand is completely out offline channels, the impact on offline beauty sales is not small.
According to the statistics of the Prospective Industry Research Institute, from 2015 to 2020, the total share of cosmetics including traditional supermarkets, KA (supermarkets or hypermarkets) and CS (cosmetics stores) decreased from 37% to 28%. Correspondingly, in 2011, the e-commerce channel accounted for only 5.3% of the cosmetics market, and by 2020, its market share has gradually increased to 38.0%, far surpassing the rest of the channels to become the most important retail channel.
Not to mention that during this period, live e-commerce began to take shape, and a new generation of domestic beauty brands represented by Perfect Diary can be called Internet natives, which were born from online channels.
As brands go online, consumers leave one after another, and Watson's mainland business first experienced negative growth in 2015 and declined.
"Watsons' price has not been particularly cost-effective, and various discount activities are often complained about, but in order to cultivate consumption habits, e-commerce platforms were very good at doing this type of discount activities at that time, and the price can also be pressed lower, and consumers will of course vote with their feet." Cathy once worked in charge of sales at a beauty brand, in her opinion, because the beauty and personal care brands in Watsons are mostly mid-range brands, the impact of e-commerce will be greater, "After all, high-end big brands are more inclined to go to the counter, and the prices of big brands are relatively more stable." ”
But this is only the first shock Watsons faces. In contrast, the beauty collection stores that have frequently appeared in major business districts across the country since 2019 seem to have a greater impact on Watsons.
Different from the unified style of Watsons, the store design that has not changed for many years, the store design of the beauty collection store represented by Xi Yan and Yue Mei is more fashionable, younger and more diverse, and it is also different from the brands within Watsons, which are more fixed, and the brands included in the latter are mostly new national trend brands or popular affordable brands such as Perfect Diary, Mary Deja, Orange Duo and Little Odin, and then mixed with some overseas niche or affordable brands that have been popular for a while in recent years, such as Itti's House, wet n wild, etc.
Furnishings of beauty collection shops
"Today's young people like to 'punch in', Watson's layout is good, the store style is good, there is nothing worth young people to punch the clock." And like the brands in the beauty collection store, young people can often search for many kinds of grass stickers on the Little Red Book, and the things in Watson's have no room to be discussed, or it is counterproductively all spit. Jinya's ideas have also been verified on major social platforms. Many netizens said on Weibo, "Went to Watsons was recommended by the shopping guide to recommend a product, immediately searched on the little red book, found that it was all spit, 'the mouth of the shopping guide, the ghost of the deceitful'. "But if I searched for the Little Red Book after the recommendation of Watson's shopping guide, I wouldn't buy this kind of thing"...
Therefore, when the beauty collection store is full of Internet celebrities and punch-in consumers who visit the store, Watsons, who has no price advantage and no brand attraction, has let the young people get off their heads early.
From annoying BA to rollover anchor, step by step?
Watsons has not thought about transformation, but at present, the pace of transformation is either slow and half a beat, or it is a fall.
Almost every college student and urban beauty who has walked into Watsons has had an experience of being over-promoted by BA (shopping guide), and this has also once made Watsons criticized. As a result, walking on two legs online and offline has become a transformation road that Watsons has to take.
Since 2018, Watsons has been promoting the "O+O" strategy, claiming to "use digital technology to better understand user preferences". From online official stores, Watsons cloud stores, to "store pick-up" and "lightning delivery", Watsons is trying to integrate channels. The Mini Program has also undergone a revision, upgrading from the past window display page to an accurate match recommendation page, and replacing multiple scenes such as work, life, and festivals.
According to Watsons' vision, the future of "O+O" is like this: online through small programs to create a "beautiful community that loves to shop and is good to shop", and at the same time through the O+O retail model to online combined with offline multi-channel to reach consumers. By 2021, Watsons claims to have achieved the full ecological coverage of the "O+O" retail model, and based on its own digital construction results, it has built a communication platform with customers from multiple touchpoints such as Mini Programs, Enterprise WeChat, and One-on-One Beauty Consultants, and realized long-term communication and cultivation of target customers.
But in fact, it is not so easy to create a Watson version of the "Little Red Book" on the Internet, zinc scale in the Watsons Mini Program to open a hot topic found that the number of popular posts under the topic is also in double digits, the degree of discussion is far less than a real social software.
Many users are dissatisfied with Watson's customer service phone
On the other hand, offline shopping guides may indeed not be so fond of sales, but many consumers find that Watson's telephone and online sales are more annoying. "I'll never go to Watsons again in my life to buy things, I won't use my membership card to buy things, and now I'm really no one to follow, good guy, a month has passed and I have to call (me)." "Watson users, have you often received phone calls and text messages from Watsons lately, and called you from time to time?" ”......
There are also many netizens who suspect that this is a new type of fraud, because most of the phones are private mobile phone numbers rather than official phones, but there are also consumers who consult the official customer service on this, and the official customer service said, "There are return visit calls, or recommended activity calls, etc. These calls won't be 400 or 800 calls, they'll all be mobile phone numbers. ”
The enterprise WeChat has also become a copy of the offline BA, which not only makes consumers feel disturbed, but also feels burdened by shopping guides. "Every day, we have to use enterprise WeChat to add customers, which is also a goal and a task, but most customers hate to be added, and even delete it after adding it." Tian Yu once worked part-time in Watsons when he was in college, and eventually left his job because he could not stand the relevant assessment tasks.
In addition, in the process of transformation, Watsons also received many consumer complaints. In terms of black cat complaints, as of March 30, 2022, the number of complaints from Watsons has reached 7474. Zinc Scale found that the complaints in the past 30 days were mostly due to refund and delivery problems, and most of the sales channels were Watson Cloud Store and Watson Mini Program.
One of the more prominent incidents occurred in January 2022. At that time, Watsons in the "1 cent to buy masks" activity, the supply of goods was not fully prepared, a large number of masks were out of stock, could not be cashed and sent to customers, resulting in customers entering Watson's vibrato live broadcast room to express dissatisfaction, the result was that the anchor insulted customers "like mad dogs biting people" and so on.
For Watsons, who had recently stepped into the live broadcast room, this was almost a heavy blow. Although Watsons quickly issued an apology letter, saying that it would replenish the out-of-stock goods, and explained that the live broadcast anchors came from third-party companies and would strengthen the review and supervision of third-party cooperative companies in the future, consumer dissatisfaction was difficult to be resolved.
In fact, Zinc Scale found that consumers who bought masks at the campaign for no less than January did not pick up until March.
Increase income without increasing profits, "beautiful new test world" Some people want to "try"?
If all of the above is still the appearance, then Watson's latest annual report data is even more embarrassing.
As mentioned at the beginning, Watson's dilemma of increasing revenue without increasing profits remains difficult to solve - while revenue has increased, the EBITDA and EBIT gross margins of Watsons China health and beauty products have declined compared with 2020. Among them, EBIT (EBIT) was HK$1.808 billion (about RMB1.46 billion), and the gross profit margin was 8%, which was lower than the HK$1.952 billion (about RMB1.585 billion) in 2020, and the gross profit margin was 10%.
Although Watsons explained in its earnings report, "in the second half of the year, passenger flow declined due to regional outbreaks and tightening of public health measures across the country, resulting in a decline in profits." "But the practical reasons may be more complex."
It is probably under this worry that Watsons launched a new brand proposition of "Beauty New Trial World" in 2022, claiming to use the five senses of "sight, hearing, smell, touch, and taste" as a model to create a three-dimensional five-sense beauty consumption experience for customers, and to build offline stores into third-party places to relax themselves and feel caring, so that customers can not only enjoy their own beauty moments, but also share beauty with others to achieve the satisfaction of young people's social needs.
But zinc scale found that from the online point of view, on the one hand, the "novelty test" model in the Watsons Mini Program has actually been launched by the e-commerce platform, such as Tmall's U first trial, which is not an innovative move, on the other hand, from the trial feedback report it launched, the enthusiasm of users is not high, one of the limited 1470 points, 48429 people applied for the trial is currently only 1 person feedback.
In addition, its launch of virtual IP "Qu Chenxi" and interactive mini program "Qu Chenxi" and so on, it seems that the response is also flat. "It can be seen that Watsons is indeed working hard, but its small programs are now like a hodgepodge, and I want to learn the Little Red Book to do social networking, I want to learn to try e-commerce, and I want to learn to play virtual IP and virtual pets, but everything is average." After 00, Muya admitted that she did not have any specific "youth filter" for Watsons, and Watsons, who is now working hard to become younger, still cannot impress her.
Let's take a look at offline stores, under the influence of the epidemic, when the vast majority of physical stores began to close stores to seek profits, Watsons did not stop the pace of opening stores, in 2021 the world opened 231 new stores, China opened 64 new stores, according to its official data, in 2021, Watsons guided 1.1 million people to offline stores to do skin tests, which is probably part of the "beautiful new test world", but how much skin testing has drained its sales, but also have to put a question mark. Zinc Scale searched for keywords for "beautiful new horizons" on platforms such as Xiaohongshu and Weibo, and found that most of the relevant posts were published by Watson store employees.
It is worth noting that Watsons also quietly opened the super small shop model in the second half of last year, and some new stores even have only 10 square meters. Some media said, "Once this asset-light and interactive experience-oriented store form blossoms everywhere, Watson's tentacles in the Chinese market are likely to not stop at the county seat, and whether it will go deep into the community and township is unknown." ”
But, with stores popping up everywhere, can it change the reality of the Menkolo?
END
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