The Ultimate Exploration of the Consumer Experience is the Key to Upgrading and Differentiating
Since Jack Ma first proposed the concept of "new retail" in 2016, Ali and Tencent have been stirring up a wave of new retail in the retail world.
In 2019, this wave is still raging. It's just that the road to transformation for traditional retail is not a good one.
In fact, retail is still the same retail, the essence of operating customer flow has not changed, nor has the model of creating value for consumers based on goods.
What has changed is the increasing demand for value from consumers.
Retail companies can only survive and thrive in this new era by continuously adapting and iterating on various types of outlets around their consumer base.
Looking at the retail industry as a whole, it is indeed worthwhile to learn from the way the Japanese retail industry operates.
For example, LoFt Department Store has an average annual sales of over $1 billion per shop; Hankyu Hanshin Department Store has an average annual attendance of over 50 million; Niaoya Bookstore has become synonymous with new bookstores and experiences, and so on.
Let's start with these examples and analyse the essence of the Japanese retail industry that we can learn from.
How did LoFt achieve an average annual sales of over $1 billion per shop?
How did LoFt achieve an average annual sales of over $1 billion per shop?
LoFt started its business in Shibuya, Japan, in 1987, specialising in groceries. To date, LoFt has over 120 brick and mortar shops in Japan, all with annual sales of billions of RMB.
Behind LoFt's success is a quest for the ultimate consumer experience.
And looking deeper into what makes LoFt the ultimate experience for consumers, there are two main reasons.
One is that the category product mix space is constructed with the lifestyle that consumers prefer.
LoFt is like a large creative marketplace, selling a variety of fresh, fun and creative general groceries, from stationery to lifestyle products, cosmetics, food, tableware, creative design and more.
Although LoFt is targeted at young women aged 20-30, the range of products available in the store is entirely family-oriented, ranging from women's products to men's products to baby products.
Secondly, there are countless brands available in each category, such as the PENCIL BAR store in LoFt. It brings together a variety of speciality pencils from around the world, covering a wide range of brands from Portugal, London, the Czech Republic and many other countries.
Secondly, it offers differentiated and customised services.
At LoFt, consumers can not only shop for products but also participate in workshops held in-store, an initiative that greatly satisfies consumers' sensibilities.
In addition, LoFt also has a 3D doll customisation workshop, which allows you to customise your unique 3D printed portrait.
How did Hankyu Department Store achieve an annual traffic of over 50 million customers?
How did Hankyu Department Store achieve an annual traffic of over 50 million customers?
The Hankyu Department Store, which completed a deep renovation in 2015, had an annual traffic of 50 million customers, compared to 31.37 million for Tokyo Disney at the time.
How did this department store, which was founded in 1929, achieve such an impressive level of traffic after spending seven years on its renovation?
Analysing the reasons behind this, we found that the theatre-type department store created by Hankyu Hanshin was the key to making it stand out compared to traditional department stores.
While traditional department stores set up their spaces as outlets to promote sales, Hankyu Hanshin sets up its spaces as venues such as exhibition halls and stages.
This space setting allows Hankyu Hanshin to have a more prominent artistic value, and the enhanced artistic experience diversifies Hankyu Hanshin's audience.
For example, in the outside sales area, Hankyu Hanshin Umeda has set aside 20% of the area for regular events such as craft bazaars and art exhibitions.
Before these areas were set up, customers stayed at Hankyu Hanshin for about 55 minutes, and with the various exhibitions, the average stay was three hours.
This is inseparable from the theatre-type department store it has created.
How did Niaoya become the largest bookstore chain in Japan?
How did Niaoya become the largest bookstore chain in Japan?
Niaoya is not just a bookstore, it is a living proposal house.
Instead of the traditional bookstore approach of categorising books according to their form (travel guides, reference books, manga, etc.), Niaoya's concept of "the book lover's personal bookshelf" is to categorise books according to their content and life scenarios, and to set up a mix of bookshelves and reorganise the bookstore space.
Niaoya Bookstore's lifestyle proposals include not only shopping, but also related businesses. For example, alongside the cooking books there are displays of sauces and kitchenware, and in the travel books section in particular, there is a travel advice counter where customers can both book plane tickets and ask for the travel information they need.
Its founder, Soaki Masuda, has published a book, "The Capitalism of Knowing", which sets out his core views on the physical retail sector.
He divides customers' shopping needs into three categories: immediacy, directness and comfort, which correspond to the three retail formats.
Comfort, which is Masuda Soaki's competitive differentiation strategy, is also Niaoya Bookstore's way of innovation.
By designing the retail outlet as a comfortable scene in time and space, the process of buying goods is made pleasurable, where consumers can relax at leisure and "make their bodies and minds beautiful and meet beautiful people".