December 6 2014

Highlights December 2014

Highlights from JapanConsuming monthly report

News and Analysis on Japanese retailing and consumers

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Leading shopping centre sales rise 4.2%
Shopping centres had a great year in FY2013 thanks to higher spending on fashions, food and lifestyle goods. The top selling SCs fared much better than the sector as a whole, which was up 2.6% overall but down 0.5% on a like for like basis. The increase in spending before the tax hike on non-essential high ticket items such as fashion and the sharp rise in tourism helped lift station and other SCs at transport hubs. As a result JR-operated SCs made up nine of the top 15 SCs by sales densities. Aeon continues to dominate overall, and to such an extent that some consumers are now being dubbed Aeonists to describe the breadth of transactions with parts of the Aeon empire in work, rest, play, and even death.

Don Quijote launches Lidl-style chain to attack convenience stores
Don Quijote, the country’s largest discount chain, is launching a new format designed to take on convenience stores and mini-supermarkets. Using know-how gleaned from its acquisition of Nagasakiya, it is confident it has solved the problem of food distribution but will also sell apparel, toys and electronics too. The idea looks like a small version of Lidl, and original enough to appeal to the growing number of price conscious suburban shoppers.

Editorial: Japan’s not so brave, old world?

Try before you buy e-commerce launches with Matsuya as partner
A new app is helping retailers link customers with online shopping options, benefiting both the e-commerce operator and retailer alike, while helping customers try before they buy in a convenient location.

Isetan Osaka and Lucua plan unveiled – a trial for more small Isetan stores
JR West will unveil a new section to its Lucua SC at Osaka Station next Spring, taking over 30,000 sqm of sales space from Isetan-Mitsukoshi. The latter will no longer have a contiguous sales space of its own, forced instead to operate separate sales areas as small stores. Ironically, this may turn out to be great news for Isetan, helping trial its plans for a string of distinct small format chains. These will include accessories stores, and from next year even an Isetan Wedding chain.

Robotic fashion styling
Software which makes perfect recommendations to fashion consumers has been the holy grail of online fashion stores for years, but while recommendation engines have improved, this is largely based on the likes and dislikes of peers with similar purchase patterns. A new start up claims its solution offers much better accuracy, promising a new way for fashion brands to get in front of the eyeballs of Japanese consumers.

Seven Eleven: the donut issue
Seven Eleven began the rollout of new counter displays selling six flavours of donut last month. Although seemingly very minor news, this is so much more than just the latest merchandising idea from the country’s largest retail chain. The new idea not only complements the massively successful ‘counter coffee’ introduced last year, it also shows again how Seven Eleven will disrupt food and food service retailing. Seven Eleven is yet again pushing its rivals to make a choice between emulating the sector leader or continuing along a slower route to greater diversification. Everyone else selling donuts in Japan is in for a very rough time. What product category is next?

Targeting the over 50s
There are few large, dedicated fashion chains for seniors despite being the fastest growing market in terms of population. Leilian is one, but the firm has struggled to innovate, focussing instead on managing the transition in ownership from Renown to Itochu. Under the trading firm’s new lead it has spent the last two years revamping supply chains and is now beginning to launch more appealing brands to suit the modern mindset of today’s late 40s and 50s women. These stores include a large number of international brands, presenting new opportunities for fashion labels selling into this segment.

Yamada Denki: the community store
Yamada Denki’s efforts at building up online sales have been hampered by a high level of strategic inertia which continues to emphasise store-based sales. Now, leveraging its growing network of independent franchisees, Yamada plans to kill two birds with one stone, using the franchise network as a new sales arm to reach local customers and boost online sales at the same time, expanding sales not only of electronics but household goods, food and books.

United Arrows’ star waning?
United Arrows was the investors’ darling only nine months ago when new initiatives to increase demand tracking and to attract new groups of younger male consumers seemed to be making headway. Since April, however, customers are turning away from the brand, partly as a result of price increases 12 months ago, and the generally strong shift to lower prices by rivals on the one hand, and higher end stores targeting the new rich on the other.

Matsukiyo to introduce duty-free and EDLP formats
With competitive pressures building, Matsumotokiyoshi is looking to maintain its lead by introducing new store formats, expanding the range of non-prescription merchandise like cosmetics and household goods. The move comes in response to Aeon’s desire to consolidate its drugstore operations in the coming year, making it the largest player in the sector when all GMS and other non-specialty drugstore format sales are included. Matsukiyo will also join a host of other retailers in rolling out duty-free services aimed at tourists.

Adastria to merge Point and Trinity Arts in bid to find new growth
Adastria’s main Point subsidiary hit a wall in the last few years, with much slower levels of growth after a decade of rarely being beaten. To fix this, it acquired fast growing retailer Trinity Arts, which continues to power ahead, up 42% last year. It will now merge the two businesses, hoping that some of the latter’s magic will rub off on Point. At the same time it is investing in expanding the key Niko and… chain to sell a much greater proportion of overseas fashion labels.

Start Today claims 10 million users, but closes outlet site
Start Today continues to close trial operations which have failed to take off as hoped while continuing to upgrade its core business. Above all it is focused on beating Amazon and other competitors in customer service, now extending free same day shipping to Kansai, a service which has helped boost membership in recent months.

News in Brief
Spain’s Uno de 50 in Japan
Tourists reach record numbers
Spain’s Munich shoe brand in Japan
Department Stores hoping for premium Christmas
Itochu signs Derek Lam and Cacherel
Red Mango frozen yoghurt launches in Japan
Aeon begins exclusive sales of Picard
Senior consumer targeting expanding rapidly
H2O expands cosmetics chain to men
Daiei ratifies Aeon takeover
Muji to introduce self-scanning
Japan falls into recession, second tax hike postponed
Sagawa launches large scale logistics services
Nihonbashi renaissance plans continue around Takashimaya
Keidanren: winter bonuses to rise 5.7%
Japan’s Etsy launches mobile app
Biggest Stradivarius store in world opens in Osaka
Seria jumps 10.5%
Keikyu unveils new men’s floor
L.L. Bean opens in Aeon Laketown
Direct mail market hits ¥5.8 trillion

Company and Brand Index this month
Numbers indicate page of report:

[columns count=”4″]beno Harukas, 16
Adastria Holdings, 10
Aeon Group, 9
Aldi, 1
Amazon, 5, 8, 11
Aquagirl, 5
Belle Maison, 3
Bershka, 10
Burberry London, 7
Cacherel, 4
Circle K Sunkus, 6
Clinique, 6
Collect Point, 11
Colourful Board, 5
Converse Footwear, 7
Coronet, 4, 7
Cosmos Berry, 7
Cosmos Yakuhin, 10
Creema, 9-10
Cyberagent, 10
Daiei, 5, 7
Derek Lam, 4
Dmet Label, 3
Don Quijote, 1
Dries Van Noten, 4
Dunkin Donuts, 5
Duskin, 5
Ecute, 6
Edifice, 5
Estnation, 4
Etsy, 9-10
Excelsior, 6
Fab, 9
Familymart, 6
FG Joy, 5
Flying Tiger, 4
Forever 21, 4
Fruit Gathering, 5-6
Galloria, 6
Glenroyal, 11
Global Work, 10
Goodday Park, 6
Grand Tree Musashi Kosugi, 6, 14
Grandfront Osaka, 4, 13
H2O Retailing, 5
Hasekou, 4
Hawaiian Donuts, 6
HEP Five, 13
Hyke, 4
Inditex, 8, 10
Isetan Mirror & Make, 6
Isetan-Mitsukoshi, 3-4, 7, 9, 16
Ito-Yokado, 6, 9
Itochu Fashion System, 4
Itochu Shoji, 4, 6-7
Jason Wu, 7
Joix, 7
JR East, 13-14
JR West, 3, 16
Keikyu Department Store, 10
Keio, 5
Krispy Kreme, 5
Kyo Yasu Do Big Conbini, 1
L. L. Bean, 11
Lala Terrace, 16
Lalaport, 6, 14
Lanvin, 7
Lazona Kawasaki, 13
Lidl, 1
Lucua, 1, 3-4, 13, 16
Lumine Est, 14
Lumine Ikebukuro, 13
Lumine Shinjuku, 14
Lumine Yurakucho, 14
Magaseek, 11
Mai Basuketto, 1
Maison Martin Margiela, 4
Margaret Howell, 4
Mark IS, 6, 14
Marni, 4
Massimo Dutti, 10
Matsumotokiyoshi, 9
Matsuya, 1, 3
McDonalds, 6
Mitsubishi Estate, 14
Mitsubishi Estate-Simon, 13
Mitsui Real Estate, 14
Mr. Donuts, 5-6
Mujirushi Ryohin, 7
Munich, 3
Nano Universe, 4-5
Nemika, 7
Nina Ricci, 7
Nishida Tsusho, 3
NTT Docomo, 4-5, 11
Old Navy, 4
Onward, 16
Outlet Peak, 11
Parco, 14
Picard, 5
Pieri SC, 10
Pinkoi, 10
Rainbow Spectrum, 3
Red Mango, 4-5
Ron Herman, 9
Rosebud, 5
Sagawa Kyubin, 8
Samantha Thavasa, 4
Sanei International, 4
Sanki Shoji, 4
Seibu Sogo, 6
Seijo Ishii, 6
Senshukai, 3
Seria, 10
Shiseido, 5
Start Today, 1, 11
Stradivarius, 10
Studio Clip, 10-11
Suntory, 3, 6
Takashimaya, 8-9, 14
Tokyo Solamachi, 13
Tokyu Plaza, 6
Toray Diplomode, 4
Toshin Kaihatsu, 9, 14
Trinity Arts, 1, 10-11
TSI Holdings, 4
United Arrows, 1, 8-9
Viktor & Rolf, 4
Walmart Seiyu, 10
Watashi Plus, 5
Yamada Denki, 1, 7
Zara, 10
Zara Home, 10
Zozotown, 11


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