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Audio Japan 〜Learning Japan with You〜
This podcast is to dive into Japanese culture, trends, and some niche information.
Through Audio Japan, I aim to make you like Japan more, help you chat with people in your daily life,
have business meetings, and communicate with people from different countries.
If you wanna listen to the episode in Japanese, go to the podcast
Audio Japan 〜Learning Japan with You〜.
The audio is available on Spotify, YouTube, Apple Podcast, and so on.
My name is Taiki Arai, and I am an educational designer.
Are you someone who has a favorite item at the convenience store?
Personally, I love the dorayaki from 7-Eleven, often pairing it with a large iced coffee.
The pastry is soft and fluffy, and the red bean paste is just perfect.
So, the theme for today revolves around the convenience stores that were ubiquitous part
of life in Japan, with about 56,000 stores nationwide generating a total revenue of
approximately 11 trillion yen. Convenience stores are a substantial part of the Japanese economy.
In the first half of this episode, I'll delve into the history of convenience stores.
In the latter half, I'll dig deeper into the major three players in the Japanese convenience
store market, 7-Eleven, FamilyMart, and Lawson, and explore what makes it unique.
Let's get started.
Convenience stores, which seem omnipresent in Japan, did not actually originate in Japan.
It is said that the prototype of convenience stores was born in the United States in 1927.
The roots trace back to a single store operated by the Southland Ice Company, which initially
specialized in selling ice, but later expanded to offer daily necessities and food items.
This store, gaining fame as the Totem Store, transformed into a chain operation in 1928.
Due to its operating hours from 7 a.m. to 11 p.m., it was named 7-Eleven, a concept that
eventually spread to Japan. Many might be aware that 7-Eleven got its name from its operating
hours of 7 a.m. to 11 p.m., but it was news to me that the very concept of a convenience
store was American in origin. There are various stories about how convenience stores entered
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Japan. Some say the first store was Mami in Toyonaka City, Osaka, while others attribute
the inception to Coco Store, which opened in 1971 in Kasugai City, Aichi Prefecture.
Nonetheless, a significant turning point can be identified in the late 1960s during Japan's
period of rapid economic growth. While large supermarkets were rapidly expanding,
there was a need for coexistence and mutual prosperity with local shopping districts.
Additionally, in some areas, it was challenging to adjust to the constraints of setting up large
stores. It was under these circumstances that various supermarket companies started diving
into the convenience store business as a new venture, setting the stage for the widespread
expansion of convenience stores. Regarding the three major convenience stores,
7-Eleven opened its first store in 1974 in Toyosu, Koto Ward, Tokyo.
Family Mart established its first store in 1973 in Sayama City, Saitama Prefecture.
Lawson's journey in Japan began with the opening of its first store,
the Sakurazaka Store, in Toyonaka City, Osaka Prefecture, in 1975.
As for the origin of their names, as mentioned earlier, 7-Eleven comes from its initial
operating hours from 7 a.m. to 11 p.m. Family Mart's name derives from the idea of nurturing
a family-like relationship among customers, franchises, and the company headquarters,
aspiring for mutual growth and development. As for Lawson, it originates from a milk store
opened by Mr. J.J. Lawson in the 1930s in Ohio, USA, known affectionately in the neighborhood
as Mr. Lawson's Milk Store. With growing customer demand, the store began offering
other essentials like bread, eggs, and dairy necessities, evolving from a milk store to
the convenience store format, similar to 7-Eleven. Of course, in addition to the three companies
I've mentioned, there were various other convenience stores in Japan at the time,
including Ministop, Dairy Yamazaki, and New Days, some of which still exist today.
On the other hand, over 10 other convenience store chains such as Sakurake-Sanks,
Save-On, and Coco Store have been consolidated into Family Mart and Lawson.
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I must admit, aside from Sakurake-Sanks, I wasn't familiar with the other consolidated
convenience stores. Let me digress a bit here. I remember when I was in the 5th or 6th grade,
a toy store called Hello Mark near my house closed down, and afterward, a Sakurake was
established. I still recall going there on the opening day and making a purchase.
In such a manner, at the end of December 2023, 7-Eleven leads with 21,448 stores,
followed by Family Mart with 16,370 stores, and Lawson with 14,631 stores.
7-Eleven is indeed a step ahead among the three.
Okay, I will move on to the next topic. First, let's talk about 7-Eleven.
To describe the unique features of 7-Eleven with keywords, I'd choose dominant strategy
and system construction. Dominant strategy. This strategy has been implemented since the
inception of 7-Eleven. Dominant means to rule of control, and the idea here is to increase the
visibility of 7-Eleven stores within a certain area, thereby making the 7-Eleven brand and the
concept of convenience stores more recognizable to customers. For instance, if a store is opened
in Koto World, Tokyo, additional stores will be concentrated in Koto World.
There are several advantages to the dominant strategy. First, cost reduction. Since data
from nearby areas are already acquired, costs for new promotions can be saved.
Second, prevention of new entrants. Dominating an area with this strategy makes it harder
for other stores to enter the market. Third, promotion effect. Concentrating
stores in the same area increases the likelihood that they will catch the eye of consumers.
Indeed, adopting a dominant strategy means if there are three or four of the same stores
within one's living area, they are likely to be unconsciously recognized by people.
When someone thinks of buying something, these stores are likely to come to mind.
The second key feature is system construction. Regarding the logistic system, to deliver
mass-product products to each store in fresh condition, products from different manufacturers
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are mixed in a single truck to increase delivery efficiency. This is known as joint delivery.
For example, products that need to be kept at around 20 degrees are parked in trucks
specifically maintained at that temperature, while products requiring minus 20 degrees are
parked in trucks set to that temperature. Initially, there was opposition to the idea
of jointly loading products from multiple manufacturers into 7-11 trucks. However,
by presenting benefits to manufacturers, stores, and consumers alike, this system began in the
Kanto region in the 1980s and continues today. Additionally, one of the issues termed as the
2024 problem is the logistics problem. This stems from a shortage of drivers and aims to reduce
transportation costs and carbon dioxide emissions by decreasing daily deliveries.
Regarding the information system, in the transition to a buyer's market since the 1970s,
a unique POS, point-of-sale system, was introduced to identify what customers wanted.
It manages when, where, and by which age group each product was purchased, creating a business
model that continuously improves other accuracy by assorting and selling based on objective data
and information, and verifying actual sales results. Hypotheses are formed based on that data
and the cycle of selling, gratification, and forming the next hypothesis is practiced.
As for the product development system, based on the information obtained from the POS system,
private brands such as 7 Premium, 7 Gold, and Gold Brand have been developed.
I often rely on 7-Eleven myself when I need something extra for dinner. The 7 Premium line
has been a real lifesaver. Next, let's talk about Family Mart. In 2016, the company revamped its logo
and in 2018, it merged with Circle K Sanks. Since then, Family Mart has implemented several strategies.
Family app, Family Mart, and digital signage are notable efforts. Family Mart had reached 15 million
downloads by March 2023, a significant achievement. The reason for its introduction is the recognition
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that without collecting customer IT data in-house, retailers would be at a competitive disadvantage.
Previously, Family Mart used the T-Point card as a form of customer ID. However, reliance on
an external ID system restricts the company's ability to promote, advertise, offer new services,
or provide digital services. Like Family Mart, retail giants such as Uniqlo and Muji are collecting
data in-house. As a side note, T-Point is managed by CCC, Culture Convenience Club Company,
and T-Point is scheduled to transition to V-Point by April 2024.
Next, Family Mart. The private brand Family Mart boasts an impressive lineup of 810 products.
It would take over two years to try each one, if you tried one per day. The name Family Mart
comes from the concept of family quality, aiming to offer products of a quality and safety that
you would recommend to your beloved family. The brand communicates its appeal with the keywords
delicious, joyful, and secure, reaching out to everyone from children to elderly in an easy,
understandable manner. What strikes me is the cute branding of Family Mart and the comforting
color scheme of Family Mart, white, green, and light blue. Personally, I'm intrigued by the sweats
sold at Family Mart, which may be part of the Family Mart line. Their quality seems comparable
to Uniqlo and Muji. I became interested in this product after seeing a post about it
on social media platform X that went viral about a week ago. It makes me want to visit
Family Mart just to buy one of those sweats. Let's return to the topic.
Regarding digital signage, there are about three TV monitor-like screens above the checkout counters.
With around 15 million daily Family Mart visitors, these screens can disseminate information to a
wide audience. Even though media consumption has shifted from TV to platforms like YouTube,
the habit of visiting convenience stores to make purchases is not likely to change unless you are
living in a remote mountain village, so it's an effective way to deliver information.
Through this signage and the previously mentioned fine pay, convenience stores are evolving beyond
retail into sectors like finance and media. Finally, let's talk about Lawson. Lawson has
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adopted a target strategy that employs various store formats like Lawson Store 100,
Natural Lawson, and the acquisition of the high-end supermarket chain, Seijo Ishii.
This strategy enables them to effectively cater to different customer segments.
While a standard convenience store stocks around 3,000 products,
healthcare Lawson stores offer a total of 6,000 products, including pharmaceuticals.
This gives the impression that Lawson is more specialized in healthcare compared to the other
two companies. From personal experience, there's a Lawson about a 10-minute walk from my house
that sells pharmaceutical products. I remember once, my then-girlfriend had a fever,
and I planned to visit the store after work. All the pharmacies were closed by that time,
but thankfully, the 24-hour operation of Lawson allowed me to buy medicines and OS-1.
Moreover, as society continues to age, the ability to obtain everything one needs from a convenience
store is incredibly helpful. There are other notable aspects like the cute packaging of their
iced coffee and the recent introduction of MUJI products in stores. That's about it for Lawson.
I did some research, but many points overlapped with the first two companies,
so there wasn't much new to add. All the Japan, learning Japan with you.
It was time for the ending. While preparing for this recording, I was surprised by one thing.
Mr. Sakuma, a former TV Tokyo employee who hosted all Night Nippon Zero Wednesday,
was freely talking about convenience stores. It was a surprising coincidence that made me think,
wow, these things really do happen. For those interested, I've attached the URL of the episode
where he talked about convenience stores in the description box, so be sure to check it out and
give it a listen. He talked about it in the first half of the episode. Plus, Mr. Sakuma's stories
are genuinely interesting, and I find myself listening to them on demand during my commutes
every week. They are so amusing that I struggle to keep from my laughing out loud.
Also, as I mentioned at the beginning, if you would like to listen to the podcast,
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Audio Japan, Learning Japan with You in Japanese, please listen to it from Audio Japan.
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Thank you for listening to the end. My name is Taiki Arai, and I'm an educational designer. Thank you.