January 2020 Issue
Lawson and KDDI join forces in cashless payments war
With a series of mergers over the past three months alone, the big three mobile providers, along with Rakuten and Amazon, are drawing up battle-lines for competition in e-commerce, mobile payments and loyalty schemes. Softbank/Z’s acquisition of Zozo and LINE was the start but last month KDDI announced it would tie with Lawson and NTT Docomo made a deal with Amazon. The mobile-driven shopping ecosystem is becoming the biggest news in retailing.
Editorial: The marriage of online and offline
J Front to buy all Parco shares
J Front has been busy with rebuilding and remodelling, culminating in November with the reopening of Parco Shibuya, as it shifts from department store dependence to become a mixed format developer. This should ensure a bright future – and why it has just announced the purchase of all remaining shares in Parco.
Fewer SCs for first time in 16 years
Shopping centre development continued its downward trend in 2019. The faster than expected decline in rural populations and the heavy use of e-commerce by those that remain forced many SCs to close their doors, leaving fewer SCs overall than in 2018.
Snow Peak: the lifestyle activist
Snow Peak just opened its first European store in London’s Regent Street, another step on the road to becoming a kind of Japanese version of Patagonia, albeit somewhat quirky. While camping and mountaineering goods continue to sell well, what has been lacking is enough lifestyle merchandise. To fix this, the founder’s granddaughter has launched a new apparel line just in time for major new flagships in Harajuku and Nagano.
¥5 billion investment for Isetan Niigata as Mitsukoshi closes
Isetan-Mitsukoshi continues to scrap-and-invest, closing down loss-making stores and investing solely in those stores that it believes have a long-term future. While there are still more stores in the group that should be disposed of, the upcoming closure of Mitsukoshi Niigata is a further sign of decisiveness, as is investment in the neighbouring Isetan Niigata.
Zozo opens on PayPay Mall and launches again in China
Zozo’s new alliance with Softbank/Z Holdings is already bearing fruit. As well as opening on Z’s PayPay, Zozo will also take another stab at the Chinese market, eight years after its last attempt.
Yamada Denki acquires Otsuka Kagu
Yamada Denki is the largest consumer electronics retailer, not the best sector to be in right now, while Otsuka Kagu increasing looks like a has-been furniture chain. Yamada has now acquired Otsuka, and while it claims it plans to protect Otsuka’s premium positioning for the time being, the move is really about aiding further diversification, in particular, development of Yamada’s new lifestyle formats.
Workman success lures competitors
Workman’s share price broke ¥10,000 for the first time in mid-December. This reflects the extraordinary success of the Beisia-controlled retailer since it launched its consumer-targeted offshoot chain, Workman Plus, in October 2018. While competitors are emerging, including from Fast Retailing and home centre retailers like Shimachu, Workman has a strong lead and keeps innovating.
Nothing gets rid of plastic as fast as international pressure
Japan has a real problem with plastic packaging. It’s everywhere and to a shocking extent for such a technologically advanced market. Retailers have been reluctant to cut back, falsely believing that customers expect plastic packaging but, with the Olympics looming and millions of tourists set to arrive, METI has begun forcing the issue.
PPI: doubling sales at Uny
Pan-Pacific International Holdings (PPI) has more than doubled store numbers in the last five years and become one of the elite retailers with sales approaching ¥1.5 trillion. As well as the promise of higher profits from converting Uny stores, PPI plans to expand aggressively in ASEAN countries and has sent its CEO to the USA to spearhead expansion there. At home, more discount stores will be opened with core operations more and more like Aldi and Lidl.
Seven Eleven: more problems
Seven Eleven may be Japan’s most profitable retailer but 2019 brought a series of problems and the convenience store operator has struggled to respond. Seven Pay is dead, the row with franchisees over opening hours is far from over, and now it seems the company owes part-time workers up to 40 years of overtime pay.
FOCUS: E-Commerce mainstream in 2019
What statistics are available suggest that Japan lags behind China, USA and the UK in terms of e-commerce penetration but this position overlooks the single-minded shift of retailing to integrate e-commerce with traditional retailing. Japan still has much to offer customers in the high street and these physical stores are now being heavily supplemented through online channels. Already we’re seeing the role of some stores shift towards showrooms making management more efficient and meaningful. Japan is set to see the e-commerce sector as big as 20% of retail sales by 2024 and many of the operational problems holding online retail back globally, such as last mile fulfilment, could well be solved first in Japan.
Retail Data:Post tax hike hangover continues in November
Costco Japan launches online store
Rakuten Superpoints convertible to cryptocurrency
French footwear brand Both opens in Omotesando
Marui buys share in used hobby vendor, Surugaya
Allbirds to open Japan store
QB House becomes major retail export
Aeon closes Talbot Japan
Kose opens Ginza flagship
Fly Pony launches in Japan
Homeparty market expanding
Cocokara Fine to take over categories at Izumiya
Tokyu Hands new format for department stores
CEO of Valextra Japan arrested
With Harajuku line up confirmed
@Cosme to close Taiwanese stores
End of year bonuses break records for second year
New residential areas mostly in city suburbs
Spain’s Misui opens in Isetan Shinjuku
Takashimaya profits up
New SC for Osaka Station in 2024
Mash Holdings up 12%
Askul losses down, breakeven by 2023
Wage increases eaten up by welfare payments
NEC to demonstrate unmanned store tech
DCM profits up thanks to private brands