How Superdrug is pioneering the phygital retail experience

British high street retailer Superdrug is part of the A.S. Watson Group, and currently serves 5.5 billion shoppers via tech-enabled retail experiences both offline and online.

A.S. Watson Group is the world’s largest international health and beauty retailer with 19 brands at present, and it takes digital channels and ecommerce seriously.

Pioneering an O+O (online + offline) omnichannel platform strategy, in 2014 the group launched Elab. This saw an international team working at the group-level to advise brands on digital marketing and ecommerce, and develop the company’s technology infrastructure – including its website, mobile apps and digital loyalty programs – across all markets.

For Superdrug, this meant mobile optimization for its ecommerce store and the later launch of a mobile commerce (mcommerce) app.

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In late 2022, Superdrug took O+O a step further when it became the first UK-based high street health and beauty retailer to launch its own online marketplace, an ecommerce experience that allows third-party brands to sell direct to Superdrug customers via Superdrug.com.

The marketplace model is a way for customers to shop new and emerging brands, and it is also a means by which retailers can rapidly expand product ranges without the restrictions that would come with doing so in a physical store or through their own products.

Speaking to CX Network the chain’s marketing and ecommerce director, Matt Walburn, says: “Marketplace was the natural next step in our digital transformation program. Our intention has always been two-fold; to promote diversity by supporting entrepreneurs and small businesses within the industry and to double the number of product offers available via Superdrug.com.

“We wanted to broaden and strengthen our beauty and health offering for our customers and also step outside of these categories to include wellbeing and lifestyle products that give our shoppers more,” he adds.

Superdrug wanted to ensure its health and beauty offering was accessible to its customers while introducing new brands and products that meet changing customer expectations in a way that stands out from the competition.

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Selecting brands to align with customer needs

The marketplace launched with 7,000 products from 300 brands, all catering to a different customer demand, from ethically sourced and vegan products, to sustainable toothbrushes.

Walburn says: “We have welcomed some great brands to the marketplace. As we have always said, our main focus has been to bring both established and exciting new brands to the platform, promoting diversity and inclusion within the industry.

“It is great to have brands such as UpCircle and Plantur 21 involved as well as being able to bring new brands such as Popbrush and Truthbrush to a wider audience. We want to continue adding more brands and product choice to the marketplace,” he adds.

Such brands will no doubt prove popular with Superdrug’s sustainability-conscious customers.

Earlier this year, CX Network’s own research found 50 percent of 550 CX practitioners have observed a growing awareness of ethical working conditions and sustainable products from their customers. In addition, 42 percent of these practitioners agreed that customers are becoming more conscious of sustainability, while a further 19 percent strongly agreed.

Walburn says: “We look forward to building the listings on the platform, bringing more and more products to our customers and being able to offer them an experience that currently is not available elsewhere.”

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Working with third-party suppliers

Consumers flock to brands that align with their values and expectations, whether those expectations are based on sustainability, price or other factors.

To ensure a consistent service and experience quality for customers, the Superdrug team has taken a hands-on approach to managing its growing stable of marketplace brands. It has established relationships with all those featured and meets with them to assess their popularity, service obligations and order fulfilment record.

Walburn says: “It has been very important for us to meet with each of the brands to assess and ensure that their products and ranges align with the Superdrug brand. We ensure there is clarity around the service levels that we require from sellers and that we are able to meet their needs too. By meeting with each of the sellers, we have been able to discover their stories and find out more about their founders and their plans around their ranges.”

There is another benefit to the marketplace approach, however. Superdrug has the agility to pivot to meet emerging customer demands, not by developing and launching its own products, but by simply adding new brands to the marketplace line-up.

Walburn says: “Having the opportunity to broaden our offering to customers will benefit everyone and will bring new customers to Superdrug.com. It also means that we can react to new trends quickly and attract new sellers that specifically meet the customer’s needs.”

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Using data to track seller performance

In the marketplace model, the performance of third-party suppliers is crucial to success.
Superdrug uses a range of data to keep track of performance at both the site and seller level. Walburn says: “We have various sources of information that give us an exciting picture on performance.”

The approach is similar to that taken by online luxury fashion marketplace Farfetch. It used the data gathered from customer and supplier interactions to create the Customer Experience Index (CXI). Active since 2021, the CXI tracks the progression or orders against customer satisfaction.

In addition to assessing how customers are enjoying Farfetch, the company can monitor the performance of its marketplace sellers by looking at whether orders are being processed quickly enough, if items arrive on time and, most importantly, how failures in these areas impact customer churn. Farfetch then works with the suppliers to troubleshoot any issues identified.

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The phygital retail experience

Superdrug’s O+O strategy has just as much of a focus on physical retail, as it does digital.

In 2023 the retailer plans to open 25 new physical stores across the UK and refit a further 70 stores. The new stores will focus on enhancing the physical shopping experience, offering customers a wider range of in-store beauty treatments and allowing access to healthcare services through pharmacies and nurse clinics.

The stores will also be developed in line with Superdrug’s sustainable store scheme, which focuses on waste management, energy reduction and eco-conscious building materials.

The retailer’s CEO Peter Macnab, says: “Recent years have seen seismic changes in our sector, and constantly evolving customer expectations. An investment of this scale demonstrates our resilience in the face of continuing social and economic challenges, but also our confidence and commitment to our customers and communities.”

Many of the big-name marketplaces exist exclusively online – think Amazon, Walmart and Alibaba. Superdrug’s marketplace move, however, is part of a much broader strategy. Through its sustainable products, sustainable store fitouts and the jobs it will create as a result, it has combined the need for instant, effective and convenient customer experiences with corporate social responsibility (CSR).