Jared de Guzman
At the height of the COVID-19 public health crisis when RT-PCR testing facilities were bursting at the seams, health and beauty retailer Watsons Philippines stepped up to the plate by making available antigen test kits to lockdown-weary Filipinos.
“We were the first pharmacy to sell test kits,” recalls Jared de Guzman, Watsons Philippines customer director. “We were actually predicting that the testing facilities will not have enough channels to be able to test millions of Filipinos.”
The first batch of test kits ran out of stock right away.
Twenty years since setting up shop in the Philippines, Watsons, in partnership with leading conglomerate SM group, has established itself as a formidable player in health and beauty retailing. Growing its footprint to more than 1,000 stores and serving hundreds of thousands of customers each day since then, Watsons plans to open about a hundred more new stores every year while likewise maximizing digital platforms.
“During the pandemic, and then postpandemic, we have seen that customers have been taking their health more seriously,” De Guzman says. As Pinoys picked up the habit of taking vitamins and supplements since then, Watsons is both a witness and beneficiary.
“From people who are working in the office to call center workers having challenges with sleep, we’ve seen a lot of different challenges that customers have faced and we have the assortment to be able to help them have a more holistic wellness or lifestyle,” he says.
Since the pandemic, Watsons has also observed that Filipino consumers are buying less frequently but are buying either in bulk or in bigger sizes, in order to stretch their budget.
On food assortment, De Guzman also seeks to dispel the notion that healthy food is expensive.
“We want to make sure that every person has a chance to have healthier alternatives to snacks, healthier breakfast,” he says.
While it’s “fantastic” to sell beauty products to make consumers look good, as well as sustainable products “to make them do good,” De Guzman says it’s just as important to make consumers feel great.
“I think that is really the core because if you make that person feel great, the rest will follow. That person will naturally want to do good; the person will naturally want to look good because they feel great. They have a holistic aspect of wellness, so that really is the focus of Watsons.”
Broadening the market
When Watsons entered this market with SM group as partner, it was logical to start setting up shops first inside SM shopping malls. But malls have their own operating hours, while some essential items, like medicine, can’t wait.
As such, Watsons started developing standalone store formats and now has 300 community stores in high-density neighborhoods and business districts. Depending on the specific needs of the community, some of them operate 24/7.
Watsons has also teamed up with some hospitals to run their pharmacies, like at Medical City in Ortigas.
Asked whether it’s Watsons’ strategy to build stores from the ground up—without taking the franchising or merger and acquisition (M&A) routes like what others are doing—De Guzman says the thrust for now is to manage their own stores.
“I’m not saying that we’re not going to do [franchising or M&A], but for the meantime, our hands are already full with our own stores.”
“I think that’s the reason why you get that same level of fantastic service anywhere you go—it’s because it’s managed by just one entity. You’re able to make sure that the experience is consistent throughout the stores.”
Generics medicine
A Pulse Asia survey conducted in 2019—before all the job cuts and economic recession caused by COVID-19—showed that 99 percent of Filipinos could not buy their prescription medicines “because they are expensive.”
But starting 2014, Watsons launched the Watsons brand health portfolio.
“In a way, it’s generic but it is branded generics; that’s what we call it. And our Watsons brand health can actually save the customer up to 80 percent of the cost of their prescription medicine. So we really worked together with [the Department of Health] to make sure that our customers get the full prescription,” he says.
All Watsons products go through rigorous testing and make use of European quality standards, he adds.
Putting its brand on pharmaceutical products is something that is done by Watsons only in the Philippines, where prescription medicines and vitamins are procured through the pharmacy. In other markets, you have to buy them from the doctors while in others, insurance covers them, he explains. This is one example of how Watsons is localizing strategy while still being guided by a tried and tested regional system, he says.
Harnessing technology
To make its products more accessible, Watsons has two online platforms. One is the Click-and-Collect Express service, which allows consumers to order from the Watsons app and pick up their orders within 30 minutes.
The other option is Home Delivery Express, where the goods can be delivered straight to the buyer’s house within three hours. Having more than 1,000 stores across the country enables Watsons to deliver the goods swiftly, De Guzman adds.
“The good thing also about the Watsons app is if you’re a Watsons Club member, you can actually earn points and redeem your points there, which you cannot do with the other third-party providers,” he says.
The app also offers items that are not even available in the physical stores, like pet care products. It also has the “Color Me” function that allows users to scan their face and virtually try on makeup products.
“We have also seen that customers are now more educated more than ever and they really want a more personalized level of service,” he says.
Watsons’ largest store is called SM North Edsa The Grand—one with a selling space of 1,000 square meters. It is, by the way, also its 1,000th branch.
“When they visit North Edsa The Grand or even when they go to the Watsons app, we have a supplement finder,” he says. “You just key in your lifestyle [issues]—for example, ‘I’ve been having trouble sleeping or I want better immunity.’ The supplement finder will recommend a personalized way for you to arrange your regimen of supplementation.”
Watsons has also seen customers wanting to diagnose themselves, so at The Grand branch, it collaborated with Medical City to put up a machine that serves as a virtual clinic.
“It’s very high-tech. There’s a small machine there; it can hear your heartbeat; it can hear your intestines moving; it can hear your hearing, [check] your eyesight and the doctor is not even there. The doctor just tells you what to do.”
The doctor will give his diagnosis and prescription, which the customer can buy right away.
“So it’s a one-stop health [center],” he says.
Watsons is now studying to replicate this format for future expansion.
“So, normally a Watson shopper, when they come to the store, they think they’re just gonna buy paracetamol. You go to the store, you end buying more than you intended. Most of our customers are like that,” De Guzman says.
Citing its vast store network and digital platforms, he says Watsons is definitely where at “anytime, anywhere, you can buy health, wellness and beauty products.”