Great article in today's San Jose Mercury News. I wonder how long it will be until the US Arm is as sophisticated as the Japanese arm. This is great stuff--I think 7-Eleven might be my first put-away-for-a-long-long time stock. . .
Steve
7-Eleven logs Japanese onto the Net
BY MICHAEL ZIELENZIGER
Mercury News Tokyo Bureau
TOKYO
A war is raging to dominate the business of Internet shopping in Japan, and the combat is focusing onto a most unlikely battleground: the neighborhood convenience store.
Yes, that quintessentially Japanese institution known here as the konbini, with such cuddly foreign names as 7-Eleven and Family Mart.
In Japan, convenience stores aren't famous for peddling Slurpees and jumbo-sized soft drinks, but for dishing out seaweed-covered riceballs, sweet breakfast Danish and spaghetti lunches, while boasting giant magazine racks crowded with adult comic books that welcome lunchtime browsers.
Among a younger crowd of consumers like Yukari Yanagawa, who admits she hardly ever cooks, convenience stores in Japan have become trendy substitutes for larger supermarkets. ``I go to them all the time,' she explained, leaving a 7-Eleven store with a prepared lunch, typically a fried croquette or pasta dish that she zaps in a microwave.
Besides, unlike big supermarkets that are forced to shut by 8 p.m. because of strict government rules, most konbini stay open all night.
But in a nation where consumers are hesitant to use credit cards, where surfing the Internet on home computers is still catching on, and where most shoppers aren't home during the day to receive parcels, convenience stores may soon be the yoke that ties Japanese consumers to the e-commerce revolution.
``It's part of the Japanese culture that people want to buy products, face-to-face,' said Minoru Matsumoto, a spokesman for 7-Eleven Japan. ``There's a psychological aspect to it.' Even today in Japan, about 90 percent of all mail-order sales are paid for with cash-on-delivery or by bank transfer. No one writes checks.
In many of Japan's small towns -- and even in Tokyo itself -- the konbini has become something of a village square. Not just a hangout for 20-somethings, but a place where senior citizens can go in the middle of the night to pay their phone and gas bills, buy stamps, or pick up a quart of milk. That help explains why, rather suddenly, the convenience stores have become the hot new play in Japanese e-commerce.
7-Eleven, the largest and most innovative konbini chain, has been the most aggressive. Last November, in partnership with Softbank Corp., the Internet investment giant, it dipped into the e-commerce market by launching an on-line bookseller to deliver books and videos to the convenience store counter. Last month, it turned up the heat, announcing the formation of 7dream.com, a full-service e-commerce venture with a host of powerful partners including computer giant NEC, Sony, the giant Mitsui & Co. trading house and Japan Travel Bureau, the nation's largest travel agent.
By June the company plans to open an e-commerce Web site, where shoppers will be able to order mobile phones, airplane tickets, flowers, concert tickets and digital music from their own computers and pick them up at the store of their choice. By fall, 7dream.com will begin installing multimedia terminals in its 8,153 stores that will not only give shoppers without PCs access to Web shopping, but also print out tickets, download music and accept cash payments.
``It's important the customer feel at home,' Matsumoto said, noting that many Japanese customers are nervous about using credit cards or putting sensitive information on line.
Toshifumi Suzuki, chairman and CEO of 7-Eleven Japan, notes that 93 percent of the customers for its online equivalent of Amazon.com picked up their books at the counter. ``We are different from the Americans in terms of the maturity of our telecommunications,' he explained recently to a Japanese newspaper. ``The Japanese customer wants to make sure he gets the products at the store -- and wants to pay there.'
His Internet-in-a-store strategy has quickly triggered imitation. In recent weeks Family Mart, Circle K and three smaller convenience store operators announced that they too would form an alliance to conduct e-commerce in their shops. And even the Japan Railway network, which owns thousands of kiosks in the bustling railway stations around the country, has suggested that it too would begin offering trackside delivery of products ordered over the Net.
But analysts believe 7-Eleven could be the best-positioned to capitalize on the potential of e-commerce, which the Ministry of International Trade and Industry estimates could account for 3.16 trillion yen worth of business by fiscal 2003. That's because the company has already pioneered the sophisticated use of computers and information technology within its store.
The company prides itself on how extensively it mines its point-of-sales data collection to anticipate consumer needs. The same satellite broadcasting system that 7-Eleven now uses to collect order data directly from its individual stores will also serve as the backbone for the e-commerce system.
Rolling out convenience store e-commerce will also bolster another move by 7-Eleven's owner, the Ito-Yokado chain of discount superstores, to open its own online bank. The Ito-Yokado bank would conduct almost all of its business through ATM machines located in its stores, including 7-Eleven.
Shinichi Kimura, a 30-year-old bicycle messenger, says he'd welcome more e-commerce at the konbini. ``At the moment, we've been told that anyone can easily hack our credit cards,' said Kimura, who often buys lunch and snacks at 7-Eleven. ``But if they have a cash dispenser and more information services, it will definitely be more convenient.'
Emi Doi of the Knight Ridder Tokyo Bureau contributed to this report. |
