Younger Shoppers Flock Back to Physical Stores, Seeking Tactile Experience

AS Watson's CEO Malina Ngai attributed the company's success to its ability to adapt to changing consumer behavior, particularly among younger generations. According to Ngai, younger customers are increasingly venturing back to real-world stores, seeking a tactile experience with products. This shift is evident in AS Watson's performance, with the health and beauty retail giant reporting a significant increase in foot traffic and sales across its nearly 17,000 outlets in 31 markets worldwide. Financial details reveal that AS Watson's revenue has grown steadily over the years, with a notable surge in recent times. The company's revenue has increased by 15% year-over-year, driven by the success of its main drugstore brand, Watsons. The brand's popularity can be attributed to its ability to understand and cater to the evolving needs of its customers, particularly in Southeast Asia, which Ngai described as one of the company's growth engines. Market impact and context suggest that AS Watson's success is not isolated to its own performance but also reflects broader trends in the retail industry. The shift towards experiential retail, where customers seek immersive and engaging experiences, is gaining momentum. This trend is driven by the increasing importance of health and wellness, as well as the growing influence of social media on consumer behavior. AS Watson's history dates back to 1841, when it was established in Hong Kong, a year after the British took over the territory. Over the years, the company has evolved to become a health and beauty retail giant, with a presence in mainland China, Malaysia, the UK, Turkey, and Ukraine, among other markets. Despite its long history, Ngai emphasized the importance of staying relevant and forward-thinking, citing the company's medical scholarship to Sun Yat-sen, who later led the 1911 revolution against the Qing dynasty, as an example of its commitment to innovation and social responsibility. The company's ability to adapt to changing consumer behavior is a key factor in its success. Ngai attributed this to its understanding of its customers, particularly in Southeast Asia, where consumers are young, digitally-savvy, and conscious about health and beauty. To cater to this demographic, AS Watson has rolled out campaigns such as Kaw Kaw, which has been successful in engaging young customers and driving sales. Looking ahead, AS Watson is poised to continue its growth trajectory, driven by its ability to understand and cater to the evolving needs of its customers. The company's commitment to innovation and social responsibility will likely remain a key factor in its success, as it navigates the increasingly complex retail landscape. As Ngai noted, "Heritage gives us credibility, so people trust us, but only if we stay relevant will we be able to stay alive."