Inhibitors And Drivers In Japan’s Retail Market

I spent last week in Tokyo, Japan.  Given that an increasing number of our clients are eyeing Japan’s eCommerce market, I thought it would be interesting to share some observations from my trip. Local business perception is that the economy is struggling and will persist to struggle, but robust activity on the street and our most recent Asia Pacific Forecast belie that. There is clearly potential for growth in the market, but changes need to be made before that can happen. Based on my observations, the key inhibitors are:

  • Low adoption of English in the business world. Japanese is the primary language used to conduct business in Japan. Understandable in the world’s third-largest economy. Many understand English, few are comfortable using it in a professional setting. This issue makes it hard for broader penetration globally across eBusiness. A notable exception is maverick Rakuten where employees are required to have strong English language skills.
  • Retail is aggressive but mostly single channel in focus. Companies I talked to are trying to understand cross-touchpoint attribution, but there is little evidence of multichannel sales in those stores. BIC Camera, one of the largest consumer electronics chains in Tokyo, for example, offers an enormous selection without the option to purchase across different channels.
Read more

Our Cross-Channel Numbers Show ‘Showrooming’ Could Be Overblown

Consumers are now in control, especially when it comes time to buy. Ubiquitous connectivity allows consumers to easily check prices and buy on the go, which should worry (not terrify) traditional retailers in competitive categories. This “showrooming effect,” which has been encouraged by Amazon, would enable web retailers to snatch some sales from the hands of their brick-and-mortar competition. A majority of sales are still happening offline, so the fear of showrooming — that most people are finding screaming deals online — is largely exaggerated. In fact, the majority of transactions still happen in stores, even when shoppers research online (yes, even when they’ve got their mobile devices in hand in a store).  Forrester’s US Cross-Channel Retail Forecast, 2011 To 2016, which launches today makes it clear just how influential and critical the web channel will be to eBusiness professionals in retail. By 2016 Forrester predicts that more than half of the dollars spent in US retail will be influenced by the Web. Already in 2011, $1.3 billion dollars in the US fall into this category.

It is imperative for eBusiness professionals in retail to adopt cross-channel best practices, including:

  • Pricing more consistently to reduce vulnerability to showrooming. The ability of shoppers to comparison-price shop and demand price matches requires retailers (and manufacturers) to reduce price discrepancies across all channels. With comparable pricing in place, this forecast suggests that many consumers may in fact nonetheless choose to purchase products in stores because of the immediate availability, service levels, or simply because products online do not have significant benefit over those in stores. 
Read more