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2.01.2012

Another Department Store Disappears from Tokyo

Sogo Department Store's Hachioji Store closed on 31 January after 28 years of business.

In 2011, we said good-bye to Daimaru Nagasaki Store after 157 years of business, and soon, Tenmaya Hiroshima will close after 39 years as well.

Closer to the heart of Tokyo, Marui Curren, Japanese retailer Marui's attempt at competing with H&M and Forever 21 in the fast fashion category alongside Shibuya's 109, has admitted defeat and will close this year. Marui Curren joined the so called fast fashion wars in February 2009.

Mitsukoshi Alcott, currently home to such global super brands as Tiffany & Co and Louis Vuitton, is also closing its doors as at end March, and the venue is planned to be converted to a huge UNIQLO and BIC Camera.

In 2005, there were 43 department stores in Tokyo. In 2008, that number was reduced to 34.And this trend is not being reversed.

Where do people shop, then?

Retail in general in Japan in 2009 (read: pre-3.11 earthquake) shrank by 2.3% according to METI, the Ministry of Economy, Trade and Industry. Yet, non-store retail recorded its 12th consecutive year of growth and E-commerce grew by over 30% in some key sectors including fashion and pharmaceuticals.

It is not rocket science.

Japan is the country of convenience.

There are 44,164 convenient stores (i.e. Seven-Eleven, Lawson's, Family Mart, Circle K...) in Japan with just the top 10 convenient store chains. That is one store per every 294,000 people.

People shop where it is convenient.

An internal source in a major underwear maker told me that their sales now peak at midnight every day, and their best-selling channel is convenient stores.
"People realize they have no clean underwear for the next day and they go to their local convenient store to buy one,"
he told me.

"What is the matter with HAND WASHING one at home?"
I asked in astonishment.
"Nothing, but consumers find it more convenient to buy a brand new one at a convenient store."

Right.

According to the Ministry of Transport, in 2010, there were 3.22 billion small packets and parcels delivered in Japan, reversing a shrinking trend in the previous 2 years. Its growth is largely attributed to E-Commerce and non-store retail.

So, I take a closer look at home, and think a bit more in realistic terms.

I asked myself:
What do I need to go to brick and mortar stores for?
And why would I go to a department store?


To the first question, there is very little I need to go to brick and mortar stores for.
The answer is: food and sundries that I need immediately. 
Yesterday, I had to go and get some milk as my son drank all that was delivered by the milk man the previous week in his current drive to "drink lots of milk and grow as fast as he can."
The day before, I had to go and get a light bulb.

My weekly grocery shopping is done online through the Co-op web site.
I have regular deliveries on Saturday afternoons that meet 90% of my requirements for the week.

I love browsing in book stores, but I never have the time for it any more.
Amazon and Rakuten Books are my best friend and if I get the urge to get something cheaper, I go to Book Off Online, a second-hand book store.

Travel and music, the top two items that are no longer purchased in brick and mortar applies to me, too. Though I do enjoy buying a CD or two on Amazon vs. downloading albums on iTunes all the time.

When it comes to clothes for myself and the kids, I guess it is 50%-50%.
I buy a lot of staples online, and visit my local "select stores" or boutiques to pick up the latest funky stuff.
Never to a department store. 

Actually, I deliberately took the time to walk around Shinjuku Isetan and Hankyu Umeda last week, to check out the two leading trend-setting department stores in Japan.

I was appalled.

Where did all those fashionable people go?

I couldn't tell if I was in Isetan or Mitsukoshi.

The clientele looked the same - ultra conservative people aged 50 and above. 

No wonder why brands are now moving out of department stores and into Station Buildings, Fashion Malls, and "select shops."

There is a growing number of fashion-conscious women in their 20s and 30s who have never shopped in a department store in their lives.

The post-bubble economy 30s and 20s are not interested in the European luxury brands.
Research shows that their favourite brand is UNIQLO followed by COACH.

2012 will no doubt see more department stores close their doors and give way to UNIQLO and other businesses.

The more consumer-conscious brands are quickly beefing up their E-commerce presence and offers.

Thus, the more conservative brands too afraid of the E space will soon be extinct as their current clientele die out of old age.

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