ERE’s chairman – Eric Poiret, served as a resource speaker for Alaska Milk Corporation’s National Sales Conference 2019.
Eric Poiret – ERE’s CEO and chairman had recently been invited to Alaska Milk Corporation’s National Sales Conference 2019 as a guest speaker. The event was held in Waterfront Hotel Cebu last February 19, 2019. Eric acquired his retail expertise in his thirty years of retail chains management in the Gulf Region, Asia, and France. During the event, he imparted his knowledge with Alaska Executives on the recent trends that will help shape the future of retail. For Eric, one of the key qualities that a retailer must have is to always be one step ahead by anticipating and closely observing what is happening in the market. Another key takeaway during the event is the retailer’s expectations from their suppliers. Eric keenly developed and explained what these expectations are and why it is important for manufacturers and suppliers to take them into consideration. These would all be in pursuit of achieving a common goal among everyone operating in the retail industry which is to provide consumers with a better experience, more customer-centric services, and innovative ideas that will make shopping not only easier but more fulfilling. He ended his presentation by emphasizing the value of coming and working together. As cliché as it may sound, it had been proven effective for so many years. The power of a focused and determined person may be formidable, but every successful individual knows that a goal is better achieved by people sharing a joint responsibility.
I would like to take the opportunity of this writing to wish you a very good 2019.
I am sure that the economic trend and lessons taken from the previous year about managing inflation will be favorable factors to the success of your plans and different ventures.
I had the opportunity to travel to France during the holidays. During my stay, I visited a lot of supermarkets and hypermarkets, two favorite French retail formats.
We have been hearing a lot of news about the degradation of the French economy and the action and impact of the gilets jaunes on the business during year end. This is probably true but I also saw a lot of customers in the stores buying profusely for the celebrations period.
I was impressed by the volume of merchandise available, the quality of the displays and the modernity of the concepts. Stores are not driven by a real estate approach, selling space to suppliers. You hardly find a brand signage, it is very clear that the store belongs to the retailer.
The goal which is selling more and more items to more and more customers is extremely felt in the outlets. The economic model is mainly based on volume sold. Quantity on display is not questioned and the depth of the range is not compromised, proposing a wide selection of regional products. Promotional displays for every end cap are massive with a large yellow signage, very often hand written. Dedicated discounts for loyal customers are available for each category.
Fresh displays are also impressive through volume, range, display quality as well as freshness of the products that transpires everywhere in the area. Stores are obviously equipped to maintain the cold chain. Street market ambiance is being preserved. We commonly say that we buy with our eyes, this will be held particularly true in the Fish, Delicatessen and Cheese sections. Similarly, you can hardly resist to the smell of the bread and “viennoiseries” section. You will also be amazed by the wide offering of pre-packed fresh food, so convenient for every family size.
Services proposed by retailers are convenience oriented. The “drive” concept (your order and pick goods) is largely developed. Customers are also now used to self-scanning options. Electronic labels are on every shelf, guaranteeing price accuracy.
We could argue that the French food culture is unique, the climate very favorable to Freshness, the hypermarket concept that started in 1960 is already mature: these are all true.
However I see this concept as an opportunity for inspiration in many ways. It starts with the principle of the concept: complete control approach by the retailer instead of being real estate oriented or vendor oriented, risk taken on the stock and promotions, commitment to promote regional sourcing, creating a sense of authenticity for the customers, specifically but not limited to the fresh sections. True and large benefits granted to loyalty card holders.
Advanced technology is only brought to enhance the customer’s shopping experience. Most of the solutions for faster payment are based on trust. Are retailers ready to give it to customers? Should the focus be on the process to progressively educate the customers?
With the online business development, physical stores are actually challenged. There is a trend to reduce big boxes assuming that a part of the business is and will be taken online. Convenience stores or smaller grocery formats are also seen as a threat. But in reality, they catapulted to growth as they occupied the space not covered by larger formats.
In fact, I see the size concern differently for the food retail business, particularly in countries wherein the size has been commonly compromised. Based on my experience, larger size stores with well-chosen locations provide retailers the opportunity to entirely express their commercial concept, and most often become the flagship(s) of the retail chain with a very superior sales level and an enviable profitability over time.
This might be perceived as counter trend but the “applicability” of the trend is a question of maturity in the retail business. Let us take this new year as a chance to seize the true opportunities awaiting us in the retail industry!
Millennials on the past years have gained the spotlight in the society. Though their sphere of influence had been around for quite some time, getting familiarized with them is still a tedious job at hand.
According to the Labor Force Survey, Filipino Millennials accounts to 47.1% of the total workforce in 2015. With this data, it would be easy to conclude that Millennials will be a bigger and bigger determinant in decisions that every retailer should make. But in order to fully capture the attention of Millennials might be a little tricky as they are more diverse hard to predict compared to their predecessors. It is worth considering that in order to understand their spending behavior, it is important to know the factors that pushes them to make their purchases.
Spending habits of Millennials
Getting used to the purchasing behavior of millennials can be challenging. For one, the factor that pushes them to decide to buy a certain service or product can be highly subjective. Millennials have a knack to purchase anything that would make them feel good and important than others. It is highly imperative for retailers to make sure that the products they are selling are always in the best possible condition and the shopping experience is memorable for the consumers. Millennials are after experience that will make them a star of their social media accounts. Most of the time, the purchases that millennials make are for validation that they are having a good life, or in a more millennial term, completely “instagrammable”.
Another common behavior that can be observed among the said age cohort is their maturity in making their purchases. Millennials are always tagged as “Smart Buyers”. This is a good connotation most especially if you belong to the age group. Yet smart buying is not intrinsic among millennials. This could be reflected on the factor that the current situation is pushing millennials to be wiser in spending their hardly earned money. It is important for retailers to take this factor into consideration to make sure that the products and services they are selling to this age group will always be worth the price, or better yet, make consumers feel like they are getting more than what they paid for.
It can also be noted that Millennials are keener to pay for experiences than material objects. The number of traveling agencies have grown dramatically over the past years and the rising inclination to travel also distinguishes Millennials from its predecessors. Again, traveling can come as a self-gratification that you are getting more than what you paid for. Experiences and memories are intangible and it cannot be measured by durability, taste, or appearance. Anything that can give you a sense that you’re getting something that cannot be measured keeps Millennials – and even other generation to be on their feet traveling and seeing the world. Retailers are not blind to not see this trend. Most companies are coming up with branding strategies that can capture travelers. Such as coming up with freebies that would come in handy while traveling, making travel-size packaging, using flight tickets as prices to certain promos and other travel-related marketing strategy.
Millennials are more diverse
In order to successfully market to millennials, it should be accepted that they are a diversed group. The interconnectedness brought about by technology and social media gives the millennials the space to freely express their varying opinions and beliefs and feel totally fine with it. In fact, in the present time, being different from a pack is not frowned upon like in the past and respect for other’s opinion and preference is highly encouraged.
To cater to multi-faceted millennials, retailers should always tailor-fit their services and brands that could accommodate specific segments in the society instead of the usual generality in the demographics.
Interconnectedness among Digital Savvy Millennials
As previously mentioned, Millennials are digital savvy individuals interpolating technology to communication and self-expression. They use the digital platform not only to communicate with the people they know but also to express themselves to other people, whether they are the ones they know on a personal level or not. Needless to say, more and more people are populating the online world nowadays. Retailers had been quick to recognize this. Though e-commerce is not a new concept, it continues to innovate each year by coming up with a more convenient way to sell products and services, as well as becoming more consumer-centric.
It is important for retailers to gain presence or start on being recognized in the online platform. This is proven to be a very effective medium of communicating with consumers as well as boosting the company or the store’s reach.
Are millennials completely taking over?
It is a highly contested topic whether millennials are completely taking over or not. Some of their predecessors are still in the workforce and are still making a significant percentage of population in the market with high purchasing power. Though it is imperative to be prepared with the rising influence and number of millennials, it would be a fatal mistake to disregard other generations. The past generations are the ones with more dispensable income to spend and retailers should always keep that in mind. The best advice would always be to be prepared on whichever medium a consumer would choose to use as well as be prepared on whatever generation your prospect customer would belong to. The current situation calls for retailers to be more flexible than ever in order to cater to their consumers’ demands.
Majid Al Futtaim is famously known in Middle East as a retail company giant. Yet for people well-conversed in the retail world, Majid Al Futtaim is a business magnate who knows how to seize opportunities that is hidden from plain eyesight for most people. He is someone who knows how to set his vision and can dauntlessly invest time, resources and effort to make that vision a reality even on the long run.
1994 witnessed the opening of the first MAF Mall with Continent, one of the leading French Hypermarket brands, a main anchor tenant.
The hypermarket was built inside what is famously known today as Deira City Center. As of today, DCC is surrounded by commercial and residential buildings – a stark contrast to how it was 23 years before when it is situated in the middle of nowhere. Majid All Futtaim, through his vision saw this as a good opportunity. After all, why build a business surrounding others when you can let others surround yours?
Just as many success stories, Majid Al Futtaim faced difficulties particularly at the onset of his retail business. But the visionary know that stopping is not an option when it gets difficult. To make up for a better planning and management of the business, Majid Al Futtaim hired retail experts from Europe, mainly from France to help the business grow. Being a wise risk-taker, Mr. Majid knew that the key to make his business grow is investing on people who have the expertise and experience to prepare his business for development and to harness its potential for growth at its fullest extent, using the best retail standards and practices not just in France, but from the whole world.
And just as expected, the business grew. In 1998, MAF retail launched its second hypermarket branch in Ajman to spread its influence and exposure.
Dominion over the region
Majid Al Futtaim continued the vision to hold dominion over the region. Several branches quickly opened up in UAE particularly in Al Ain, RAK, Abu Dhabi and Sharjah. By year 2000, Carrefour’s acquisition of Continent enabled the change in the name of hypermarket’s name and logo yet the quality of services was not altered and still operated with the same recipe for its success: strategic sites, large footprint, mid to large size malls and strong hypermarket concept as a foot traffic driver. Furthermore, the change of the brand to Carrefour only strengthened with the support of French Retail Leader.
The peak of MAF’s success could be seen upon the development of Mall of Emirates. Being the visionary that he is, he built the mall despite its isolation and opened it in 2005. The mall is notable for its architectural design, innovation, accessibility, tenant mix, hotel selection and large hypermarket. Mall of Emirates is manifestation of group expertise in planning, designing, managing projects and operating malls. It clearly reflects the demand for perfection by its owner, Majid Al Futtaim. Easily, Mall of Emirates can be compared to top malls around the world.
The hypermarket concept
The concept of “everything under the same roof” rapidly gained success. Year after year, it was improved and modernized while adding value to the product range. However, apparel department with basic items and poor development in novelty or fashion items remained its weakness. Similarly, Asian food product range used to be behind – a mistake considering that more than 50% of the population living in Dubai are Asians.
On a positive note, the management kept on modernizing the electronics and appliances department that hit the highest market share among Carrefour Stores worldwide. All thanks to the tax free environment in Dubai, which led to comparatively cheap prices attracting more visitors in the country. It is common to see people at the airport bringing home electronic gadgets that they had just purchased.
The management of the Fresh Department was also ameliorated step by step. The concepts such as bread and pastry, meat, and fruits and vegetables were improved to meet European standards.
The overall concept went through changes year after year, CEO after CEO. Moving from a basic supermarket to a modernized version of the hypermarket. The discipline in managing the stores was also a contributing factor – from asset standards to cleanliness, hygiene standards and product availability.
A Competitive Environment
The competition surrounding MAF stores became progressively more aggressive each passing year. More retail brands opened, developed and benefitted from the positive economy of the region. Lulu, Carrefour’s main competitor, was able to develop faster with an arguably more flexible size and less complex concept than MAF Carrefour.
On the other hand, small and local cooperatives with scheme dedicated to national citizens and with comparatively cheap prices remain an alternative for the mass market.
Another brand, Spinneys, captures mainly the expats’ market with a more premium concept covering small and medium size supermarkets. Instead of fully competing with Carrefour, they went with a different concept, capitalizing on the superb management of fresh products as well as offering unique and exclusive imported product range. When it comes to the Asian products range however, Carrefour had also set its eyes to observe Choitram, particularly its supermarket concept.
Carrefour outside UAE
Though MAF Carrefour was proven to be a true success in UAE, Oman and Qatar, its development out of its comfort zone had been sometimes challenged for various reasons.
Political Stability MAF success and expansion in Egypt has been challenged by the political unrest happening in the country that time. Lately, the introduction of the VAT in the country played another negative factor role. However, the investment remained a smart move for the company. To the contrary, the unpredictable turn into a civil war in Syria ruined the Plans of MAF to develop in the country after the opening of the first store in Aleppo which also closed due to unrest in 2011.
Aggressive and Dominant competitionIt can be argued that Saudi Arabia has been one of the most difficult exercise for MAF as the country was already dominated by strong local players specifically the main retail chain in KSA: Panda. Panda’s outlets are scattered all over the country with a solid commercial concept demonstrated in their hypermarkets and supermarkets. Other local retailers are also driven by low cost approach which Carrefour had difficulties to answer considering their sales volume and standards to maintain.
The recipe for success
It has always been said that there is no definite secret to success. Different stories, different recipes. Yet for Majid Al Futtaim, it is a story of setting the right vision and taking risks to transform it into reality. He followed his exemplary intuition then transformed them to opportunities. More importantly, he placed his trust on the people he surrounded himself with. He knew that these experts in the retail field will not fail him and the business they worked so hard to achieve. His business is not simply made of investments, it is made by people and for the people.
MAF’s group of advisers are always on the look for opportunities and propose strategic development. The relationship between Mr. Majid and his advisers can always be described as mutual friendship and protection. A solid partnership between parties that will not let each other down is one of the foundation of his business. However, knowing that change is constant, he doesn’t hesitate to change plans or people as the situation requires it. In this way, the company, despite being susceptible to change is always able to keep up and thrive.
Mr. Majid also knows that his company alone cannot be independent of government. He established a politically correct and good relation with Dubai Government, particularly with Sheik Maktoum. Sharing the same vision for development and success, MAF Retail had always been in close and cooperating ties with its “mother” government.
The Mall development and management expertise
MAF Malls are not only a reference in the gulf region, but also a model for the retail industry worldwide. The expertise in developing and managing medium to large size malls and the transition of mass market oriented malls to reasonably luxurious malls were established. Mall of Emirates had always been considered as a piece of art in the industry offering innovations in entertainment such as ski station among others.
The tenant mix in the mall was improved and the attractiveness of the malls was also proven. Because of this, regional and international brands lined up to be part of MAF Malls despite considerably higher price for rent. The selection of restaurants was also well sought, from quick food to fine dining experiences.
Again, experts from other countries contributed to the growing success of the Mall concept, offering competitive advantage to Carrefour Hypermarkets.
MAF Retail: From a centralized to a decentralized retail organization
From the opening of Continent in 1994 until early 2000’s, the head office structure was almost non-existent, limited to a CEO, a Vice President and CFO to ensure financial reporting. The management of the operations and the merchandise were totally delegated to the stores. But after 8 years of experience and maturity in the retail world, MAF Retail set a head office structure with a merchandising department.
Between 2003 and 2010, MAF Carrefour strengthened the corporate office and support to stores primarily due to the influence and help of a new CEO back then. With the expansion, an international head office was also created to ensure consistency in management across different countries, alignment in standards and correct setting of corporate governance principles.
Initially led by French Retail Experts from the support group to operations, the Profile of the managers progressively changed with a strong “Arabization” of the management which seemed to be a natural characteristic among Arab countries. Internal promotions were also prioritized to face the fast development pace.
As MAF Company evolved and grew in size, the corporate governance was put in place and control over MAF retail operations from the holding limited its autonomy, different from what the retail management enjoyed for several years. For the past decade, the management of the stores was totally strategized and controlled from the head office, leaving little space for individual initiatives. Thus, the influence of international experts is limited to core support functions of the head office as few remained to operations.
Partnership with Carrefour
In 2013, MAF Holding acquired the remaining 25% stake from French Retailer Carrefour Group for 530 million euros. From a joint venture, MAF Holding held the regional franchise for Carrefour – the world’s second biggest retailer after Walmart. Under the signed agreement, MAF will own 100% of the shares and the franchise will be extended until 2025.
MAF Today
MAF continues to do excellently in its home country, UAE. 2017 was another year of record, however, there are some fears on the impact of the VAT implementation in the country after years of enjoying tax-free privilege.
MAF also continues to thrive well outside UAE as it is now present in 15 countries operating a total of 90 hypermarkets and 120 supermarkets.
Among the countries it had reached, Iran seemed to be a very promising country as one of the two Carrefour stores is already challenging the food sales performance of MAF’s branch in MOE. Pakistan also displays a promising market. However, Eastern European countries seem to be in resistance to the company’s proven model as it remains challenging to MAF Retail.
MAF in the future
Mr. Majid is without any question the man who turned his vision into reality. The idea and process of developing medium to large malls with unique standards associated to a traffic generator such as Carrefour or Continent at the beginning was a very innovative strategy 20 years back in UAE and Gulf Region. It had not been an easy start and the risks are high, but the true visionary that he is, he decided to move forward. Fast forward to 25 years after his company was first founded in 1992, the success of Mr. Majid is nothing short of amazing.
In managing his business, Mr. Majid was able to avoid the traps of changing category, from a small company to a large company, he made it a point that strict compliance with corporate governance principles will remain. Another reason for its success can be attributed to the establishment of a proper delegation of authorities. While most business owners would have difficulties to let go of their businesses and delegate authority to the management in place, Mr. Majid put his trust on his people and did not waste time doubting the people who also put their trust on him. Delegations with proper control level have been in place since the beginning to the point that even Mr. Majid and his advisors have limited interferences in the day to day business as he had always put his focus on prioritizing strategic development for longer term goals in order to safeguard his company from possible challenges that could affect it in the future.
From this point, it will be needless to say that MAF Retail’s future is already envisioned somewhere in Mr. Majid’s mind. His actions are always determined by his plans and he’s someone who can hardly be caught off-guard by any incident or circumstance that will be brought to the retail world – which is how retailers must always strive to be!
As most countries in Asia, Indonesia’s retail also relied on traditional-oriented market. However, in the recent years, Indonesia had a visible growth in modern retailing. The growth and trend in modern retailing was fueled by the rising middle class, higher consumer confidence, rising personal income and with the majority of its population being more conscious and inclined to imported brands.
Traditional markets still continue to dominate the retail sales at 83.25% and modern retailing accounting for the other 16.25% (supermarkets, hypermarkets and convenience stores) on 2015 according to the latest data by Euronomonitor. However, growth on the number of outlets for traditional market is comparatively low to the growth posed by modern retailing outlets. The growth in traditional market by 2015 accounted only to .2% while the modern retail channels had significant growth – supermarkets at 2%, hypermarkets at 7.70%, and convenience stores at 15.3% also on the same year.
Growth in Indonesia’s Modern Retail Store Outlets 2015 (Source: USDA, Euromonitor)
Convenience Stores hold the largest sales among modern retailers accounting to 104.6 trillion IDR followed by Supermarkets with 66.2 trillion IDR and Hypermarkets with 42.9 trillion IDR, all in 2015.The three store formats posed continuous growth within the past years indicating that modern retail in Indonesia is a trend accepted more and more every year.
Sales in Modern Retailers 2015 (Source: USDA, Euromonitor)
Though traditional markets had been the center of retail activities in Indonesia for years, big malls, supermarkets and convenience stores are quick to replace this retail channel as they show convenience as well as entertainment.
Modern Retail Expansion
Expansion of Indonesia’s modern retail started in 1999 when the government allowed Carrefour, a French retailer to expand its operations in the country. As of today, the company is locally owned and operated by Trans Retail under the name of Trans Mart with 92 branches nationwide. More modern retailers from different countries followed and made their entry in Indonesia – Lotte Mart from South Korea which has now 43 outlets, Hero from Hong Kong which has now 35 outlets and the latest entry is on 2015 with Aeon Supermarket from Japan. Local major retailers still prevail in the retail landscape. Most notable among the local major retailers are Alfa Midi with 1,022 outlets, Giant with 172 outlets, Lion Superindo with 136 outlets and Hypermart with 112 outlets. Some of the companies operate various store formats: hypermarkets, super markets and mini groceries.
Convenience Store are expanding rapidly in Indonesia every year. The introduction of 7/11 in 2009 paved way for more outlets to expand throughout the country. Indomaret is a local convenience store holding the most number of outlets nationwide. As of today, Indomaret operates13,099 stores. This is followed by Alfamart with 11,115 stores and the rapidly expanding Circle K which has now 500+ stores.
Supermarkets and convenience stores did not only grow but also developed. Top supermarket retailers have wide assortments of imported products that are readily available for locals and foreigners in Indonesia. One of the primary reason why foreign nationals won’t find it hard to shop in the country.
Imported Section in Foodhall Gourmet, Plaza Indonesia, Central Jakarta
Besides the wide assortment, both local and imported products, supermarkets and hypermarkets also have in-house bakery and a food-to-go section, making every shopper’s need available in one roof.
In house bakery and ready to eat section in Hypermart Jogja
Success of Convenience Store among modern retail channels
As stated in the data above, convenience store shows the largest growth among all the retail channels in the country. Approximately, there are 25,278 convenience store/minimarket outlets constituting to a 15.3% growth rate on the number of outlets in Indonesia (Euromonitor, 2015). The growth of convenience stores is a trend observed in other Asian countries as well. In the Philippines for example, the growth rate in convenience store outlets is at 20%. However, the real store count falls far behind compared to that of Indonesia as it only has approximately 3,687 outlets according to the same source. The success of convenience stores in Indonesia could be attributed to the fact that there’s a higher population density among its major cities, notably in Jakarta. Higher population density poses higher demand for convenience as most people would prefer to shop on mini groceries or convenience stores in every street corner than spend more time in the usual traffic jam and extra budget to pay for fare going to supermarkets or shopping centers.
Moreover, it is also worth noting that convenience store channel in Indonesia doesn’t only increase in number but also innovate. More than just a place where people can complete their basic purchases, a standard convenience store in Indonesia also serves as a place where people can transact different services such as bills payment and money remittance center. Their convenience stores are also equipped with ATM Machines inside where people can easily withdraw cash from their cards. Taking a “one-stop-shop” to a new level, most stores have wider dining areas where a free wifi can be accessed.
Indomaret Convenience Store outlet in Jogja
Promising potential in Indonesia’s E-Commerce
E-Commerce also has a very promising potential in Indonesia as it is the country with the most mobile internet subscription among its neighboring Asian countries. It has a 172% growth rate far from 121% of Cambodia. Philippines falls far behind at 42%. More and more people are relying on online stores to make their purchases as a greater part of Indonesia’s population are in their 30s and busy with daily work.
Mobile Internet Subscription among Asian Countries (Source: HKTC)
Another great development in the retail landscape of Indonesia is that modern retailing is not only concentrated in its capital city. Malls, supermarkets and convenience stores are spreading significantly throughout the East Java, North Sumatra and North Sulawesi as well.
The evident growth in Indonesia’s retail sector is characterized not just by high rise buildings of retail stores and the growing numbers of convenience stores in every street. It can also be reflected upon the consumer spending, consumer behavior and trend which relates to the population being more inclined on imported brands. As retail sales figures continue to soar high, Indonesia is a promising place for foreign investors. The modern retail sector in the country holds huge potential for consistent growth. Competition among retail channels will also encourage further expansion among major retailers. However, it is certain that modern retail will continue to prevail and will soon dominate the market share in Indonesia as the income of people increases along with the demand for convenience.
When people talk about convenience and quality of services, we can definitely give it to the Japanese people. They know the value of not just money, but also people’s time. That’s why convenience stores or “konbini” as what it is locally referred to definitely takes our definition of a “one-stop shop” to a whole new level.
More than 50,000 convenience stores can be found in Japan. Every street corner even to the most provincial places has convenience stores. It’s where people usually go to purchase their food or simply to have coffee and have a rest from the cold outside. There is a fierce competition among major convenience stores operators in Japan such as 7/11, Family Mart and Lawson. This competition enables them to come up with innovations and creations of products to make the experience truly convenient for their consumers.
Each store has a wide variety of ready to eat food. For most Japanese people who just wants to grab something to eat because of their busy schedule, convenience store is definitely the place where they go to. Besides the fact that it’s a fast purchase, ready to eat food in convenience stores doesn’t lack the quality and good taste other restaurants also offer. Though most foods offered are Japanese, there are also Western food like pasta and sandwiches that can be purchased. The store clerk will always offer to reheat the food.
Other items such as cold beverage, ice creams, packed biscuits and snacks, alcoholic beverage and other food items can be found in convenience stores. These products also change depending on the season.
Besides food items, personal care products, cosmetics, batteries and other basic necessities can also be bought inside the convenience stores. Books, manga series, newspapers, magazines, and umbrellas are also available.
It’s hard to hail a cab on some places in Japan, most especially outside city centers. That’s why most convenient stores in these areas have a phone that a person can use to call a cab. Aside from this, these convenience stores also have public restrooms that people can use.
ATM Machines can also be found inside the convenience stores. Besides the banks, people go to convenience stores to withdraw their money from their ATM Cards. Branches of 7/11 have ATM Machines where international ATMs such as visa and mastercard can be accepted and used to dispense Japanese yen.
ATM Machines found on 7/11 stores
Multi-copy machines can also be used inside the convenience stores. But instead of the typical photocopier, they can also be utilized to send fax mails, print digital pictures and print documents from flash drives.
Example of Multi-Copy Machine found on convenience stores
Another innovative machine found on Japanese Convenience stores is what they call the Loppi Machines. These red-colored machines can be used to buy tickets on various events in Japan such as concerts, sports, theme parks or even travel services. Once the machine dispensed the ticket, it can be paid directly to the counters. Besides tickets, the multi-purpose machine can also be used to confirm purchases made online or simply for bills payment (i.e. utility bills, insurance bills, cellphone bills). Loppi Machines make payments very easy as it can be made in many convenience stores. However, some machines don’t have an English Interface making it hard for foreigners to operate. Despite this, one can always ask assistance from the store clerk and they would be more than willing to help.
Example of Loppi Machine
Finally, as most public places in Japan, convenience stores also offer free wifi access for a limited number of hours. For people passing by who need a drink and a place to rest, specifically tourist who also need the internet for directions, the stores’ free wifi access is truly convenient.
Japanese convenience stores truly offer its consumers not just good quality of purchases but also a worthy shopping experience. It redefines “convenience” to a level where consumers will not just find it easy to shop, but also to transact on most day to day necessary services. These stores, despite their size and assortment, would really come in handy for people, Japanese and Foreigners alike.
If you’re looking for perfectly shaped and delicious cantaloupes, strawberries, apples, grapes, and other Japanese fruits, Sembikiya is the best place to look for them. But you might have to check your wallet first because fruits here are not as cheap as you thought.
Sembikiya Fruit Emporium located in Tokyo is Japan’s most expensive fruit parlor. The parlor looks like a luxurious jewelry shop at first glance, until you see fruits displayed instead of diamonds and golds in their glass counters.
Being abundant in fruits, Japan considered it as a customary luxury gift through ages. Contrary to a regular supermarket, fruits sold in Sembikiya are usually bought as gifts.
The fruit parlor started in 1834 as a small discount fruit shop owned by a Samurai called Benzo Ohshima. The business passed on for different generation in their family until it evolved into a more sophisticated and expensive fruit parlor. Despite the high prices of the fruits, Sembikiya Fruit Emporium is a booming business in Japan establishing different branches throughout the country. One of which, is their flagship branch in Nihonbashi Mistui Tower.
Sembikiya Fruit Emporium located in Nihonbashi Mitsui Tower, Tokyo
One common question asked: what makes the fruits so expensive?
One single musk melon costs 16, 200 yen or roughly 142 USD
These apples are considered to be one of the cheapest fruits sold in Sembikiya, ranging from 1,080 yen to 1,620 yen per piece
For one obvious reason, the fruits sold in the place are impeccably tasty. The secret was on how they grow these fruits. The fruits in Sembikiya are cultivated in their specially-designed greenhouses located in Shizouka prefecture, the warmest place in Japan. These greenhouses control the temperature, using heaters during winter and air conditioning on summer season. Their fruits are also protected with a hat to make sure that they won’t be sunburned in heat, assuring its perfect shape, color and taste.
Each tree bears only one fruit to make sure that all the vitamins and nutrients will be received by the single fruit. All other fruits that will not pass their standards will be eliminated and picked out early on.
If someone is looking for something sweet besides fresh fruits, Sembikiya also offers other sweet products like fruit jams that were manufactured in their own factories.
A fruit jam will cost 2,160 yen or roughly 19 USD per jar
Besides the amazing quality of their products, the store clerks also give their buyers an amazing experience. As an example, their store clerk will usually ask the day that the buyer intends to consume the fruit to make sure that the fruit picked would be at its best condition for the chosen date.
Sembikiya Fruit Emporium clearly depicts what the Japanese people had been known most notably for years: excellent quality of goods prepared with dedication and good accommodation for their customers.
In recent years, Filipinos` love for shopping has poured out to the online world as more and more Filipinos are starting to accept e-commerce. Their being one of the most active online users for online research and social media activities paved the way to the sudden hype of online store openings over the past few years. Online stores became the most convenient alternative to shopping.
EuroAsia Research Experts looked into the various factors about e-commerce in the Philippines such as the market trends, payment methods, e-commerce customers, main players, challenges and success stories, in order to learn more about the opportunities in this emerging industry.
The substantial growth of the Philippine economy over recent years has significantly increased the purchasing power of the country’s Upper C-Class, making it the current demographic to watch closely.
The entire retail chain (manufacturers, suppliers, and distributors) has been reactive to this opportunity, upgrading product offerings with more premium items supported by strong commercial campaigning, notably including more and more investments in brand ambassadors.
Aside from enlarging their product ranges, retailers have also looked to improve on merchandising, with customer experience becoming increasingly important for younger generations of consumers.
The timing is crucial for both vendors and retailers, as this is a huge opportunity to gain market share in premium products, and a valuable push in sales and value margins moving forward. Organized retail chains are prime beneficiaries, as this is a chance to edge out their traditional (e.g. Sari-Sari stores) competition that won’t have the same capacity to improve in marketing.
All this, however, comes with obligatory considerations to ensure a profitable foray into the trend of Premiumisation. Here’s some food for thought:
1) When and where is it happening?
It is already evident in stores located in main cities, specifically in areas benefiting from a more premium market. The challenge lies in a balanced execution, something which many retailers are still having difficulty with. More on this below.
2) What is the impact on assortment and merchandising?
Listing new premium items should in no way destabilize the existing assortment structure suited to the market profile.
Some local retailers tend to sacrifice items categorized as basic necessities in order to accommodate a premium upgrade. This is a risky move in the still unpredictable Philippine market where consumers have shown a desire for premium products, and yet maintain a need for basic commodities and low prices. Listing and delisting products should be carefully addressed to take in consideration the number of SKUs and price segmentation expected for a given category.
Adaptation in merchandising is a challenge driven by market profile as well as the size of the store. Merchandising should reflect the proportion that the retailer has decided to allot to low, mid, and premium segments.
Finally, overspacing for premium items may have negative consequences on sales productivity and price image. Underspacing on the other hand may reduce the opportunity for the trend altogether. The trick is finding balance, balance, and more balance. Remember that the spirit of Premiumisation is one of complementing and not replacement.
3) How far are you willing to take it?
Alignment of your marketing initiatives with your vendor’s program is key. When people see products represented by celebrities on TV, they expect to find these at the forefront of the store.
Upon launching a premium product, try to feature it as much as you can in catalogues. Organizing in-store activities will surely reinforce its visibility, so seek out all opportunities your vendor can provide such as sampling, booths with promodizers, etc.
Forecasting sales with the vendor is also a must in order to replenish stocks in a timely manner.
At the end of the day, Premiumisation provides a unique opportunity for retailers and vendors to work hand in hand under the same interest of getting an uptick in sales value and margins. The biggest risk you can take is not taking the risk at all and missing the boat on this trend.
Thai retailer Lotus’s has teamed up with telco True Digital to launch Thailand’s first smart unmanned store, Lotus’s Pick & Go, at the grocer’s North Ratchapruek community centre flagship.
Shoppers may select from more than 400 products, including drinks, snacks, and everyday essentials. To shop at the unmanned store, they must have the TrueMoney Wallet application and a minimum balance of 200 baht.
With the help of True Virgo AI, a smart retail platform, Lotus’s Pick & Go by True Digital aims to transform the store into a fully automated system while also delivering what the companies bill as “a completely new kind of shopping experience for the digital age”.
“Lotus’s is moving forward to develop its business in every aspect to provide superior experiences with the launch of a new branch and renovation of existing branches to better suit customers’ lifestyles in each area,” said Monchai Intarapornudom, senior director of Lotus’s operations development.
“Last year, we opened Lotus’s North Rachapruek, a Smart Community Center prototype as a centre that combines smart living for all generations with Smart Life Solutions, offering products and services that response to the daily demand with community space for various activities in the shopping centre.”
According to local sources, customers can be confident that their data privacy is secured because the unmanned store won’t run by gathering personally identifying information from them, including images of their faces.
Earlier this year, Lotus’s retail store operator, Ek-Chai Distribution System, launched a luxury hypermarket concept brand named ‘Lotus’ Prive’, with the first store opening at mixed-use lifestyle complex ICS.
