March 2020 Issue
PPI: a ¥3 trillion discount empire
PPI, the owner of Don Quijote, likes 10-year plans, not surprisingly given it beat the targets in its last one by two years and by 65%. The discount and variety store retailer has now announced a new plan, called Passion 2030, which calls for a doubling of sales and a tripling of profit to 2030.
Editorial: Good and bad connections
Mercari recruits retailers and brands to exploit data & expand markets
Mercari is often viewed as a threat by vendors and retailers of new product, although Mercari’s own survey results suggest that the ability to sell unwanted items increases the propensity to buy new ones. Mercari will now offer its data on resales to brands and retailers to allow end-to-end tracking of a product’s lifecycle. It also wants to incentivise Mercari users to visit stores to buy new product.
Department stores catch the flu
Some retailers and brands would like February accounts to evaporate along with the virus that caused this unprecedented downturn. Department stores not only faced falling traffic from fears of contagion but also the ongoing hangover from the consumption tax increase, along with a warm winter and an earlier Chinese New Year. Sales were hammered.
Young males: clean shaven, less fashionable
Shibuya 109’s recent in-depth survey of 600 university students around Tokyo confirms a number of key trends, not least the fact that Japanese men are very keen to remain clean shaven. More importantly, students of both genders are more concerned about price than brand when buying fashion.
Cashless payments not so popular
The government and larger retailers are still gung-ho about cashless payment systems. Cash, which still makes up 60-70% of all transactions in Japan, is a major cost for larger retailers but cashless systems also come with a cost in terms of technology and fees, and smaller vendors are far less impressed.
Baycrews: 72% direct online sales
Select shop retailers were slow to build e-commerce operations of their own but, realising the potential benefits for linking on and offline marketing, are finally catching up. Baycrews says 20% of customers use both online and physical stores before purchasing but account for 50% of all revenue.
Rakuten GMVs up 13.4% but FTC fight continues
Rakuten continues to expand: GMVs were up by 13.4% last year, with more than 60% paid for with the company’s own credit card. By the end of 2020, Rakuten’s own DCs will have the capacity to fulfil more than half of all orders from Ichiba and its own retail arms. It will also launch a mobile phone service in April, squaring the circle between online retailing and customer integration within its own dedicated ecosystem. Unfortunately, the Fair Trade Commission is putting a dampener on its plans to bring merchants into line with Rakuten’s overarching ambitions.
The first department store desert
Yamagata became the first prefecture to have no department store at all last month. Yamagata is an extreme case for now but won’t be the last, with 15 prefectures now having just one store remaining.
Marui forms DtoC business
Marui was an early proponent of offering promising digital services businesses space in its buildings and taking equity in them. Some of these digital services make it easier for manufacturers and creators to sell direct to consumers and Marui now wants to open up its buildings to them too, while helping promote them online at the same time.
Bic in Mitsukoshi, Otsuka in Yamada: crossover formats to halt decline
February saw two cases of declining retailers reaching out to consumer electronics chains for help. Bic Camera opened its first sales space in Mitsukoshi Nihonbashi, shortly followed by Yamada Denki’s introduction of Otsuka Kagu showrooms in four stores in Tokyo and Osaka. Although the setup might be different, both are cases of trying something new in the face of long-term decline.
Nitori: expanding through diversification into new categories
Nitori may have achieved 33 years of consecutive growth but the interiors retailer is worried about saturation in the home market and its attempts to make a big push overseas have stalled. To keep the engine running, Nitori has begun diversifying into consumer electronics, cosmetics and apparel.
FOCUS: Tourism: the boom is over but a solid long-term bet
Even before the Coronavirus hit the headlines, Japan’s 10-year tourist boom started to lose its momentum. Last summer, this was almost entirely down to the political tensions between South Korea and Japan over the kind of issues that look set to continue to bedevil East Asian relations for still more decades. As well as fewer Koreans, Chinese and other tourist growth also began to slow, a perhaps not surprising trend given the stratospheric growth of the past decade. Even then, the government was optimistic following the hugely successful Rugby World Cup, the bookings for Chinese New Year in January and the Olympics in the summer. Japan will not have a bumper year as hoped but, nevertheless, tourism is here to stay, providing benefits to the Japanese economy, retailers and brands alike.
Retail Data: A lull before the February Storm
Charles & Keith makes it alone
Styling Life signs French cosmetics brand Z&MA
SDI signs UK brand, Lou Dalton
Goldwin net profit surges 50%, Appoints new CEO
Itochu’s Leilian found violating contractor obligations
Hankyu Umeda targets HNWI women with new jewellery & watch floors
Workman tops Nikkei 2019 hit product ranking
United Arrows launches new brands
Parco to delist this month
Z Holding’s EC sales jump 26%
Mitsui’s Miyashita Park SC to open with 90 stores but not much park
Zozo founder launches startup fund, selecting life partner soon
2nd Street opens US East Coast store
Urban Research launches “re-made” clothing brand
Slowear opens in Isetan Salone, Iwataya
Snow Peak opens first department store concession at Isetan
Itochu sees success with Fila
Callaway Golf takes over Jack Wolfskin sales in Japan
Renown and Sanyo Shokai continue to struggle
Sales at mass-market chains weak in January and February
Joyful Honda emulating Workman
Yodobashi opens second drugstore sales area
PayPay breaks 100 million transactions in December
Brands and Retailers in this Issue
Charles & Keith
Comme des Garcons
Don Don Donki
Fair Trade Commission
Gotemba Outlet Mall
Green Label Relaxing
Huis Ten Bosch
J Front Retailing
Japan Chain Store Association
Le Coq Sportif
Lieu De Vintage Mejiro
Mark IS Yokohama
Mega Don Quijote
Onuma Department Store
Pan Pacific International
Rewrites Urban Research
Sofhie La Giraffe Cosmetics
The North Face