International Trends

Japanese store wows Americans

The call for Australian convenience & impulse retailers to innovate, evolve and rethink strategy has never been louder and it’s up to the individual store to find new ways of engaging with their local communities. With a few exceptions, the typical Australian convenience offer has stayed much the same since convenience found its feet here in the late 1980’s. But lifestyles have changed dramatically. And so have the expectations of ‘convenience’.

The concept of ‘convenience’ has now filtered into all areas of life. Expectations have lifted. What was convenient ten or fifteen years ago is now looked on as normal. If convenience is nothing special, how do stores anticipate and exceed the expectations of the modern customer?

Today’s customers are perpetually on-the-go. They want their morning coffee, their breakfast, lunch (and everything in between) to-go - and now! This urgency is the very thing the convenience store thrives on and it’s an urgency which is often being met by other types of retail outlet.

There’s also an expectation of quality, be it in barista-style coffee, deli sandwiches, market fresh salads and produce. Quality is now something the customer is paying top-dollar for. It also means that the today’s convenience customer is gravitating towards ‘fresh’ destinations.

Australians are now spending almost twice as much in foodservice outlets as they spend in convenience stores, service stations, corners stores and newsagents combined! Convenience stores are being squeezed between supermarkets and foodservice outlets.

Imagine being able to do a roaring lunchtime trade – or a bustling breakfast ‘rush’ hour. It’s happening at other outlets. Why not at a convenience store? Can Australian convenience stores deliver the same quality, range and service as the local sandwich shop or food court – and beat them in terms of convenience?

Some overseas convenience stores have met this demand with resounding success – redefining their stores as one-stop fresh food destinations. The layout, feel, branding and overall experience of the stores has evolved dramatically from the traditional model.

Famima!!

In Japan more than 40,000 convenience stores (known as konbini) are open 24 hours a day, seven days a week. The Japanese convenience store was adopted from the USA model, with the first stores opening in Japan in 1969. Most follow the franchise system – the three major operators being 7-Eleven, Lawson and Family Mart.

Healthy competition between the three means that the Japanese convenience industry is constantly introducing innovative products and services. In addition to personal care, newsagency and emergency items, there is a strong focus on fresh food.

Japanese convenience stores sell an enormous range of, not only snacks and sweets, but also rice balls, lunch boxes, noodles, fried chicken and sandwiches. Food is heated and served by store staff. An equally impressive seasonal beverage range includes hot tea and coffee, the usual sports, soft and novelty drinks, and alcoholic beverages such as beer and wine.

Japanese stores have recognised online culture in the lifestyles of their consumers. Most Japanese convenience stores offer a wide range of personal services via self-service multi-purpose terminals. These include: copier and fax access, ticket reservations to sporting events and concerts, ATM, digital camera prints, bill payment and delivery and postal services. Customers can also reserve hotel rooms and airline tickets, order books, CDs or browse job ads in the classifieds!

One of the big three chains, Lawson, offers customers a ‘health diagnosis kit’. Using the terminal, customers can place an order for the kit to be delivered to their door so they can use it to take blood and urine samples for sending off to the lab, with the results delivered within weeks. It might sound a little quirky or far-fetched for the Aussie customer, but it’s just another way in which the Japanese have considered what ‘convenience’ really means to their customers.

7-Eleven is equally innovative with its online shopping service. Customers can visit http://www.711net.jp/ to choose from tens of thousands of products and place an order with their local store, collecting their purchases at a time that best suits them.

Japanese convenience stores are part of the everyday lives of their surrounding communities. It seems that, by staying one step ahead of the needs and expectations of their customers, konbini successfully change shopping habits of their customers – not the other way around! They are support centres for the busy lifestyles of their community.

Upscale convenience store chain Famima!! is part of the Family Mart franchise (Japan’s third largest convenience store chain behind 7-Eleven and Lawson). In 2005, Family Mart started opening Famima!! convenience stores in California and has readapted the Japanese model for sale back to the US market.

Targeting a market of middle and upper level income groups of 21-41 years of age, the Californian Famima!! stores feature an edgy interior design and offers premium and gourmet foods like deli-style ‘lunch boxes’ containing sandwiches, panini and sushi, as well as incorporating a vegan options into the mix.

The Famima!! fresh offer has been built around the philosophy of being ‘better stocked and more stylish’ than the average convenience store, while exceeding shopper expectations, so that that Famima!! Has become a trusted mealtime destination.

With its selection of just-made made soups, salads, deli and hot foods drawing customers through the door, Famima!! has gone a step further with its call to impulse purchasing. With newsagency, wine, and counter-product offerings such as gifts, phone cards and European chocolates, Famima!! is covering all bases.

You can find Famima!! on twitter, MySpace and Facebook, where the company has managed to create not only a sense of community, but a platform for promotion in a language that speaks to the next generation of consumer.

On its MySpace page, Famima!! sums up its philosophy and attitude towards its role in the community:

“Whether you want to do a late night after club run, or need that fresh snack to get you through finals night, Famima (sic) is your one stop shop with fresh food and quality snacks. While many convenience stores (sic) sandwiches are at least a few days old (gross I know), we make sure our deli items are stocked daily! Selection, service and quality is at your fingertips!”

Australian stores may not be ready for multi-purpose service terminals, but there are plenty of things they might adapt from the Japanese model:

1. A broader fresh food offer and better store ambience, so that customers will want to stay and eat their meal in-store.
2. Online or over-the-phone order services.
3. Adapting the range to the local community.
4. Thinking beyond packaged procucts. What other services do your customers need, every day and at a moment’s notice? Blank CDs? Dry cleaning? Ticketing services? Courier services? Office supplies? Local services directory?
5. Is your store the kind of place people just want to get in and out of? Or do they want to stay a while?

Sources: www.japan-guide.com
www.webjapan.org

Typical layout of a Japanese convenience store…
Source www.japan-guide.com

CALLOUT BOX: Chronology of Convenience Store development in Japan.

1969	• My Shop, Japan's first convenience store, makes its debut.
1974	• The first Seven-Eleven store opens, in Koto Ward, Tokyo.
1975	• Seven-Eleven outlet in Koriyama, Fukushima Prefecture, becomes the first convenience store • in Japan to remain open 24 hours a day.
1978	• Stores begin twice-daily deliveries of packaged meals and ready-to-eat side dishes. • More stores begin operating 24 hours a day. • Stores begin selling rice balls wrapped in cellophane.
1981	• Food processing and manufacturing companies begin working with convenience stores to develop new products.
1982	• Seven-Eleven begins using the Point of Sales (POS) system. • Stores begin acting as courier agents and offering photocopying services. • Lawson begins selling o-den (simmered foods).
1985	• Number of new convenience stores rises dramatically (Seven-Eleven has 2,600 stores, Lawson has about 2,000).
1987	• Black Monday stock market slump. • Stores begin handling telephone and utility bill payments. • By this time, many stores offer fax services, serve as agents for motor vehicle liability insurance, and handle payments for mail-order companies. • Stores begin 3-times-a-day deliveries of packaged meals and ready-to-eat side dishes.
1989	• Seven-Eleven Japan purchases Hawaiian operations of the Southland Corporation of the U.S.
1990	• Japan's "bubble" economy begins to collapse.
1991	• Outbreak of Gulf War. • Seven-Eleven Japan purchases a majority interest in Southland Corporation and acquires management rights in the company.
1992	• More than 20,000 convenience stores in Japan.
1995	• The Great Hanshin/Awaji Earthquake occurs.
1996	• Convenience stores begin selling video games. • More than 30,000 convenience stores in Japan.
1999	• E-net, a partnership offering automated teller machine (ATM) services, is established. The major participants are: FamilyMart, Circle K, SUNKUS, Three F, and MINISTOP. This leads to the installation of ATMs in many stores. • Seven-Eleven begins joint development of basic cosmetics with DHC, a skincare product company.
2000	• Stores begin e-commerce services and door-to-door delivery of goods purchased online. • They also begin delivery of prepared meals.
2001	• Seven-Eleven begins installing ATMs in its stores. • FamilyMart announces its intention to open 3,000 stores in China.

Source: www.webjapan.org