Evolving retail sector in Japan

23 February 2021

Surviving in a challenging and rapidly changing environment such as retail business is not a trivial endeavour. Japan's retail sector servies as an example of waht it takes to sustain your positions in turbulent times.

Did online delivery kill the vending machine?

For 40 years the vending machines have been a reliable and solid source of profit for their owners in Japan. However, with the lack of innovation and consumers shifting toward online delivery, this retail channel risks falling behind. Contrary to industry trends, Coca-Cola Bottlers Japan Inc. (CCBJI), Japan’s largest bottler, sees a unique opportunity in revamping its network of almost a million vending machines around the country. Indeed, this is one of the few channels through which the company can reach its consumers directly. While the industry is moving toward unmanned retail model, CCBJI already have one in their vending machines. The benefits of digitising the system are threefold. First, the new system tells the company what to sell, how to sell, and at what price, depending on the location of the machine, the proximity of competitors, stock availability, etc. Second, with an introduction of a new loyalty program, CCBJI can make better sense of the valuable data generated by the vending machines. As consumers buy the beverages with their phones, promotions and incentives are tailored to their consumption habits. Third, new technology optimises the supply chain: from delivery routes to the load of each machine. Within just four months of implementation, CCBJI have disposed of 1,000 trucks. More digital transformation is planned for vending machines, as the company recognises the potential of this retail channel.

Read the article on the McKinsey website.

Pandemic sparks transformation in Japan’s retail marketing

The pandemic is altering consumer behaviour in Japan. A recent survey reveals that consumers are spending less time shopping at supermarkets, as more people decide what to buy in advance. To address this trend, retailers and manufacturers are forced to reduce their product portfolio. As a result, large brands and their signature products are now becoming more popular. As new product developments are hindered by pandemic and products continue to disappear from the shelves, retailers and logistics companies are suffering from reduced business. Supermarkets and food manufacturers will need to transform their marketing strategies if they were to remain competitive.

Read the article on the Nikkei Asia website.

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