06_Asia_Customer_Loyalty_PrereadPublication

2025 H&B Asia Customer Loyalty Discussion Apr 2025

Background of BU Loyalty Program

TWN

SGP

MLY

THA

PHP

IND

VNM

TUR

Start of loyalty program launch date

2008 Jul

2009 Jul

2010 Sep Touch & Go 2013 Dec

2009 Jun

2018 Sep

2018 Jan

2019 Jan

2014 Jun

10,000 VND = 1pt 0.1-0.9 pt, round up to 1 pt

Watsons Card : P200 = 1pt

20,000 IDR = 1 points

2024 earn rate

every NT$1 = 1 pt every S$5 = 1pt

every RM1 = 1pt every 25baht = 1pt

every 1TL = 1pt

300pts = NT$1 (min NT$1, unless special promo)

1 pt = P1.00 (min 20pts to redeem)

20pts = S$1 (min S$1)

200pts = RM1 (min 2pt for RM0.01)

500pts = 50 baht (1PT=0.1 Baht)

100 pts = 1TL (min 1pt = 0.01 TL)

2024 burn rate

1 Point = IDR 100 100 pts = 5000 VND

Point Value (Lccy) (1pt = how much) Point Value (HKD) (1pt = how much) 2021 issued point redemption % 2022 issued point redemption %

0.0033

0.0500

0.0050

0.1000

0.0100

0.0100

50.0000 0.017000

0.0100

0.000878

0.296000

0.008850

0.024000

0.001454

0.000005

0.002600

70% 71%

88% 83%

49% 53%

42% 36%

45% 51%

50% 48%

20% 15%

44% 64%

Remarks

Watsons card

2024 Provision % 2025 Provision %

85% 85%

90% 90%

70% 70%

70% 60%

85% 85%

75% 75%

75% 75%

75% 75%

2

BU Sharing

3

Taiwan

4

Customer Trends

Super-aged Society & Declining Birthrate

Customization Shopping Experience

Opportunities

Opportunities

Threats

Threats

Beauty x Health opportunity – health conscious in younger group and beauty seekers in elder group AI supported higher efficiency in store operation and HO work

•

Increase store productivity: newness, refit, space optimization, and relocation Continue investing in social and online

•

Declining population

Aggressive store expansion of competitors

• •

•

Rising operational costs & hiring difficulties

Online pure player’s investment

•

•

•

Sustainability: “eco - active” consumers increase

Rational Spending

Threats

Opportunities

Opportunities

Threats

Unstable global status Slowing non-food market momentum: less impulse buying & non-essential purchase

• •

Provide tangible evidence to sustainability claims “Go Green’ & “Sustainable Choices” project (leverage suppliers)

•

OB – value for money

• •

Higher cost of sustainable materials & certifications Lack of sustainable sources

•

CRM – good price and promotion; member experience and rewards

•

•

5

Source: Euromonitor, Nielson Shopper Trend, Kantar 10 Trends in TW FMCG Market 2025

Malina’Q1: What is Asia’s strategy in driving customer loyalty

Strategy of Driving Customer Loyalty

O+OR einforce

VIP System R evamp

Personalization U pgrade • Create digital-only product bundles and special offerings • Expand ebooking services(APP only) for in-store events, workshops, product demonstrations, and new product trials • Establish dedicated free shipping product zones with supplier-covered shipping costs • End-to-end CRM system – starting from Social touch points, to the Journey in Watsons with CDC 2.0 tagging optimization , AI-empowered content optimization and integrated digital marketing blasting, timely Interaction design (AIMAS) and result tracking combined with Commercial Inputs(OptimO)

• Co-create more WoW VIP member events with Suppliers and Brands • Create personalized spending milestones with targeted rewards at each threshold • Design VIP-exclusive eStamp Program , tied directly to both ATF and ACV

Member and Point Benefits

• Develop Lifestyle Scenarios for points application • Go-live Redemption Center – fun & diverse values, even with cross-over • involve Point Earn/Burn across shopping journey , such as post purchase check, ESG rewards and etc.

6

Malina’Q1: What is Asia’s strategy in driving customer loyalty

Fast Response to Market Changes • A daptive Market Intelligence, identifying emerging trends and customer preferences • A gile Newness Development , launching new offering based on feedbacks Enhancing the Overall Experience • C ollaborative O+O environment , where members can connect • C ontinuous Service Excellence • C ommunity Advocate Networking , creating word-of mouth momentum

ABC Member Loyalty Strategy

Creating Emotional Connections • B rand Exclusivity • B roader Impact through CSR and ESG , resonating with members' values • B espoke Member Experiences

7

Malina’Q2: What role does loyalty points play in this strategy

Enable Customers to unlock the compelling incentives and values in Watsons Points

Value Perception

Accumulated Motivation

Small Points, Big Impacts

01

02

03

Making Points Feel Valuable

Creating Desire to Collect Points

Empowering Minor Point Balances

• Exclusive Only-with-Points experiences : Some benefits can only be redeemed by points, not cash.7X points fly on Sundays, periodically adding on 20X points fly for specific categories • Exciting Redemption Options : combine with emotional rewards — free products, exclusive experiences, early access and etc..

• Milestone Rewards : Bigger bonuses when crossing thresholds (e.g., "Hit 500 points, get an extra 100 points"). • Gamification : Missions like “Shop 3 times this month, earn 300 extra points!”

• Point multipliers : Allow members to bet a small number of points for a chance to multiply them through games • Cash + Points : Provide PWP with Point plus Cash: at least 8 FMCG items per promotion period or Lucky Draw for any point use • Point Sharing/Donation : Allow points to be gifted, transferred, or pooled among family/friends — social value amplifies perceived value.

8

Singapore

9

How to drive customer loyalty in SG ?

Background: There is a s hift in Singapore consumers’ spending habits, prioritising cross-border travel and shopping over domestic spending on retail. This trend is driven by cost pressures and a desire for more affordable options abroad, with consumers increasingly opting for bargain hunting.

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Singapore strategy in driving customer loyalty Goal: secure and maintain the position as SG #1 Health & Beauty Loyalty Programme Elevate customer lifetime value by prioritising personalised experiences, fostering loyalty and consistently exceeding expectations

Convenience to the customers

Diversifying product categories

Focus on GOBE

Shortening express delivery time from 3 hours to 90 minutes Online expansion to Deliveroo, Redmart, Tiktok Shop Placing orders via store-assistance ie endless aisle Mobile app as the core for Watsons members, connecting offline & online

Focus on expanding viral Cosmetic & Skincare brands, and new range such as aesthetic beauty, pet products to

Prioritise Own Brand + Character range to serve as a key driver for own brand sales

✓

Attract new customers

Expand Private labels

✓

Cross and upsell to existing customers

✓

Increase CLV

Key KPIs: Member GOBE SP%

Key KPIs: Member Sales Growth %, New Members

Key KPIs: O+O Active Member SP%. app downloads, app logins

Personalisation

Turn Silver into Gold

Loyalty Rewards

• Leveraging on young seniors' stronger disposable cash, loyalty and spending habits

Targeted & personalised member campaigns to drive member reengagement, member lifecycle

Addition of GNC loyalty tiers to enhance member rewards

• Strengthen Jubilee Membership & recruit young seniors

Paid subscription model with enhanced benefits to ensure exclusivity

Tailored rewards for mature shoppers, focusing on cost savings and personalised experiences

• Ranging right for Young Seniors

Key KPIs: Members SP%, 3-months URM Active Rate%, New Members

Key KPIs: Member Sales Growth %, New Members

Key KPIs: Overall Member MSP%, Elite MSP%

12

Malaysia

13

14

WATSONS CLUB LOYALTY POINTS

Making it a habit & lifestyle for Members

More than Just Loyalty

Bigger & Stronger with Other Merchants

Ge

Making loyalty points more rewarding & lifestyle

15

THE BIGGEST REWARDS Most Merchant TouchPoint In a Membership Rewards Program With Malaysia Book of Records

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ASIA STRATEGY IN DRIVING LOYALTY Watsons Club Member

Acquisition

Retention

Elite

More than Just Loyalty - NFC Charm that can make contactless payment - for transit & parking

First Time Incentive

Redemption centre

Ge

Sub Club to boost repeat visit / transactions

Extra Points Rewards

Trending Limited Edition Card

Exclusive Events & Gifts for ELITE only

17

ASIA STRATEGY IN DRIVING LOYALTY From Points to Possibilities!

Members’ Retention: Points Exchange

To strengthen member loyalty and drive greater engagement in online-to-offline (O+O) interactions, How it works: Members can seamlessly convert their Watsons Club Points into credits within participating merchants' loyalty programs. Example: 1 Watsons Club Points = 1 Petronas Mesra Points

Ge

1,000 Watsons Points

Points Exchange

18

ASIA STRATEGY IN DRIVING LOYALTY Spend More & Get More Rewards

Elite Retention

RM30 OFF

RM50 OFF

RM120 OFF

RM1,000

Ge RM1,500

RM2,000

To enhance member loyalty and boost O+O member participation

How it works: Members who accumulate a spend of RM1,000 or more within 1 year will receive an online voucher in the Watsons App the next day. The voucher will be based on the tier the members have achieved.

19

Thailand

20

WTCTH Customer Loyalty Strategy

Strategic Objectives

New

Recruit

Recruit new loyalty members (online & offline)

Strengthen

Strengthen loyalty from base & VIP customers

Behavior-Based Trigger Campaigns:

Existing Member

Boost

Insight Driven/Boost engagement & drive revenue

Drive

All

Experiential benefits and Emotional loyalty

Drive Customer Loyalty

make a difference, stay relevant, and deliver true value.

RELEVANT Every interaction feels personal

BUILD EMOTIONAL LOYALTY Go beyond transactions

DIFFERENCE Deliver differentiated value

• Exclusive Product & Own Brand • Personalize service in Store such as

• Data-Driven Personalization

• Flexible Redemption: Create emotional satisfaction through redemptions e.g. Point Cash ,Point Donation • Lifestyle Partnerships That Truly Matter : Collaborate with lifestyle brands our members trust and use every day. • Beauty workshops & VIP access • Watsons Community: Build Online community for members • Seamless Experience: Make member sign-up and app usage smooth and simple. • Surpriseactivity & delight gifts

Behavior-Based Trigger Campaigns: • Leverage personalized CRM to boost member spending and reactivation. • Behavior-Based Discounts: Customers get special offers based on their actions and behavior. • Personalize in the App: Enhance user experience within the app through AI driven product suggestions, smart

eyebrow shaping, pharmacist consultations, OB specialists.

• Priority launch for NPD • Health & Wellness Brand partnerships

search, and tailored recommendations.

• Power relevance with omnichannel content — precisely timed, perfectly placed, personally delivered

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Loyalty points play a multi-dimensional role in driving behavior and emotion

1. Point for up sell & Build Engage Watsons Club Member

2. Point for Create Stickiness and repurchase

3. Tool for Collaboration Enabling co-campaigns that strengthen partner engagement

Point earn & burn / Benefit as cash discount / Redeem points for more joy of partners’ benefits to lifestyle reward program

Point transfer / Convert points program

Point + cash for discount / SWOP point for discount program

Behavior-Based Trigger Campaigns:

24

Philippines

25

WTCPH CRM 2025

PH STRATEGY ON DRIVING LOYALTY

ACTIVE RATE: 49.2% MSP: 60.0%

GROWTH LEVERS

GROW THE BASE

DEEPEN THE LOYALTY

BUY MORE

VISIT MORE

ACQUISITION

RETENTION REACTIVATION

EXISTING CUSTOMER NON-MEMBER

ACTIVE MEMBER Encourage upgrade to Elite

NON-WATSONS CUSTOMER

WHO

ACTIVE MEMBER with UPGRADE POTENTIAL

LAPSED MEMBER

Plus 1 Visit Strategy:

In-store recruitment

Media Placements

Plus 1 item strategy: Cross Category Offers

HOW & WHAT

Prevent churn through always-on and special offers

Stamp Program Second Purchase Reward Weekly Purchase Offer Member Mission

Strengthened Member Benefits Supplier Promotions and Partnerships

Push for Premiumization

O+O Takeover

CRM Innovation

Events and Activation

PROJECTS TO SUPPORT

Watsons Club Partners

Watsons Care Program

CRM Member Comms Personalization & Automation

Member First Campaigns: Thematic and Nationwide

27

ROLE OF LOYALTY POINTS IN PH STRATEGY

CREATE A MORE FUN EXPERIENCE.

MORE MEMBERS TO BUY MORE & MORE OFTEN

BUILD MORE RELATIONSHIPS

Points for gamified experiences via the app:

Incentivizes purchases, Acting as a data collection

Points as prizes in both Watsons and Supplier promotions. Earn points and Redeem points to pay for Watsons purchases both online and offline. Strengthens emotional connection via surprise and bonus points.

tool and customer engagement lever.

Member Missions Points Sharing Redeem Points from Partners App Pop-Up Game

Incentivizes desired behavior i.e product trial, channel usage, off-peak shopping and referral.

28

Indonesia

29

Driving Customer Loyalty WTCID 2025 & 2026+

Loyalty Build from Active Rate, MSP, and Points 1. Active Rate

Absolute Member Experience

Full Registration Campaign

Optimize Member Loyalty

Reactivation Campaign

“Active Member” Reward

Enhanced Winback Campaign

Incentive on Full Registration

Win Points in Every “Member Mission” Completed

Shop and Win, Spend More to Win, Flash Sale

Personalized Promo Blast by AI Tech.

100% Scale Up Incentive

✓ Check in On App ✓ Referral Program ✓ Gamification ✓ Social Media Challenge

Campaign

Now Target

✓ Scale up member

Automated – AI driven campaigns to reactivate Lapsers (P3M, P12M) and activate new member not purchase yet to accelerate conversion

✓

registration incentive : bonus point, free product or voucher ✓ Always on Store Incentive

2x/year - -

4x/year 2x/year 1x/year

Shop & Win Spend More Member Flash Sale

✓

✓

✓

Enabler: Purchase pattern analysis, segmented member, A/B testing

31

2. MSP Loyalty Build from Active Rate, MSP, and Points

Boost ATV (Average Transaction Value)

Signature VIP program

Drive CommPh Sales

75% Target for MSP at Offline

Elite Only perks to drive purchase

Exclusive Deals on Limited Times Only!

Win Loyalty in Our Community!

“Member Only” Deals Optimize by channel In-Store execution for Member Only Deals

Outstanding Benefit for Elite:

✓ Exclusive

✓ Exclusive Bundling ✓ Cross Category Selling ✓ Bonus Point

CommPh Deals

✓ Premium Gift ✓ Higher Point with Purchase ✓ Early Access to Promotion ✓ Holiday with Elite Ambassador

✓ Consistent

Reminder/Promo Blast to nearby members

Own Platform

Neigh. Mall 61% 75%

Comm PH 75% 85%

Dest. Mall 60% 75%

97% 98%

From: To:

✓ Optimize store execution

• MSP benchmark across store formats

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3. Points Redemption Loyalty Build from Active Rate, MSP, and Points

Reward, Gift, & Share with Point

Point-Based Campaign

Collaboration with Powerful Merchants

“Shop & Pay with Your Point” (Points as Currency)

Promote high-value Reward, Gift, and Share • Special point-based campaign in store and App with special reward to drive point redemption (e.g.: PWP with point, sharing point, donate point)

Lifestyle & Experience

F&B, Travel, Banking, and Wellness

• Movie Ticket:

• F&B:

• Fashion:

• Travel:

• Banking:

• Theme park: • Concert:

• Health & Beauty Clinic:

33

Vietnam

34

WVN CRM STRATEGY (2025-2026+)

2+ YEARS STRATEGY & ACTION

3-Months active rate 20.2% +3% pt YoY

Total member 416K +41% YoY

New member 93K +24% YoY

Member sale part 36.3% +2.8% pt YoY

O+O Total member % 7.6% +3.6% pt YoY

2025 BUDGET

Y2025

Y2026+ Make difference

Fundamental improvement

Recruit

Recruit

• Offline new member recruitment activation booth At stores, event/workshop collaboration with supplier at mall, lifestyle communities such as beauty club, running club • New member offer communication enhancement Thru social media, partnership communication exchange, flyer distribution, ecommerce delivery boxes

University and office tour Collab with supplier to organize offline activation at schools, offices for free skin check, free sampling, special gift for bill on top Digital new member recruitment Digital ads, new member exchange program with the other online app partners such as e-Wallet, banking, ride hailing

•

•

Retain

Retain & member love

• Watsons fan club Build up a Watsons member community by facebook group/messenger to promptly inform special offer & promotion only for member • Strengthen Elite program Enhance Elite scheme offers: birthday, priority, member price, member day, referral program • Surprising privileges Surprising gift & promotion offers whenever earning xx points, workshop ticket, Watsons tour

• CDC & personalized targeting campaign Define members’ interest to offer the most relevant products with a customized flash voucher (limited time) • Burn point program enhancement Build a collab-program with suppliers for member burn point to get free products, special voucher offer

Member price competitiveness Increase number of deals and deal attractiveness: redemption PwP, gifts

•

36

LANDSCAPE & OPPORTUNITY

Health & Beauty Industry

Other Industry

Watsons

Guardian

Hasaki

Starbucks

Vietnam airline

40,000đ – 80,000đ = 1 point

10,000đ = 1 point x2 point for OB

Gain mile

Earn point

1,000đ = 1 point

1,000đ = 1 point

5,000 points = 50K voucher 3,000 points = 30K voucher 2,000 points = 20K voucher

>1,000 points = gift Or spa voucher 300K Redemption rate >10%

Gain point to receive the reward:

100 points = 5,000đ Redemption rate 0.5%

Gain mile to upgrade level: Silver, Titanium, Gold, Platinum, Million miler. Benefit offers: Discount, priority, extra baggage, waiting room service, extra miles

Burn point

1,000 points = *gift Redemption rate 1%

0-99 points: birthday promotion, B1G1 first 5 points

10% Off 12% first order in web/app (max 100K)

New member

30K Off

10% off in app (max 50K)

Reach 10Mil 100K voucher off 10% off (OB only) on Wed x15 point for birthday 50K Off x10 point for member x15 point for Elite 5% off (all products) on Tues 5% off (OB only) on Wed Flash sale 11%, 1 time/month

100+: Free drink for every 25 points

50K Off for silver, 100K Off for gold

Tier Upgrade

50K Off

Surprising offers

Bonus miles

Birthday

x2 point for member x3 point for silver x4 point for gold

Member day

Million miler only: Give 01 Platinum card to relatives in Family Account

Member price Top spender reward 3 rd party partner privileges

500 Special deals Workshop 3 rd party partner privileges

Special gifts at stores Special spa voucher

Surprising offers

Privilege

37

LOYALTY OFFER

CURRENT

FUTURE

10,000đ = 1 point x2 point for OB

10,000đ = 1 point x2 point for OB

Earn point

OnePass

100 points = 10,000đ Redemption rate 1% Exchange 500 points = Gift/Voucher

100 points = 5,000đ Redemption rate 0.5%

Exclusive voucher only for Watsons members

Burn point

10% Off 12% first order in web/app (max 100K) 50K Off x10 point for member x15 point for Elite

10% Off 12% first order in web/app (max 100K) 50K Off x10 point for member x15 point for Elite

New member

eStamp

Birthday

Reach 10Mil 100K voucher off 10% off (OB only) on Wed x15 point for birthday 5% off (all products) on Tues 5% off (OB only) on Wed Flash sale 11%, 1 time/month

Flash sale 11%, 1 time/month

Member day

Reach 10Mil 100K voucher off x15 point for birthday

Elite Upgrade

Priority Referral program Workshop, travel tickets Member price Exclusive box by Watsons 3 rd party partner privileges

Member price Exclusive box by Watsons 3 rd party partner privileges

Privilege

38

Turkey

39

WTCTR- Driving Customer Loyalty

It is built through powerful rewards, beloved brands, breakthrough campaigns, and emotional connection.

Watsons Club

Brand/Category Festivals

Enhance GOBE Brands

Customer Love Score Driven by right service, emotional connection, and consistent delight.

VIP Program & Special Offers

Strategic Brand Investment & Focused growth on key brands

Spotlight periods for hero brands & key categories

•

•

•

•

CRM Programs

•

Win-back, Birthday, First Time Buyer

Coty (Rimmel & Max Factor) , Deborah, Frudia, Nyx, Pure Beauty, Unfilter Beauty, Revolution, Watsons

Hair, Skincare, Sun, Makeup Festivals

•

•

•

MMP & TMPS

Price Point Project (Own Brands)

•

•

Supplier Campaigns

•

Point Boost Campaigns

•

Automated Customer Journeys

•

40

Spend on Loyalty Points

KEY MECHANISM

2023-2024 YEARS

every 1TL = 1pt

EARN RATE

• Base (Lifetime) Points: 56% of total accrual • Bonus & Manual Campaign Credits : 44% of total accrual

Total Accrual 350M TL worth

REDEMPTION

100 pts = 1TL

2 years min 1 yr; max 2 yr

• 2025 Strategy;

VALIDITY

✓ Bonus & campaign point allocation increased to boost engagement & loyalty

Share increased ~ +0.4 point

• •

Budget increased 112%

• 2024 - 2025 Strategy;

Redemption 228M TL worth

✓

Redemtion Rate Forecast: 72%

BONUS & CAMPAIGN POINTS

RR: 65.3%

VIP CUSTOMER POINT BOOST

41

Driving Customer Loyalty Strengthen customer loyalty by increasing personalization, emotional engagement, maximizing point value realization, and driving long-term retention. Flash Loyalty Points WRCTR - Key Loyalty Point Campaigns of 2025 Focusing on frequency, lifetime value, and acquisition to build a stronger, more engaged customer base.

Beyond Purchase: Rewarding Behavior

Spend Now, Earn Tomorrow, Redeem Points Within 3 Days

Point Boost Campaigns

Every interaction is a chance to earn — not just when they buy. (Points for reviews, app engagement, feature usage etc.)

Spend & Save MMPs

Seasonal multiplier campaigns (e.g., 7x) to trigger fast purchases & customer acquisition

Drive redemption via time-bound O+O MMPs to drive urgency and deepen engagement .

Point Boost Campaign trigger to use CCE Feature SAMPLE USECASE

IMPACTS

Bigger Baskets

• • •

50% of participants used this feature first time

•

Future Traffic Boost

Passive User Reactivation • 20% Win-back Impact in Q1

91% ATV increase

• •

1.187K incremental sales

Manuel process in place. Reward mechanics enhancement to automate ROOM to GROW

Opportunity to Enhance Value Streams

42

Next Step

43