In July, Watsons opened a new concept store at U-town Lifestyle Center in Beijing. Watsons is a health and beauty retailer, and they have chosen to use a department store layout to attract customers to their new location. Instead of a traditional pharmacy-style design with all the products on shelves, the new store has separate sales areas to display each brand. 

The decision to open the concept store came out of market research using a customer survey. Watsons says they will continue to make adjustments to their business in the future to ensure they meet the needs of their target market. This highlights the importance of market research in order to understand consumers, especially for a foreign firm operating in China. Market research should not only be conducted when the brand first enters China, but on an ongoing basis. Please see our previous article on Brands at Labbrand - Market and Consumers Insight. 

Although Watsons provides both health care and beauty products, many customers still perceive the brand as a pharmacy. This could be a result of Watsons green logo with white letters and their bright store interiors with orderly shelves, all characteristic of pharmacies in China. 

The new store design which resembles a department store should help change consumer perceptions to see Watsons as a beauty products retailer rather than a common pharmacy. Watsons is optimistic that the financial crisis will not dampen women’s pursuit of beauty in China, and they hope their concept store will help them capture this market.