Top Stories April 2019

FOCUS: Fashion e-commerce: two-tiersystem of malls and direct closing in on department stores
Fashion is already the largest single category online, but it also a sector that is developing rapidly. While the bulk of sales come from the leading malls, Amazon, Rakuten, Yahoo and Zozo, as well as a growing number of smaller malls, fashion retailers are increasingly looking to add their own, directly controlled online stores. For now, there is plenty of room for everyone to expand, but we will increasingly see a two-tier system emerge, with brands selling on malls, but also developing exclusive brand lines for their own stores – while at the same time adjusting retail space to become part of a full omnichannel experience.

Consumption Tax increase: a blip
The increase in the consumption tax in October is a black cloud in the mind of most retailers. Seen as a necessary evil to help pay for rising social security costs, the hike probably couldn’t happen at a better time, with tourists, the Rugby World Cup, and the Tokyo Olympics all providing opportunities for an early bounce back.

Editorial: Retail Reiwa

United Arrows launches rivalto Zozo’s Wear app
In January, United Arrows announced it would take back control of its own e-commerce operations from Zozo but stipulated it would continue to sell through the online mall. Now however, it has announced a direct competitor to one of Zozo’s key products, its Wear app, a service that will allow fashion brands to generate more sales online as well as get access to key data on Japanese fashion trends.

Locondo unveils store franchise, adds higher end brands
Locondo has for long talked up its plans to become a major player in the fashion e-commerce market and a rival to Zozo. This hasn’t happened, but the e-commerce firm hasn’t given up and now plans to create a chain of franchised Locondo stores to build its name, while also launching its own private brands and introducing a high-end online mall called Locondo Department.

Charles & Keith: finding success in Japan second time round
The Singapore-based bag and footwear chain is having another go at the Japanese market after a failed joint venture and, so far, going direct has proven the right path. Sales are strong and it has just opened its fifth store.

Slower growth at Seria
Seria remains a robust 100 Yen shop business with one of the most disciplined storemanagement systems, but it faces problems, notably the labour shortage and higher wages. These are hard issues to solve, especially for a retail model that depends on fixed, low prices.

Labour shortage to force major upheaval in distribution
Companies complain that it is hard to find staff while others are laying off older workers to cut costs. The labour shortage for some roles is undeniable, particularly in retail and distribution, as well as construction. Looser immigration and more opportunities for women to work are both partof the solution but the crisis will lead to the biggest disruption in 50 years and the emergence of new types of store.

World using M&A to reduce apparel distribution to 50% of its business slash sales
Majorwholesale-retail group, World, relisted last year and has now embarked on a number of M&A deals to help diversify its business away from its focus on adult apparel. It made three deals in March alone.

Lawson offers customer returns service to online vendors
Lawson is opening up its store and logistics network to provide a customer returns service to third-party vendors, affirming its role as a hub for e-commerce transactions.

Cashless payments to reach 60% by 2027, already popular among young
Japan is embracing cashless payments wholeheartedly, and the government’s target to reduce the ratio of cash to other mechanisms to 40% by 2027 could be reached early. Even so, cash remains king for small retailers, restaurants and even convenience stores.

Aeon: where’s the digital strategy?
In 2017, Aeon said it would spend ¥500 billion on logistics and digital infrastructure to grow online sales to ¥1 trillion by 2020. Two years on and the only public developments are a series of investments in tech companies and reassurances that it has teams working on new systems. The ¥1 trillion goal looks increasingly out of reach without a major new initiative very soon.

Descente folds to Itochu pressure
Descente tried, but in the endthe remorseless pressures from Itochu and its allies put paid to the sports firm’s efforts to wrest control of its fate from the trading firm. Itochu is now back in control, as it has been for 20 years, with bullish plans to make Descente into a global sports firm.

Retail & Consumption Data: Savings rates continue to climb

IN BRIEF
Isetan Men’s reopens, forecasts ¥50 billion sales
Otsuka agrees tie with Yamada Denki
Palemo HD opens 50 new stores, first sales increase in six years
Alpen ties with Rakuten, opens experiential store
Decathlon opens first store in Kansai
Aeon’s Megasports and G-Foot set up joint venture
Automated parcel deliveries from Japan Post
Pal signs Iacucci
Colombia Sportswear brings Prana to Japan
Seven & I introduces first international private brand wines
iStyle and House of Rose agree capital tie-up
Sun Motoyama sold to travel firm
Hypebeast sets up in Japan
Sazaby League launches eyewear chain with Zoff
Onward opens spectacular flagship
Midtown Hibiya: ¥16 billion in sales in year one
Japan helps Furla rise 5.2%
Welcia launches upscale cosmetics chain
Starbucks opens new flagship
Marui increases collaboration with BASE

Companies/Brands in this Issue