During the pandemic, health and personal care were was the best performing category in terms of sales. Watsons, a giant in the category, took the time to re-assess also their values focusing on how to use their business scale for the greater good and launched a series of initiatives.
Retail in Asia had the pleasure to interview Irene Lau, Managing Director (MD) at Watsons Singapore, about the company’s sustainability efforts and its impact as a health and beauty retailer.
Irene Lau is responsible for strategic business growth at Watsons, taking the dynamic brand to the next level as a differentiated multichannel retailer.
Irene had an illustrious career with Watsons, where she started as a Marketing/Brand Development Director at Watsons Singapore between the years 2008 and 2011. During that period, she started the Watsons Membership Program, which today has grown to a base of more than a million members.
She later joined Watsons Taiwan as the Marketing & eCommerce Director from 2013 to 2017. During her tenure there, she was the driving force behind the business’ transformation through an integrated customer branding strategy of CRM (customer relationship management), digital, social commerce and O+O (offline + Online) retailing.
Irene returned to Singapore to head up Watsons Singapore as the COO in 2017 and was promoted twice in a span of 3.5 years to the current position of MD. She is instrumental in catapulting Watsons Singapore into the digital age with her keen understanding from the customers’ perspective and her ability to constantly stay ahead of the curve. Under her stewardship, Watsons Singapore beat competition to emerge as retailer with the highest Brand Equity since 2018; its eStore grew to be the number 1 retailer within the Health & Beauty industry with the highest awareness and purchase incidence. As the business unit head, she has continued to drive sustained sales growth within a very competitive retail landscape.
Irene brings her personal philosophy to her role in Singapore. A strong advocate of teamwork, she believes that every person on the team has their strengths and it is in finding the forte of each team member and developing that strength that Irene considers a measurement of her own success.
RiA: Given that 2020 was a lot about health and personal care, how did this impact your performance during the year?
Irene: The sudden outbreak of Covid-19 has made 2020 an unprecedented year that has impacted each and everyone’s lives and almost all businesses. We were fortunate to be allowed to operate during the circuit breaker but there was a significant decline in footfall in our stores.
As a diversified retailer operating in categories across health, personal care, skincare to makeup, there has been good growth in health and personal care categories fuelled by consumers who are being more conscious of their health and personal hygiene. These are noticeable from the surge in vitamins, minerals and supplements as well as anti- bacterial range purchases respectively. However, makeup and skincare categories are negatively impacted with more people opting to work from home and hence reduced the need for such products, particularly with sun care.
With most preferring to stay home or are discouraged from going out, it has led to a change in consumer buying behaviour that has contributed to an exponential growth in our eCommerce and thereby accelerated the speed of digital transformation. Even pre- Covid-19, Watsons has the vision of becoming the undisputed multichannel retailer in health and beauty and we have been investing to grow our online business since the start of 2017. We are thus able to capitalise on our strength in this area and mitigate some of the negative impact from the hit on our physical stores.
RiA: Have you seen any new trends emerging from new consumer behaviour?
Irene: Covid-19 has left a deep impact on the consumers and caused a shift in buying behaviour and sh
opping habits. Personal and healthcare products have shown a significant uplift in sales and we believe it will endure beyond this pandemic. Vitamins, in particular Vitamin C and immunity supplements, have seen a surge in demand as staying in the pink of health to avoid the need to visit the doctor is a top consideration for many consumers.
There has also been an increased awareness to maintain hygiene, at a personal level as well as at home, to reduce the chance of infection. This has created a spike in the demand for personal and home care products that is related to Covid-19 which includes hand sanitisers, thermometers, alcohol swaps and anti-bacterial products.
With the authorities’ guidelines on compulsory mask-wearing and consumers’ trust in the quality of products that Watsons carry, we are seeing steady sales of surgical masks (including kids’ masks) across all our stores islandwide.
However, prolonged wearing of masks has also brought about another problem maskne, which is acne caused by the sweat and heat trapped under our mask, making it an ideal environment for bacteria to grow and multiply. Hence, acne prevention and cure products have also seen an increase in sales.
DIY products such as do-it-yourself hair treatments, facial masks, hair colouring have also recorded a steady growth as consumers take to self-care given that they have more time at home.
Consumers are gravitating towards a shopping experience that is contactless –contactless payment, virtual try-on of makeup or hair colours. Watsons has expanded our self-check-out counter to 49 stores islandwide and has also recently provided Scan & Go service piloted at 4 stores (Funan Mall, ION Orchard, Paya Lebar Quarters and Income at Raffles) in catering customers’ demand for such contactless and seamless payment mode.
Our Watsons SG app has also incorporated ColourMe in-app function which allows customers to try on different shades of lip colour, foundation, eyeshadow to even hair colour – all virtually, and can purchase these products directly from our eStore with just a few convenient clicks.
RiA: Why focus on reducing plastic bags use?
Irene: Watsons issued close to 13 million plastic bags in 2019, which prompted the need to act and do its part for the better of our community and the environment we live in. Prior to the newly launched #SayNoToPlasticBags campaign, Watsons has taken dedicated steps towards building a sustainable world of living by introducing HDPE plastic bags in stores made with 10-15% recycled plastic content, which Watsons will be increasing to 50% by Q1, 2021.
Every bit helps and the important thing is to take action. The more retailers jump onboard to promote bringing your own bag a habit, the more people will do away with single use and bring a recyclable bag with them wherever they go. We find plastic bags an easy change that everyone can start with.
This is but the beginning of our commitment towards sustainability, as a corporate citizen.
RiA: What does Watsons aim to achieve as its goal and by when?
Irene: Watsons aims to reduce the consumption of plastic bags by introducing Bring Your Own Bag (BYOB) every Tuesday starting from 1st December 2020 to all our 100 stores islandwide. We are also looking to expand the number of BYOB days by 2022.
Our frontline staff will first check with the customers if they have brought their own reusable bags. Should customers not have one, they have the option to purchase a Watsons non-woven recyclable bag, made of 100% polypropylene and priced at $1.20, to bag their purchases which can be used for their next shopping trip too.
Alternatively, they will be charged $0.10 for every transaction involving a request for plastic bag(s), and 100% of proceeds from the bag charge will be donated to support World Wide Fund for Nature (WWF-Singapore)’s conservation efforts, including critical projects related to reducing plastic in nature. With this initiative we hope to reduce the use of plastic bags by 600,000 pieces in the first year.
RiA: What is the material used for the non-woven reusable bags launched in end-October?
Irene: Watsons non-woven reusable bags are made of 100% polypropylene, a recyclable plastic fabric.
Non-woven polypropylene is a practical fabric as it is strong and extremely lightweight and hence convenient to carry around. As polypropylene material is inexpensive to ship, the making of these reusable shopping bag alternatives also leaves a smaller environmental footprint.
RiA: How is Watsons working towards the circular economic model as mentioned in terms of their front to back-end operations?
Irene: The circular economy emphasises on minimising waste and maximising resources by doing away with the traditional “use and throw” model and keeping resource in the economic loop, away from the environment.
Watsons’ newest #SayNoToPlasticBags campaign aims to abide by the circular economic model through minimising plastic waste and plastic bags consumption through these customer-driven initiatives:
a. Gearing up to reduce plastic consumption by using HDPE plastic bags with 50 plastic recycled content by 2021, up from the current 10% -15%.
b. Implementation of BYOB Tuesday, starting on 1st Dec 2020 across all 100 stores islandwide, and eventually include more BYOB days, where $0.10 will be charged each transaction with plastic bag(s) request on Tuesdays and 100% of these proceeds will be donated to support WWF-Singapore’s conservation efforts, including critical projects related to reducing the consumption of plastic in nature.
c. Launch of the reusable non-woven recyclable bags made of 100% polypropene material and special edition reusable LINE FRIENDS rPET tote bags made of 100% recyclable plastic.
In terms of back end operations, Watsons has looked into the use paper from recycled sources or responsibly managed forests. Currently, all the carton boxes collected are 100% being recycled as part of Watsons’ current CSR practices. Aside from plastic and to ensure that all resources stay within the circular economy, all collected used boxes are also sold by waste disposal partners entirely to buyers as a feedstock after necessary recovery process for the fresh production of new paper or boards. None of these boxes are being incinerated or dump into landfill.
We have also moved 90% of our printed catalogues to digital catalogues now in our bid to reduce the use of paper in the course of our everyday business.
RiA: How is Watsons helping consumers make better and more sustainable choices?
Irene: To help customers make better and more sustainable choices, Watsons advocates consumer to look out for the 4 key attributes – purchase refills, opt for products with better ingredients and packaging and products which meet stringent clean beauty requirements that promote sustainability.
Since January 2020, Watsons has banned the sale of any brands with rinse-off cosmetics and personal products that contain microplastics. Watsons’ own brand of products also have to abide by other sustainability areas, which include the use of responsibly sourced paper products (such as FSC-certified) and palm oil (RSPO-certified palm oil), thereby offering more sustainable choices to customers.
In addition, the range of Clean Beauty brands available at Watsons also promotes better ingredients and sustainable business practices. The brands included in the Clean Beauty line are free from unwanted ingredients and play responsible community roles by upholding ethical business practices and are committed to sustainable sourcing/buying initiatives. These Clean Beauty brands also work towards creating a positive impact on the environment by minimising waste and greenhouse gas emissions; using only sustainable paper from responsibly managed forest as well as sustainable palm oil from responsibly managed palm oil plantations.
RiA: Are there any upcoming initiatives / plans from Watsons that we can look forward to in the coming year(s)?
Irene: Joining over 450 brands worldwide, Watsons’ parent company, A.S. Watsons has signed as one of the signatories of the New Plastic Economy Global Commitment. This initiative unifies the global value chain behind a common vision for upstream solutions, supported by action-oriented targets for sustainability.
In respect of this, Watsons’ plans for 2030 on the environment and their commitments are as follows:
Eliminate unnecessary packaging by avoiding over-packaging and phasing out PVC
Targeting to use a minimum of 20% recycled plastic content in plastic packaging by 2025
Promoting and encouraging the use of packaging that is more recyclable or reusable
100% OB paper products to be made exclusively of sustainable paper (FSC, PEFC or recycled paper)
Increase the number of OB formulated products containing RSPO-certified sustainable palm oil
Reduce our absolute greenhouse gas emission by 40% vs 2015 baseline
Assess 50% of purchases from OB suppliers located in high-risk countries with respect to the environmental sustainability risks under the Business Environment Protection Initiative (“BEPI”) of amfori.