January 2016 Highlights

Jan 05

FOCUS: 2015 proving a good year for retailers – unless you’re a GMS chain
Consumers face growing pressure from stagnant wages and increasing prices for basics, a situation that is likely to worsen with further weakening of the Yen. Last Autumn, worries about consumer spending led several major retailers to publicly express concern that things could get worse by the end of the fiscal year. This may well be a possibility, but for many companies 1H2015 was not bad at all and, for some, end of year profits will exceed expectations. Drugstores did particularly well and most convenience store chains continue to boom. Even the top department store chains are holding steady. The only, really depressed format is, yet again, GMS.

Start Today ties with LINE, fights back against major online malls
Start Today has been fighting back against the threat from Amazon and Rakuten through relentless promotion and, thanks to Japan’s excellent logistics firms, by catching up with Amazon on fulfilment. As a result it is forecasting a 30% increase in transaction values this year. Its latest collaboration is a tie up with LINE to link in-store beacons with the LINE app, making it easy for consumers to capture information on fashion products in store, and just as easy for Start Today to track them. If it works, it will boost Zozotown’s leading position in online fashion marketing.

Editorial: Retail sector looking strong

KDDI and J:Com acquire stake in Jupiter Shop Channel
TV shopping is increasingly a misnomer as more and more viewers watch shopping programming on their phones. KDDI will now acquire a stake in the industry through J:Com, itself 50% owned by KDDI, which will buy 50% of Jupiter Shop Channel, a 5% stake of its own, and work closely with Jupiter to develop mobile video shopping.

Takashimaya: an omnichannel for all
Takashimaya has been developing some impressive e-commerce options over the past few years, and today has a suite of three main sites that look as good as anything else available. Having started with Select Square, an online select shop designed to promote tenant brands from its stores, the department store is now progressing towards shifting its existing direct mail business online. It has also launched innovations to target senior shoppers.

JR East trials own fashion stores
The shopping centre arm of JR East is about to start operating its own fashion stores. Japanese retailers, especially lifestyle retailers, have a new obsession with merchandising control, including product planning and supply chains. This shift was led by specialty chains and then fed into department stores, but it is clear that the old model of supplier dependence is now entirely anathema when even SC developers want more control of retail marketing.

Convenience stores to sell electricity
Japan’s cosy electricity supply cartels will face real competition from this coming April with more than 200 firms already applying to become electricity retailers, and cross-industry alliances developing both for supply and retail packages. Although the market seems wide open, convenience stores are likely to become major power retailers, and if they succeed, the potential impact on their sales will be huge.

Aoyama Shoji buys Mister Minit Asia franchise    
A suits retailer buying a shoe repair and key copying chain sounds odd. It would be if it wasn’t Aoyama Shoji. The company that claims to be the world’s biggest suits retailer is facing up to saturation in Japan’s suits market, diversifying into an eclectic range of businesses ranging from an American Eagle Outfitters franchise to used goods chains, and is looking for more, making it a potentially useful partner for any international brand given its skills and resources.

Printemps Ginza to end contract with Printemps France
The Printemps name was brought to Japan in the 1980s when Daiei, at the time Japan’s biggest retailer, wanted to get into the department store business and so bought a license to a prestigious foreign name to make it work. Unfortunately Daiei soon began to run out of money and the remaining building in Ginza has limped along ever since. Now Isetan-Mitsukoshi plans to make it a flagship for high spending women.

Aeon belatedly looks to jump-start its omnichannel strategy
Aeon launched aeon.com in December – at least in its own mind. Currently, it still hasn’t secured the correct domain but that hasn’t stopped the largest retailer using the aeon.com brand in its marketing. The new site does represent a small step towards consolidating existing online initiatives, but it also reveals the same mix of varied, disparate components that reflect the nature of Aeon’s business as a whole.

Nissen sales collapse again
Seven & I has found value in Nissen’s direct distribution expertise, but the catalogue company’s core business is in trouble, with sales down nearly 30% again in November and net losses for the year expected to be well above ¥10 billion. Some of the red ink is a deliberate strategy by Seven & I to make its new subsidiary efficient now rather than, as it did with Sogo Seibu, waiting fruitlessly for incumbent managers to sort the problems out themselves.

DoClasse to double sales to ¥30 billion in 3 years through stores
DoClasse was an immediate success when it launched in 2007 as a catalogue and online fashion business for women in their 40s and 50s. With sales now above ¥13 billion, it is investing less in online and more in physical stores, creating an omnichannel business but from the other way round.

Foods to get lower consumption tax rating after hike in 2017
After weeks of wrangling and avoiding a decision, the government has finally agreed with coalition partners to implement a reduced tax rate on fresh and processed foods in 2017.

IN BRIEF
23.5 million tourists expected in 2016
Yahoo shopping growing 30% year on year
Deckers Japan opens biggest UGG store to date
Marui Shoes opens in Lalaport Tachikawa
Flash sales site Luxa opens first store
Shibuya Parco rebuilding plan confirmed
Senshukai does nail salons
Radishboya launches senior food packages
Bic Camera to open duty-free stores in airports
Japanese prefer credit cards when paying online
Aeon and Seven & I to issue debit cards
JR East opens Atre Urawa
New Picaro bags & accessories chain offers new outlet for overseas brands
60 new SCs in 2015
Rakuten makes second attempt in China
Izumi acquires Super Daiei
Lixil opens flagship Super Viva Home store in Nagoya
Amazon Japan launches car leasing business
Abeno Q’s Mall to swap out 40% of tenants
Familymart launches hybrid video rental store
TSI absorbs Rosebud and Elephant businesses
Daimaru Matsuzakaya opens outlet in Kobe Sanda Mall

RETAIL DATA: Expenditure falls in November

Companies and Brands in this Issue (No. = Page Number in Report)

ABC Mart, 12 Abeno Harukas, 10 Abeno Q’s Mall, 10 Adastria, 14 Aeon Group, 7, 9 Aeon Kyushu, 9, 12 Amazon Japan, 9 American Eagle Outfitters, 6-7 Anchor Woman, 7 Aoki, 6 Aoyama Shoji, 1, 6-7, 14 Arcs, 13 Atre, 5, 7 Bain Capital Partners, 3 Beams, 5 Bic Camera, 6 BMW, 10 C6, 8 Cawachi Yakuhin, 13 Chanel, 5 Cocokara Fine, 13 CoutuLife, 5 Culture Convenience Club, 11 Daiei, 7-9, 13 Daimaru Limited Store, 11 Daimaru Matsuzakaya, 11 Daiso Sangyo, 7, 14 Daiyu, 14 Deckers Japan, 4 Diamond Power, 6 Don Quijote, 14 Elephant, 11 Familymart, 10-11, 13 Ficouture, 8 FitFit, 11 G-Foot, 9 Ginza Place, 8 Ginza Yamagataya, 14 HAC, 9 Hard Off, 14 Haruyama Shoji, 6, 14 Heiwado, 12 Herschel, 8 Hinka Rinka, 8 Hulic, 5 Isetan-Mitsukoshi, 6-8 Ito-Yokado, 9, 12, 14 ITX, 13 Izumi, 9, 12-13 JCB, 7 JD Worldwide, 8 JR East, 1, 5, 7 JTB, 3 Jumble Store, 7 Jupiter Shop Channel, 1, 3 JX Nippon Oil, 5 Keiyo, 14 Komeri, 14 Lady Yakkyoku, 13 Lalaport, 4, 7-8 Laox, 13 Lawson, 5-6, 13 Levi Strauss, 7 Lixil, 9 Lumine, 5 Luxa, 4 Maruhisa, 13 Marui, 4-5 Matsumotokiyoshi, 13 Matsuya, 4, 8, 14 Maxvalu Tohoku, 13 MC Retail Energy, 6 Ministop, 9, 11 Mister Minit, 1, 6-7 Mitsubishi-Simon, 11 Mitsui Outlet Park, 11 Mitsui Real Estate, 11 Mr Max, 14 Nanaco, 7 Next Blue, 7 Nihon Chozai, 13 Nissan, 8 Nissen, 1, 10 Nojima Denki, 13 NTT Docomo, 5 Okinawa Rycom, 8 Omni7, 6, 8, 10 Onward, 4 Orix, 10 Osaka Gas, 5-6 Oyster Bar Wharf, 5 Parco, 5 Picaro, 7-8 Ponta, 6 Printemps Ginza, 1, 7-8 QVC Japan, 3 Radishboya, 5-6 Rakuten, 1, 3, 7-8 Rosebud, 11 Ryohin Keikaku, 12 Sagami, 14 Select Square, 4 Senshukai, 5 Seria, 14 Seven Bank, 7 Seven Eleven, 9-10, 13 Softbank, 5 Sogo Seibu, 10, 14 Start Today, 1, 3 Sugi, 13 Sumikin Bussan, 7 Sumitomo Shoji, 3 Sundrug, 13 Super Daiei, 9, 13 Super Viva Home, 9 Tab Mall, 4 Takashimaya, 1, 4, 11-12 Tenmaya Store, 9, 12 Time mart, 4 Tokyo Gas, 5 Tokyu Corp, 5 Tokyu Hands, 7-8 Treasure Factory, 14 Trial Company, 14 TSI Holdings, 11 Tsuruha Holdings, 13 Tsutaya, 7, 11 UGG, 4 United Arrows, 5, 14 Universal Language, 7 Welcia Holdings, 13 Wondergoo, 11 Worldpay, 6 Yahoo Shopping, 3 Yakuodo, 13 Yamada Denki, 13 Yonego, 4 Yume Card, 9 Zozotown, 1, 3

Get a concise monthly update on Japanese Consumer Markets – and a FREE copy of our monthly report.