Aeon’s SC expansion has been unprecedented in the last 10 years, so much so that new SCs pass in a blur. Aeon makes many claims for new malls, with each one presented as a the latest, mould-breaking new model, but in December Aeon will genuinely open one of the most important SCs in years in Okayama – a model for its planned takeover of station retailing across the country, making Aeon an ever more important partner for international and domestic brands and retailers in food, fashion, and the home.
Aeon Mall will open a shopping centre next to Okayama Station on 5 December. A sprawling 10 story building with almost as much parking as retail space, the mall will have over 90,000 sqm of sales space with 356 tenants. This is in addition to Aeon’s own GMS and a plethora of cultural zones including even a TV station and event hall. Already almost complete, the mall is vast, so big that several nearby buildings have been taken over just to handle the interviews for the thousands of staff to be employed there.
Okayama is not a thriving retail hub but it does rank 18th in retail sales among the top 100 cities (see JC’s Top 100 Markets report). Cross Company is based there and has a swanky new HQ; Tenmaya, the largest regional chain operating south of Kobe, is also there; and Daikoku Bussan is one of the regional supermarkets to watch. Otherwise Okayama is very much a regional city, quiet, serene and with the patches of decay that are common to hundreds of regional municipalities around Japan.
Okayama is though one of the bright spots, the gateway to Shikoku and the Chugoku region, and a city clawing in investment and tourism and, as a result, increasingly a magnet for migration from nearby towns and cities. For Aeon, it presents virgin, close to competitor free territory. Unlike these nearby towns, Okayama’s population will not contract over the next decade, and including the neighbouring Kurashiki and Soja, has a combined population of 1.3 million. As other cities fade, it will be the only major city on a 300km stretch of the JR West Shinkansen route between Kobe and Hiroshima.
Okayama is also ripe for change. Despite its stable population, retailing is limited. Tenmaya Department Store and its attractive shotengai offer a genteel shopping experience in the old centre. Tenmaya is busy upgrading its main store to deliver a more premium shopping experience, including top notch luxury brands such as Tod’s, to create a clear difference to Aeon, but there is no other significant retail centre.
Takashimaya’s store just around the corner from Aeon is ripe for closure, a drab building whose only value is as an immersive experience of Japan in the 1960s. Takashimaya’s response so far is to open in Aeon too, a food store called Takashimaya Food Maison – but it will likely close its main store or convert it to a shopping and dining space. The OPA store next door already closed last month and the adjacent Aeon-owned Vivre will close soon. The fate of the 10,000 sqm Sanyo Ichibangai SC which carries brands like United Arrows and Snidel is unclear, although it is hoping the increase in traffic to the area – the new hub for Okayama – will help float all boats.
The impact of Aeon Okayama will be huge and extend beyond Okayama. Located next to the station and the ramp from the highway, the mall has a premium feel to the design, and should draw shoppers not only from across the city but from towns and cities from quite a distance, further decimating local trade in neighbouring cities. Smaller Aeon malls of around 250 tenants have footfall of around 18-20 million a year and Aeon forecasts 20 million for Okayama, but this looks conservative as do the sales forecasts of ¥40 billion – the 60,000 sqm Tenmaya had sales of ¥48 billion last year.
Aeon Okayama will house 240 tenants that are new to Okayama and the surrounding region, and will appeal to a diverse market, covering the young women that frequent station buildings, as well as families and seniors. Key to its success in pulling in the younger crowd too will be Aeon’s capacity to retain the kind of tenants who would normally opt for a station or fashion building, and avoid Aeon’s more mass market family oriented image. Aeon has succeeded in signing them, but if these fashion stores don’t sell as expected, it will have to revise the model. So far though the line up looks strong with the street level alone offering the kind of retail entertainment only found in Tokyo and Osaka until now: Zara Home, Urban Research, R. Newbold, Ciaopanic, Freek’s Store, Takashimaya’s Food Maison and so on, with the likes of Charles & Keith and Zara on the second floor, and Tokyu Hands above.
For Aeon the new station focus marks a departure from its legacy bid for suburban and out of town dominance. While it has already opened station-based SCs, Okayama is the flagship model for the future, twinning the benefits of a station location with the scale of Aeon’s suburban SCs. Stations used to be the fiefdom of department stores, railway-owned station buildings and fashion SCs like Parco. Aeon plans to take their place.
Already other station SCs are being built, including Takasaki in Gunma and Asahikawa in Hokkaido. Aeon JR Asahikawa is located right next to the station near to Seibu which houses Louis Vuitton and other luxury brands, and will open next Spring with 47,000 sqm of sales space, and is being built in cooperation with the local government’s city revival committee. Plans also call for a new pedestrianised zone to encourage shoppers back into the centre in what remains one of the more prosperous cities in the northern island. Takasaki is Gunma’s largest city and Aeon will again take over the station area right next to Takashimaya and the 104 tenant Montres SC.
Aeon also continues to increase the number of slightly more premium station-based SCs near the capital. The latest to open will be Aeon Tamadairanomori at Toyoda Station in Hino in November. The 130 tenant 25,000 sqm SC will offer a generous amount of outside space, including a 150 sqm lawned play area it optimistically calls “Forest Garden”, that will be popular with shopping parents after school. As popular will be Picard, the French frozen food brand, which will open in Japan for the first time.
Aeon targets seniors through Grand Generation malls
Aeon introduced a new marketing strategy in 2011 called Grand Generation or GG for short. The aim was to develop retail concepts targeting the active retired market of dankai juniors aged around 55-70, including shopping malls. The first to open was Grand Generation Kasai complete with cafe, pet area offering pet birthday cakes, vast library like bookstore, travel services just for seniors from JTB, and special fitness club, but also a smoking room with sofas. Last month Aeon unveiled a new and improved version within its refurbished Yagoto Mall in Showa-ku, Nagoya where 35% of the population is over 55. The space includes a culture school offering classes in traditional Japanese arts and an event area offering concerts and seminars – Aeon has also issued a new store card called called GG card. Another Grand Generation mall is expected in the 150,000 sqm SC due in Shijonawate in Osaka in 2015.
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