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4.12.2013

"Girl" is the Buzz Word

First, it was ELLE, who launched ELLE Girl


Elle Girl always has an overseas celebrity on its cover.

Before Blake, it was Kristen Stewart, and before Kristen, it was Taylor Swift.

Obviously, the selction for the cover girl shows the target age group.

Next came VOGUE Girl...


VOGUE has been casting Japanese models and actresses on its cover.

But the target age group is the same as those for ELLE Girl.

And today, I received a copy of Peach John Girl.


And given that Peach John is the "Victoria's Secret of Japan,"

it is easy to see that "Girl" is the buzz word du jour.


Girl is a State of Mind, not Age


Though the cover girls speak volumes about the target age group and lifestyles/fashion preferences, once inside the cover it is obvious that Girl is actually a state of mind and not necessarily an age group.

Sure, the publications do not talk about anti-aging remedies and cosmetics, but the advertisers are not always the second line and VOGUE often features "high and low styling" where they match up haute couture brands with more up and coming ones like CHANEL x Acne.

I was quite impressed that the health related articles in VOGUE Girl went into some very serious advice on sensible and healthy eating, like "choose whole grain rice over bread and pasta to prevent blood sugar levels from rising too quickly."

Japan seems to forever be the market where youth and a "girly mindset" remain not only acceptable, but even preferred or seen as aspirational. Initially, I was inclined to think "and this, despite the rapidly aging population and there being more dogs than kids under the age of 15," but then again, perhaps it is more accurate to say that it is because of this that youth and being girly are so desirable. 

4.08.2013

Affordable Same Day Delivery is Coming - Yamato Holdings CEO Interview "We Aim to Be No.1 Not the Only One"

Yamato Holdings CEO Makoto Kigawa spoke to the Nikkei Marketing Journal.

Yamato has continuously upped the ante for home parcel deliveries while keeping prices reasonable. It is no exaggeration to say that they have made date and time certain, refrigerated and frozen goods parcel deliveries a part of the "universal service obligation" of anyone who wants to do home parcel deliveries - including Japan Post (who now offer date and time certain deliveries at no surcharge and refrigerated and frozen parcels deliveries as well).

They have number one market share and they still lead in such areas as offering pre-advice to registered "Kuroneko Members" by email with a link for them to change the date and time of delivery of the expected parcel(s).

Kigawa and Yamato now have "same day delivery" that costs the same as a normal next day delivery parcel in scope, among other services and remember - they don't keep their innovations confined to the more than 3,000 islands of Japan. They have international aspirations and will bring affordable value-added home parcel deliveries to your market soon!



### From the Nikkei Marketing Journal 8 April 2013 ###

Yamato Holdings delivers close to 1.5 billion TaQ-Bin parcels a year. Their greatest strengths is in new product development that is driven by innovation. "Cool TaQ-Bin" (refrigerated and frozen parcels delivery) and date and time certain deliveries are now the norm. New services include next day delivery of e-commerce goods ordered in the early hours of the night in limited areas. Such consumer needs driven services are boosting sales. The overall parcels market feels as if it has come to a stagnant growth stage, but Yamato always seems to be one step ahead. The Nikkei Marketing Journal spoke to CEO Makoto Kigawa to find out what their secret is to continuously develop new services that consumers want.

(The byline of the article is Toru Shimoharaguchi)

Nikkei MJ: The small courier parcels (TaQ-Bin) market saw negative growth from 2008 to 2009. Has the market reached saturation point?

Kigawa: The shrinking population and other elements contribute to a sign of slow growth, but we continue to secure positive growth. Small packet logistics is recovering as the shipping lots get smaller and frequency of shipments increase. The driver is e-commerce. Japanese e-commerce enjoys a very good reputation for quality. It is a role model for other overseas markets.

Nikkei MJ: Yamato has always created new businesses, but are you able to differentiate yourselves from your competition in the e-commerce market?

Kigawa: If we were not in business, I doubt Japanese e-commerce would have enjoyed such a great reputation. Our home delivery system, the "cool TaQ-Bin," speed of collection, returns and payment processing and other value-added services that we created has contributed to the rapid growth of e-commerce, I believe."

Expansion of "Same Day Delivery" among Tokyo, Nagoya, and Osaka Areas in Scope
Nikkei MJ: The growth of e-commerce and the evolution of parcel delivery services in Japan have changed the way our consumers shop.

Kigawa: The golden time for e-commerce is in the late hours of the night. Thanks to the proliferation of smartphones, orders have also increased during commuting times and lunch hours. Such lifestyle changes are rife with new real consumer needs. What is important for us is to get very serious about creating convenient services that meet such requirements.

Our TSS (Today Shopping Service) is a new service whereby goods ordered in the late hours of the night can be delivered the next day at 8 am. We offer this in limited areas only at this time. The shortest lead time to delivery is four hours. Consumers have indicated that this is very convenient for them, but what is more, the sellers are delighted by it.

Because the goods are delivered quickly, the buyers have little time to change their minds. And this means there is significantly less returns. Returns are significant costs. It requires people to manage it and space to process it. By reducing returns, sellers can increase the products they offer and this brings more customers."

Nikkei MJ: Yamato is famous for next day delivery, but now you are evolving into same day delivery.

Kigawa: We are probably the first to actually name the product as a "same day serive" or "Today Shopping Service." TSS is a system that enables sellers to operate e-commerce with same day delivery as their unique service offering. This changes the way customers perceive them and shop; and the sellers can promote their service with this unique attribute more and more. As this gets more exposure, it will need to be more than the current limited areas only service, so we will evolve our network.

Nikkei MJ: We understand that you endeavor to start same day TaQ-bin services between Tokyo-Nagoya-Osaka areas in fiscal 2016.

Kigawa: In August this year, we will establish a logistics center we call a gateway base for the Kanto area in Atsugi city of Kanagawa prefecture. We will show you this year how the network that will enable same day delivery in the Tokyo-Nagoya-Osaka areas will look like. First we will set up the system for the Tokyo area, and then expand it to the Chubu and Kansai regions. Fiscal 2016 is the last year of our current medium-term plan, and by then, we will be able to operate same day deliveries on a stable basis."

Nikkei MJ: It seems there is no end to service evolution.

Kigawa: Whether or not services will become popularly used is dependent on cost. Even today, if you really want to do same day delivery, you can get that if you pay 15,000 yen or more. What is imperative is to create a same day service that is priced at the same as what we charge for TaQ-bin today."


Empowered Front Line Managers Create the Seeds of New Services
Nikkei MJ: How do you actually look for new services to develop?

Kigawa: In the front line, our people focus on understanding what is inconveniencing our customers. We have 60,000 delivery people meeting customers every day and listening to them. What makes Yamato unique is that we are focusing on service development from the perspective of the recipients. We speak to the consumers and try to understand how we could solve their problems.

The "seeds" that are collected by our front line staff is first tended to by the creativity of our branches and outlets. The front line managers are empowered to do this.

Whenever they solve a problem or inconvenience for a customer, it is shared in the "Solutions Lab" in our database. Twice a year, good solutions are shared at the regional companies basis and then taken to headquarters for further discussions and development. We then standardize them so that they can be rolled out as services or products on a company wide basis."

Nikkei MJ: What is the most important thing when it comes to creating a product?

Kigawa: There is no way to develop a hit product by taking what we can do today and pushing it to our customers. That creates a gap between what the customer needs and what we can offer. I think it is common to say 'create a product only you can deliver,' but if you just want some self-gratification, it is easy to create new products.

Nikkei MJ: Even if you create a new product that responds to a real customer need, competitors are quick to follow.

Kigawa: Because they follow, the product or service quickly becomes more than a niche. Yamato aims to be the absolute number one in these markets. We don't aim for the only one, but to be number one is what is important.

Nikkei MJ: Yamato has a successful history in leveraging deregulation to generate new growth. Are there any particular areas you are looking at, at this time?

Kigawa: When deregulation is realized for pharmaceutical and medical supplies sales, there will be a great market opportunity. This is an area where the citizens of Japan have many challenges and inconveniences. And the distribution system for medical supplies is archaic. Even if prescriptions can be made remotely and delivered to homes, that would create new demand throughout Japan. I have no intention of saying that the express parcels market in Japan is saturated."

4.03.2013

Japanese Electric Appliance Giants Respond to Amazon with Same Day Delivery and Free Installation

Google started same day delivery of groceries in the San Francisco area to compete with amazon in a bid to win back "search traffic" from amazon. It was a interesting learning to see what could trigger a search engine to want to get in to the same day delivery logistics "game"...

In Japan, for the home appliances business, competing with amazon is a more direct and easy to understand formula - amazon has been stealing their cake and they have to do something about it.

Free Same Day Delivery and Free Installation - You Can't Get That at Amazon
From 1 March 2013, Japanese electric appliance retail chain, Yamada Denki (1.8 trillion yen turnover for the period ending March 2012, down from 2.15 trillion yen the previous year), has commenced same day delivery of goods ordered before 15:00 from their closest brick and mortar store, with free installation and advice on the newly purchased goods. Yamada will call the consumer before delivery to set up the ideal delivery time.  According to the Nikkei Marketing Journal, though the service is new, there are approximately 1 to 2 orders per store a day already. That is huge, considering that they have approximately 800 directly operated stores and a total of 5,383 stores as at the end of March 2012 including franchises.

In the event that the item ordered is not in stock at the retail outlet, the item will be shipped from the warehouse and delivered by a courier, in which case there are no installation or instruction services. This inconsistency is a bit troublesome, but since Yamada says they hope to deliver 80% of online orders through this direct from store system in the near future, this may be resolved.

Yamada now has big posters blaring "Yamada will offer the best price, even in competition with online prices by other retailers," in their stores and on their advertisement. This is clearly in response to all the consumers who flash the amazon site on their smartphones to negotiate discounts.

Noboru Yamada, Chairman of Yamada Denki has confided in the Nikkei MJ that "amazon has become the price leader in electric appliances, and has been taking market share. We cannot ignore this. I have now instructed my staff to sell in competition with amazon even if their retail price is cheaper than our procurement price."

Perhaps even more aggressive on price competition than electric appliance stores are camera stores in Japan. I was a sales rep for Olympus selling cameras to such stores from 1989 through 1995 (long before Olympus's window-dressing fiasco), and I had first-hand experience of the cut-throat competition that was played out among Yodobashi, Sakuraya, and Bic Camera. For them, the loyalty points is the key currency used to make up for what they cannot offer in raw yen terms.

Yodobashi now has systemized a pricing mechanism that enables them to sell at a lower price than amazon in real terms when the points given to the consumer is taken into account. Senior management at Yodobashi implies with the Nikkei MJ that they have designated staff checking the amazon prices in real time to ensure that the stores are up to date at point of sale prices. (Back in the days when I was at Olympus, they sent out staff several times a day to their competitors' stores to check the prices on the hottest items. They have institutionalized competitive price checking long before Kakaku.com and other digital tools made it a click away.)

Yodobashi has even commenced selling books from February 2013, and offers a 3% point back for them.

In addition, like amazon, Yodobashi offers free shipping, but does better than amazon in the major metropolitan areas where same day delivery is offered free of charge. And they have not been shy about trumpeting the difference between amazon and them whereby amazon charges for shipping unless you are a membership fee-paying PRIME customer. Yodobashi's warehouses are located in Kawasaki and Kobe, and shipments originate from one or the other.

Yamada's Chairman does not see Yodobashi as direct competition, however. He says, "we each have our own turf." And perhaps that is true - for now. Yodobashi's 21 stores are no match for Yamada's 800 directly operated stores, and while Yodobashi stores are concentrated in urban areas near terminal train stations, Yamada's stores are predominantly road side suburban stores. 90% of Yodobashi's orders received are within the urban delivery areas that qualify for same day delivery.

Amazon's Japanese turnover in 2012 was 7.8 billion dollars or approximately 700 billion yen in 2012, up 18.6% from the previous year. The electric appliances retail industry estimates that approximately 30% of that is in appliances, which would come to around 200 billion yen. The electric appliances stores boast in excess of 600 billion yen in sales on a consolidated basis, so their purchasing power is far mightier than that of amazon. But amazon't strong growth in amidst the shrinkage seen by the electric appliances stores (due mainly to the fall in television set sales) is a sure threat.

In terms of online sales, Yodobashi is at around 50 billion yen while rival Bic Camera is at 60 billion yen. Yamada has not made their figures official.

Of the key major players in this field, only Yamada and Yodobashi seems to be competing full-on with amazon at this time. Bic, Edion, and Joshin are selling through amazon while K's HD sells Kindles in their stores. (Yamada and Yodobashi do not.)

Amazon is preparing to open its largest logistics center in Japan yet - a 18,000 square meter warehousing facility in Odawara city of Kanagawa Prefecture, their 12th, within this year. Amazon has officially said that "there are no plans to cut back on our electric appliances offer" so how they will leverage this new location and expand their procurement capabilities is yet to be seen.

How Cheap is Amazon Any Way?
The Nikkei Marketing Journal published in their cover story on 3 April a price comparison of some popular items comparing the listed prices on Yamada Denki's online store, Yodobashi.com, and amazon.co.jp:

1) Canon EOS M (Camera body only)
    Yamada: 48,800 + 5,368 points (actual price: 43,432 yen)
    Yodobashi: 48,800 + 4,880 points (actual price: 43,920 yen)
    amazon: 44,359

2) Sharp Water Oven AX-CX3 (steam oven and microwave)
    Yamada: 30,960 + 3,405 points (actual price: 27,555 yen)
    Yodobashi: 39,800 + 3,980 points (actual price: 35,820 yen)
    amazon: 27,625 yen

3) Panasonic SD-BMS 105 (bread maker)
    Yamada: 19,900 + 2,189 points (actual price: 17,711 yen)
    Yodobashi: 19,600 + 1,960 points (actual price: 17,640)
    amazon: 17,816 yen

4) Toshiba Light Tech (E-core) LDA9L-D-G (LED light bulb)
    Yamada: 2,350 + 258 points (actual price: 2,092 yen)
    Yodobashi: 1,960 + 196 points (actual price: 1,764 yen)
    amazon: 1,782 yen

At Yamada, shipping is free of charge for purchases over 10,000 yen and orders received by 15:00 qualify for same day delivery by store staff from nearby stores. Yamada also responds to inquiries through online chat, and may agree to further discounts if other stores like amazon are offering lower prices.

At Yodobashi, delivery is free of charge and in major cities, same day delivery may be possible if orders are received by a certain time.

At Amazon, PRIME members enjoy free shipping, but other consumers may enjoy free shipping as well, except for express delivery, which comes with a 500 yen surcharge or date certain delivery which costs 350 yen.

The Nikkei MJ says they tried to compare prices of PCs, refrigerators, and washing machines as well, but it came to light that amazon does not sell most of the best selling ranges in these categories by domestic brands, so the Nikkei MJ gave up on those categories.

### CarpediemJapan Comments and Observations ###
As mentioned in the article, points are a key currency now and has proven to become a powerful price negotiating tool for the likes of Yodobashi, as well as a loyalty tool for Rakuten. But amazon has never gotten into the loyalty points game. And from the price comparisons, it is obvious that amazon prefers to offer discounts up front to reward customers now rather than later, and as they are now the largest e-tailer in Japan, it has paid off in winning loyalty as well.

Looking at the site, I have always been amazed at how much more advertising amazon is getting from outside of amazon...

According to Media Radar, Amazon's advertising prices for October through December 2010 starts from 500,000 yen for a top rectangle space with 4 million impressions guaranteed to a marquee push down, full jack package guaranteeing 10 million plus impressions for the top marquee (where you see the pink marquee ad for a set of books here), 10 million plus impressions for the top rectangle A (where you see Pepsi here), and 100 million plus impressions for the site wide mini marquee for a week costing 17,500,000 yen.

I personally know a number of people who claim to do their searches for books and entertainment on amazon, but buy on Rakuten to get the points, unless the price is significantly lower on amazon.

This explains why Google in the US feels threatened by amazon as a search engine.

Rakuten now has a Rakuten Search add-on, which enables users to earn points for searching on Rakuten and not on other search engines... Google must be really worried there, too!

Convenience has always been highly sought by Japanese consumers and that is why we have so many thriving convenient stores that operate 24/7 (most of them anyway) where they are not the cheapest options, but the most convenient places to shop.

I personally feel the fall of retail giant Daiei began with the Great Hanshin Earthquake in 1995, but as the once great retailer fell to come under the management of a once rival, Aeon, and the recent developments in the Shibuya area with yet a major department store closing, this time in Tokyo and not a rural city, it is obvious that the retail scene in Japan has changed for good.

I will deep dive into this in another article, but in a nutshell, convenient stores are great places to shop because there is a limited choice and there is no paradox of choice happening there. Consumers accept the limited selections in exchange for convenience of time and location to shop.

While some giant electric appliance stores are taking over locations from department stores and teaming up with UNIQLO, the cities are obviously not big enough for all the existing players now. So looking to utilize the brick and mortar assets to enhance the online shopping experience is probably a wise move and perhaps the fast take up of Yamada's service is a good indication of that. But whether Yamada's and Yodobashi's decision to fight with amazon head-on will pay off, or whether the odds will be better for those who have decided to join amazon if you can't beat it, is an interesting game to watch.