Stocking anything from shirts to face masks, 24-7 convenience stores have become an indispensable part of Japanese daily life, with the sector now worth more than Sri Lanka’s economy. Their secret? Constant renewal.
A staggering 1.5 billion people pass through “konbini” stores—a Japanese abbreviation of the English word convenience—every month, with some 55,000 outlets throughout the country, including more than 7,000 in Tokyo alone.
Competition is fierce, with two of its biggest players, FamilyMart and Uny Group, announcing days ago a merger to battle market leader 7-Eleven for a bigger slice of an industry that marketing newspaper Nikkei MJ values at some 10 trillion yen ($84 billion).
That is comfortably more than the economic output of some entire nations, including Sri Lanka, Belarus and Azerbaijan.
“In our 40 years of experience, we understand that our purpose must be to offer something new all the time,” explains Minoru Matsumoto, a spokesman for 7-Eleven, Japan’s largest chain with 18,000 stores.
“Every time we extend what’s on offer, we are creating new customers rather than taking away customers from somewhere else.”
Despite being so ubiquitous, the sector has yet to show any sign of reaching saturation point, with the number of shops—which are run on a franchise system—rising five percent from the previous year in 2014.
According to the Japan Franchise Association (JFA), the average Japanese person visits a konbini store 11 times a month and the average outlet serves around 1,000 customers a day.
While such stores are common across Asia, experts say the key to their success in Japan is their finely tuned supply chains that can monitor stock down to a single toothbrush, allowing them to sell an unparalleled array of goods.
As well as the usual drinks and snacks, visitors in konbini are confronted with a smorgasbord of useful items such as hygiene products, batteries, umbrellas, face masks, memory cards and phone chargers.
Complex logistics software keeps track of things like demographics, weather and the school holidays to predict what each store will need more of at a given times.
“If there’s a school feast day in the vicinity of a konbini… we will know we need to have more onigiri (stuffed rice balls),” said Matsumoto.
And in a work-oriented culture like Japan, where employees spend some of the longest hours in the world in the office, they also offer a home away from home.
Konbinis act as a sort of 24-hour administration centre, where customers can obtain official certificates, photocopy and fax documents, pay bills, withdraw cash and book tickets.
You can get your mail and internet delivery items sent to the store—and even buy a fresh shirt in the event of any unsightly workplace accidents.
Konbini stores continually adapt “to catch new customers, like the growing number of working mothers and old people,” said Tomomi Nagai, a senior analyst for Toray Corporate Business Research.
In a recent report, she estimated 70 percent of items they offer are renewed or repackaged each year.
Smaller mom and pop stores have been struggling to survive in the face of such flexibility, and even the big corporate giants are having to adapt.
Chains like McDonalds and Starbucks have found themselves having to review their own menus and prices to retain customers, after some konbini stores began offering fries and coffee.
“We apply a strategy of domination,” said Matsumoto. “Even if we have a 7-Eleven on a crossroad, a second is entirely justified as we might be missing out on customers on the other side of the road.”
At the same time, the konbini chains themselves are all in fierce competition with each other.
“We felt it necessary to create a larger distribution group to stay in the competition,” FamilyMart and Uny group said in a statement announcing their merger plans Thursday.
One of the secrets behind konbinis’ success is the way the stores are restocked—a streamlined, round-the-clock effort.
Most shops have no backroom storage. Instead, computers keep a track of every item sold, allowing logistic centers to dispatch exactly the right number of replacements.
A delivery truck might bring something as precise as a single toothbrush or pack of toilet roll.
This hyper-efficient system allows store owners to squeeze in more items, cut down on the need for staff and means they can fit into a larger number of smaller, cheaper properties.
© 2015 AFP