June 13 2019

June 2019 Top Stories

Highlights from JapanConsuming monthly report

News and Analysis on Japanese retailing and consumers

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FOCUS: Retailing 2030: The Big Disruption
Retailing in Japan is about to enter a period of unprecedented change – the biggest disruption in its history. The causes are threefold: population contraction, the labour shortage and e-commerce. Most advanced markets face one or, at most, two of these pressures but Japan faces all three at the same time and, in terms of population and labour much sooner and more extremelythan any other major country. Retailers and brands in Japan are already beginning to respond and the next 10 years will see the emergence of a retail sector transformed by new solutions in productivity and efficiency. Although e-commerce will take priority, physical shops will still have a place and in some ways be more relevant than before – and be a lot more profitable.

Amazon Japan ties with Life Corp
Amazon has announced a new tie-up with Life Corporation, the country’s single largest supermarket chain with sales of almost ¥700 billion. The tie-up signals a major step forward for Amazon and could well cause panic attacks around the halls of other supermarkets also looking to break into the online food sector.

Editorial: Retail disruption

Shopping centres: station and outlet malls up again
Shopping centre performance varies hugely between regions and locations, but for the past few yearsthe common denominator for SCs with consistent positive growth has been either that they are located in transport hubs or are outlet malls.

Snow Peak: a Japanese outdoor success story
Snow Peak started out as a niche brand for the true mountain devotee but is fast emerging as a lifestyle brand for outdoor lovers and urbanites alike. Marrying Japanese technical skills and quality with a backstory of mountain derring-do, Snow Peak has big ambitions to expand its 225 store network further in Japan and become a major brand overseas too.

30% of firms consider foreign staff
The labour shortage continues to worsen and one possible solution is bringing in more foreign employees. Nihon Soken suggests that a third of companies already employ foreign workers and another third are looking at the idea. Bureaucratic requirements mean new visa regulations may not help as much as hoped.

Crooz: still aiming for ¥100 billion
Crooz is one of mostsuccessful firms to emerge from the fiercely competitive fashion e-commerce market, one which is awash with hundreds of small startups trying their luck and mostly failing. With sales of ¥30 billion last year, it rose from nothing five years ago to leap ahead of Locondo, Magaseek and other players that have been going for more than a decade. Crooz has had to adjust to its new size in the last 18 months, investing in new logistics for example, in preparation for what it hopes will be a fast road to ¥100 billion.

Oisix buys into Dean & Deluca, ties with NTT Docomo
Oisix Ra Daichi, the leading online seller of meal-kits, announced two important deals last month. It expanded its share of Welcome Group, which runs Dean & Deluca among other brands, and added a new supply deal with NTT Docomo. The latter gives Oisix access to Docomo’s large customer base.

GMS need to differentiate to survive
GMS chains have a bleak future in Japan – at least if they stick to their current form – and the latest annual results prove the point. The big chains are all in decline, with regional stores the only exception. Those in direct competition with each other and more dynamic, specialtyformats desperately need some new point of differentiation. There are a growing number of examples that show the way forward.

Yamato launches fitting stations
Yamato has come up with multiple solutions to improve e-commerce fulfilment, from lockers to tie-ups with convenience stores. Its latest idea targets fashion brands with a new service that delivers online orders to clothing alteration stores where customers can try on and even get adjustments done, reducing the cost of shipments and returns.

Shimamura hoping for profit revival
Shimamura had one of its toughest years last year, with sales falling and operating profit down 40%. Efforts to rationalise its supply chains led to kickback from consumers unhappy about the more limited merchandise, but while the apparel chain is trying to fix this, the real concern is its bumbling first steps in e-commerce.

Mid-year bonuses up for 7thyear
Salaried employees can look forward to another good mid-year bonus, with most companies increasing their payouts this summer. Bonuses will be higher in distribution, as well as other sectors facing the need to hold onto capable employees in the face of growing competition for labour.

Uniqlo to put IC tags on everything
Uniqlo will put IC scannable tags on all of its products to allow easier and lower cost store operations and better integration between stores and e-commerce.

Retail Data: Department store sales fall 1.1%

Seria captures more share
Yahoo Shopping rises 22%
Cainz pop-up shop in Tokyo Midtown
Marui to expand omnichannel options
Pal Group e-commerce sales jump 40%
Mitsui Fudosan to open Lalaport SC in Taiwan
Workman adjusts store targets upwards again
METI: Retail sales up 1.7% in 2018
NTT Docomo ties with Sony and Isetan-Mitsukoshi on skincare analysis and sales
Origami Pay customers get access to local bank accounts
LINE Bank to open in 2020
Jupiter sales down for firsttime, QVC up
40% of women with income above ¥5 million buy convenience store cosmetics
@cosme to open flagship at Harajuku station
Stripe’s fashion rental app hits 1 million downloads
Matsukiyo to open in Narita Airport
Coop Kobe introduces automatedsystem for phone orders
Toyoshima launches food-based dyes using leftovers
H2O chooses in-house chain for station convenience stores
Daiso adopts PayPay mobile payments


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