E-commerce sales to hit ¥21 trillion in 2018
Nomura Research Institute has revised forecasts upwards for e-commerce sales, now suggesting a market of ¥20.8 trillion in 2018 for BtoC e-commerce. This is up from an estimated ¥11.5 billion in 2013, an annual average growth rate of 12.6%. Key growth categories will continue to be fashion, food and health/beauty, with more focus on genuine and increasingly seamless omnichannel retailing over simply trying to encourage traffic to stores through Online to Offline (O2O) marketing. Although Nomura sees showrooming as an ongoing problem for many retailers, better e-commerce options operated by the retailers themselves will at least keep many transactions in-house. At the same time, it also sees a rapid increase in individual e-commerce merchants thanks to the plethora of new services that make it easy and cheap to set up a store online, such as Zozomarket (see Page 8).
Aeon to open 155,000 sqm SC in Wakayama, Takashimaya to close
Aeon will tighten its control of Western Honshu with the opening of a major new SC in Wakayama City next March. The Aeon mall will be located adjacent to a new city park, creating a new city leisure zone. Boasting 155,000 sqm and 69,000 sqm gross leasable space with 210 tenants, 60% of which will be new to Wakayama prefecture, the mall is likely to dominate the city and the surrounding region. A 10 screen cineplex will also be included along with a 1,000 seater food court. Wakayama has already seen a series of major retail closures. The hub of the city’s commercial district used to be the Burakuricho Shotengai but this is now largely shuttered. A host of major stores like Daimaru and Vivre have also closed. With Osaka and surrounding shopping destinations much easier to reach thanks to improved roads and other transport links, local retailers have struggled, although Wakayama Station still includes a Kintetsu Department Store and the Wakayama Mio SC. Takashimaya, however, is closing its Wakayama store next August. The store, located within Nankai Railways building since 1973, has been posting losses for 10 years, and with Aeon opening, these were only expected to rise. Sales have fallen by two-thirds to just ¥2.1 billion.
@cosme hits 8 million monthly visitors and 11 million reviews
Top specialist cosmetics portal @Cosme has reached another milestone, hitting 11 million reviews last month. The site, which acts as a central depository of reviews and information on all manner of cosmetics and beauty items, is used by many women to get ideas on which cosmetics best suit them. The veteran peer-to-peer site is now in its 14th year, with reviews for more than 230,000 products and 26,000 brands. More than 8 million people visit the site each month. Although the site has ties with corporate sponsors, it is regarded as relatively independent because of the number of peer reviews. It also tries to engage users through tutorials on cosmetics use, tips, and information.
Hit Union acquires British firm, plans multi-brand strategy
Apparel firm Hit Union says it will find new growth through a multi-brand strategy and has just acquired a British business to help achieve this. Hit Union is best known for acquiring the British sports brand Fred Perry in 1995, which now accounts for 80% of its sales. Fred Perry is sold across 75 markets with some 120 stores, around 30 in Japan. Hit Union also used to be the apparel licensee for Puma, but lost this business in 2005, decimating the company’s sales. Although it retained a 35% stake in Puma Apparel Japan, this business was dissolved by Puma in 2010 and Hit Union now has no interest in Puma’s Japanese operations. To reduce its dependence on Fred Perry and recover some of the lost turnover, Hit Union acquired a traditional British apparel firm called Lavenham Leisure in September through Fred Perry Holdings. Lavenham is best known for its quilted jackets based on its heritage as a purveyor of equestrian and country lifestyle clothing. Japan is already Lavenham’s biggest market outside the UK, making up 80% of exports, and Hit Union has plans to create a new lifestyle business in Japan based on the Lavenham brand.
Tamagawa Takashimaya update starting next month
With more competition nearby, Toshin Kaihatsu will carry out a major new refurbishment of its key Tamagawa Takashimaya SC over the next nine months, prior to the East Futako-Tamagawa Regeneration Project starting in 2015. A key development at the Takashimaya SC will be a new annex called Ivy Place which will open in March. Headline tenants will include Ron Herman which will relocate from the main SC into a larger space across four floors, the largest store for the brand in Japan and reflecting its popularity in this Tokyo suburb. A further 10 new stores will open this Spring including upscale stores like Banana Republic, Estnation and MM6 Maison Martin Margiela. The main building roof will get a new children’s play area called Kids Garden complete with a small hill and wooden decks. An overhaul of the ageing SC exterior will also be completed by the end of the summer using wooden panels, green colouring and foliage.
Prada opens first Church’s flagship in Japan
Prada Japan opened the first Japanese flagship for its British high end shoes brand Church’s. The store, located in Omotesando, comprises 100 sqm over two floors and sells accessories as well as shoes. To celebrate the brand’s 140th anniversary, special edition blue velvet slippers are on sale for ¥50,000. Prada acquired Church’s in 1999 and has since opened stores in Europe, the US and other parts of Asia.
Sonia by Sonia Rykiel launches in Japan
From this Spring, Onward Holdings will introduce the Sonia by Sonia Rykiel brand to Japan. The diffusion line was introduced in 1999 and has 40 stores around the world. The first Japanese stores are in Seibu Shibuya and Tobu Ikebukuro. Prices of between ¥30,000 to ¥90,000 for dresses and skirts and ¥50,000 to ¥100,000 for coats are planned.
Seria sales rise 9%
Seria, the most design forward of the 100 Yen chains, saw sales rise 9% in 1H2013, helping operating profit rise 20% to ¥4.4 billion. Seria has benefited from the success of its Color the Days format, a store that emphasises design in both store fit and product, as well as the introduction of a new POS system which has helped with inventory management and supply chains. Planning teams now have access to live store data, making it easier to restock top sellers and design new items. During the half Seria opened 47 stores and closed seven, with a net 1,055 directly operated stores and 87 franchises. Full year sales are expected to hit ¥107 billion producing an operating profit of ¥9.3 billion.
Mitsui to open first outlet mall in Hokuriku
The first outlet mall in the Hokuriku region will open in 2015. Owned and operated by Mitsui Real Estate, the 150 tenant mall will be located near Oyabe City in Toyama Prefecture. This will be Mitsui’s thirteenth Outlet Park SC. Mitsui has located the mall near Route 8 but is also expecting that the completion of the Hokuriku Shinkansen – one of the last regions of Japan to get a bullet train link – will boost traffic from further afield including tourists attracted to the region’s famous cultural centres. As well as major brand names, Mitsui will also include local food and craft shops.
Isetan-Mitsukoshi to open popup store in New York
Isetan-Mitsukoshi will open a pop up store in New York next month for just one week. Called Nipponista, the store is being used to promote Japanese fashion designers and is part of METI’s Cool Japan project which has just been allocated additional funds. The store’s operation will be timed with New York Fashion Week with a party also planned to match influential US buyers with designers. 45 artists and designers will be on show including up and coming designers like Mint Designs, Theatre Products, Yokochan, and Facetasm, as well as big names like Kansai Yamamoto and Yohji Yamamoto.
Shin Osaka station gets new shopping zone
Shin Osaka station opened a refurbished shopping zone called Stek!a last month. The space includes a large Uniqlo store among other fashion and accessory stores. The new space is part of a bigger redevelopment of the station which will complete in 2016. The second phase will be completed this summer including a books and media shopping zone. The third phase, due in 2015, will include a gourmet zone and the final phase a souvenir space. In total the completed shopping area will run to 6,000 sqm with 70 tenants.
Isetan-Mitsukoshi to launch new catalogues for seniors
Following the opening in October of MI Plaza, Isetan-Mitsukoshi’s first select shop for seniors (see JC1310), the retailer has confirmed plans to launch new catalogues for women in their 50s and 60s. The department store group already has two catalogues, Sage and Jiko, but despite cutting back catalogue distribution it has been encouraged by improved sales thanks to links to TV shopping campaigns. In May it will launch ‘I’m’ to complement Sage and Jiko with all three catalogues managed by the same merchandising team.
Sports apparel market up 2.5%
Yano Research estimates the sports apparel market will have increased in size by 2.5% in 2013 to ¥515.8 billion. Although ski related apparel languished, track & field and running apparel sales were strong, with shipments up 7.5%, and growth in most other categories too. Participation in sports has increased as part of a fitness and health boom in Japan although the long unbroken heatwave over the summer through to October hit sales of A/W product.
Tablet use soaring
Only three years after the introduction of tablet computers, more than 5 million were sold in Japan last year, up 66% and already a third of the sales of all desktop and notebook computers. Most tablets are being bought at the major consumer electronics (CE) chains, with Yamada Denki alone believed to have a market share in double digits. The three big mobile phone chains come second – although all three also have their own sales teams in larger CE stores. Despite the growth in free Wifi services, especially in the larger cities, mobile phone providers still manage to sell 40% of all tablets with cellular capabilities. This ratio is expected to drop in coming years, and the ability to tether a tablet to a phone’s internet signal means buying a separate cellular capable tablet becomes even less necessary. The introduction of the iPad Mini led to a switch to smaller screen models taking up more than 60% of the market by the end of last year. Today around 93% of all households have a PC, and the penetration rate for smartphones hit 38% last year. Tablets are some way behind at 16%, but it is the fastest growing device segment. Businesses, notably retailers and showrooms, are adopting the devices rapidly too. According to one recent survey, tablets are commonly used for browsing the net, but for online shopping, online banking and watching movies, people still prefer to use their PCs.
Lumine to open pop up store in Yokohama
Lumine will open a 900 sqm store at Yokohama station in February. The store is at the west exit of Yokohama station fronting a construction site that is currently being cleared in preparation for the building of a new station shopping centre. The Lumine store will stay open until completion of the new building.
Seiji Tsutsumi passes away
Tributes were paid last month to Seiji Tsutsumi who passed away on 25 November. Seiji Tsutsumi was one of two half-brothers who inherited the Seibu Railways empire, himself taking control of the retail side of the business. Although never formally linked beyond blood-ties, Seibu was the first group to massively develop railway hub retailing, an innovation that made it the largest single retail group in the country by 1990. Tsutsumi was both an artist and businessman, an unusual combination that was arguably the source of his multitude of retail innovations, including the Parco shopping building concept, Loft variety stores, and Mujirushi Ryohin, a “non-brand brand” that now stands alone, but which was originally introduced as the very first private retail brand in Seiyu supermarkets. Unlike most of his retail pioneering peers of the 1970s and 1980s, Tsutsumi did far more than just import concepts from overseas, finding ways to innovate while maintaining a clear link to local culture, exemplified by the conversion of the dowdy Seibu chain into a mecca of modern design from both Europe and Japan. Tsutsumi stepped down from his position as group chairman in 1991 just as the then-called Saison Group was going into decline. All its major parts continue to operate in the hands of others, with Familymart part of Itochu, Seiyu owned by Walmart, Sogo & Seibu and Loft part of Seven & I, and Parco recently acquired by J Front Retailing. Mujirushi Ryohin remains independent, as does Credit Saison.
Radishbo-ya website renewal
Radishbo-ya, the direct-to-door organic and high quality foods retailer that is now owned by NTT Docomo with a minor shareholding by Lawson, opened a redesigned website in November. The company’s new CEO, Akiko Ide, who moved from a 30 year career with NTT, claimed that until now 70% of the company’s orders were made by customers filling in order sheets on paper, while 20% were placed by phone and only 10% online. The new website is designed to encourage more online ordering. It also adds options for subscription orders and allows customers to specify delivery days and times. The company also plans to offer more cooking advice, and to bring in ranges and products suitable to older customers. Despite Lawson taking a 10% stake in the company last year and having a growing interest in fresh foods for its convenience store chain, Ide insisted the relationship extended only as far as sharing logistics, with no plans as yet to sell Radishbo-ya products in Lawson stores.
Dreamy expanding customer base
Dreamy (www.dreamvs.jp), the online gal fashion retailer run by Yumetenbo, is to expand its customer base, offering new ranges of primary school and 30s fashions and accessories. It will double the number of brands it has on offer – all of them in-house developed lines. In addition to its own website, Dreamy sells well on Rakuten, Yahoo and DeNA but is best known for the very high ratio of mobile sales; around 70% of its current sales of ¥6.7 billion, a figure that has doubled since 2008, come from through its smartphone app. In December, the company added a new women’s suit brand called Luity, aimed at the 18-35 market, including accessories such as bags and shoes. It will now launch a plus-size line under the Plum Primo name this Spring, featuring casual clothing. Both brands offer more upscale pricing compared to the existing five brands. Two of these, Linosug and Mary Rose, will be merged in 2014. Later in the year, new brands will be introduced in both lingerie and for primary school girls. The new lines are each expected to sell around ¥500 million a year. Yumetenbo uses a direct sourcing, SPA model, and 80% of its in-house designers are aged below 30.
Takarajimasha to launch new fashion mags in 2014
Takarajimasha, already the biggest women’s fashion magazine publisher in the country, is to launch two new magazines this year, aiming to grab at least 30% of the entire market. The company’s two largest selling magazines, Sweet and InRed, sold around 300,000 copies per issue in the first six months of 2013 according to reports. Shueisha, which publishes MORE, Non-no and Seventeen, holds the next three spots in the magazine popularity ranking, but with significantly lower circulations. In March Takarajimasha will launch monthly editions of Sweet Otona Muse and Otona no Oshare Techo. The two publications have previously appeared as ‘mooks’ with respective circulations of around 160,000 and 70,000 copies an issue. As magazines they will both target older, richer and arguably more discerning 40 plus women. While the company’s current monthly magazine stable is a great success, its focus on young consumers means it doesn’t attract advertorial from companies looking to sell higher end products. It hopes the new magazines will attract a different editorial and advertising mix.
Ario Ichihara opens
Seven & I’s latest suburban shopping centre opened in late November, just a few kilometres south of Aeon’s groundbreaking new mall in Makuhari (see Page 4). The Chiba based SC is anchored by a large Ito-Yokado store (see JC1311), with a further 68 specialty store and restaurant tenants on the 123,200 sqm site, featuring 27,500 sqm of leasable space. The GMS anchor is 7,700 sqm and has an extended fresh fish department including live fish for immediate sale. Both Loft and Akachan Honpo, chains from the Seven & I Group, have large tenancies in the centre, and Ario Ichihara also features a 1,600 seater cineplex. It is the first of the Ario chain to have an open design, with customers able to stroll through the mall even when the stores are closed, a design already common at Seven Town, the group’s neighbourhood SC format. Seven & I is expecting annual sales from the SC of ¥13 billion, although the property might well generate far more. The biggest question is how well customers react to Aeon’s competing SC at the Makuhari hub.
Sanyo Shokai creates membership club for 100 Year Coat owners
Sanyo Shokai has launched a new, no charge members’ club for owners of its ‘100 Year Coat’ (www.sanyo-shokai.co.jp/100nencoat) – a high quality coat that comes in both men’s and women’s editions and retails at prices starting at ¥82,950. Members have access to a hotline to ask advice about cleaning and repairs to their long-lived garments, and Sanyo will arrange for services direct to artisan tailors at its Aomori factory for any repairs or adjustments. Services are charged, but include changing of button designs and minor size alterations. The coat, which went on sale to commemorate the company’s 70th year, is based on a design introduced when Sanyo first opened.
FOCUS: Leading shopping centres upgrade their way to 3.9% jump in sales in 2014-15
November 2015 News in Brief
Rakuten losing in online fashion
Consumer loyalty in Japan: loyalty programmes add value
Seven & I continues major overhaul of GMS and department stores
Lumine plans direct franchises with international brands and retailers
Mobile ads help reach 15 million young women
Itokin and Onward under pressure from changing market
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