Need for speed: Watsons aiming to implement on-demand delivery services across 75% of Singapore stores in Q1

In January, Watsons Singapore announced that it had entered an exclusive partnership with Amazon Singapore, which enabled them to offer its customers two-hour same-day delivery.

That same month, Watsons introduced Click & Collect Express, which allowed online orders to be collected in-store within four hours, as well as Home Delivery Express, which offers delivery within three hours.

Watsons Singapore has been spurred by the shift in consumer expectations over the past two years. With the surge in on-demand deliveries of food, groceries, and parcels, it understands that consumers are growing intolerant of longer lead times.

“In today’s world, many customers are looking for instant gratification – no less even for online orders. With the onset of the pandemic, this trend for express delivery has been expedited as certain products are needed on an urgent basis, such as fever-related health items, antigen rapid test kits, just to name a few,”​ said Irene Lau, managing director of Watsons Singapore

These great expectations bring about their own set of challenges, including delivery and logistic costs, making the choice of logistics partners a key factor.

“Watsons also focuses on [a partner] that is more holistic, where they have the competency to manage rising cost, more demanding customer service requirements and the ever-changing supply chain complexity that is induced by new technology adoption,”​ said Lau.

“With delivery manpower crunch, it’s important that we work with partners who are experienced and have sufficient resources to manage express deliveries. This is why we have partnered with parties like GrabMart, Panda Shop and most recently Amazon, all of whom have demonstrated their abilities to fulfil the needs of the customers speedily.”​

The collaboration with Amazon Singapore allows Watsons to leverage on a wider consumer network and also improve its logistical capabilities to strengthen its last-mile delivery services.

“Consumers can now enjoy two-hour delivery services on Amazon Singapore or three-hour speed delivery on Watsons Online. The three-hour speed delivery service is currently available to residents who live within a three-kilometre radius of nine Watsons stores... The service will be implemented progressively across 75% of Watsons stores islandwide by end-Q1 2022,” ​said Lau.

Retailers also have to consider how this will impact the availability of goods.

“It is critical that the inventory is kept up to date in order to meet the demands of our customers. Watsons has invested in an inventory management system where product replenishment takes care of both the physical and online customer orders. This allows us to meet the demand of fast-moving products in a timely manner,”​ said Lau.

The company has also made investments in its technology and automation capabilities with the aim of simplifying processes at the distribution centres and automation for better productivity help contain the cost of fulfilment to the end consumers.

Lockers and drones

With high expectations, the demand for faster deliveries will only grow in the coming years no matter how many challenges companies face.

In the near future, Lau expects existing services like delivery lockers and in-store pick-ups to proliferate as retailers adapt to these new expectations.

“We can expect to see more public delivery lockers install in multiple locations closer to housing areas and the central business districts that will usher in contactless methods for users to unlock and retrieve their parcels. We will also see more retail outlets like supermarkets, convenience stores or even a retailer like Watsons as an order consolidation or pick-up point.”​

She also does not rule out a future with deliveries made by unmanned aircraft systems.

“We do not dismiss the possibility of using drones or robots to make deliveries in the future. These automated solutions are already in place and in their initial testing stage by several firms such as foodpanda and NTUC.”​