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Superdrug: planning for a multichannel future

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With online sales increasing by more than 60% in the year to 31 December 2016, Superdrug is clearly getting something right. The company attributes growth to “improved website functionality and enhanced delivery solutions… supported by best-ever availability levels” – but there is rather more to its success than that. Superdrug is owned by Hong Kong-based AS Watson Group (ASW) , which in turn is a member of CK Hutchison Holdings – a multinational conglomerate with global interests including ports and telecommunications as well as retail.

As such, the company has the financial backing to make major investments in digital innovation. In May 2014, ASW announced an initial investment of US$60m to “attract digital talent” to its eLab – an “in house digital studio” – with centres in Hong Kong, Milan and London. Key aims for eLab were “improving the mobile customer experience, rolling-out mobile apps, integrating social into the total customer experience, improving content, and expanding click and collect in most countries”. Two years on and the resulting mobile apps and greater use of social media have delivered not only that 60% improvement at Superdrug, but a 69% increase in ASW’s Asian health and beauty ecommerce business, and a 63% upturn in its European ecommerce cosmetics business.

It has also helped drive footfall to stores with a neat interactive delivery page on the Superdrug website that updates throughout the day giving cut-off times for free delivery or next-day click and collect. Last year, ASW recorded more than 2m downloads of its retail mobile app, while on Black Friday Superdrug was processing four orders every five seconds, with sales up by 103%. As Malina Ngai, ASW’s chief operating officer has noted: “What’s encouraging for us is that we are not only seeing high online sales growth but also seeing increased footfall in our stores combined with a high annual spend from our loyalty card customers who shop with us both offline and online.”

With more than 200 staff accelerating ecommerce developments, ASW’s eLab has more innovative developments planned with greater emphasis on customer relationship management and increased use of big data analytics on the agenda. According to Ngai: “We will continue to strive for technological innovation, such as product search by image and cognitive computing which are essential to being close to customers and meeting their fast-changing expectations. To stay ahead of the market, we keep harnessing technological developments to create a personalised and pleasurable online shopping experience for customers.”
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