No. 8: Increasing presence of the senior generation in the consumer market (September 30, 2012)

Market trend:

Middle-aged and older consumers have been increasing the presence. It is reported that the ratio of shoppers older than 50 years of age increased 3% to 31% in 2011 at Seven-Eleven convenience stores. An increasing number of seniors do shop in a convenience store instead of a supermarket. Seven-Eleven is offering snacks and delis in a smaller package for the sake of senior shoppers. The increase is very notable in the membership of fitness clubs. In a fitness club in Tokyo, members older than 50 accounted for 51.1% of all members, surpassing the 50% mark for the first time.

It is important to take note that the senior generation places more important on quality than price. This can be explained by the growing popularity of premium beers and hybrid vehicles. Traditionally, makers of consumer products have focused on “family” and “youth,” but the situation is changing rather fast because of low birthrate and longevity. An economic research laboratory reckons that total household financial asset is estimated at 1,500 trillion, of which 60% is owned by people older than 60 years of age. Spending by these people was 101 trillion yen in 2011, accounting 44% of personal spending, and it is expected to reach 50% in the near future. Sooner or later, Asian countries will become an aging society. Stay alert. The world is changing very fast.

Seven-eleven stores were indispensable for 

people in the areas damaged by the March 11 disaster. 

No. 7: Dynamic change in the beer market? (September 21, 2012)

Market trend:

 

Seven and i Holdings developed its private brand premium beer “Grand Kirin” joint with Kirin and introduced it in June this year. Grand Kirin is selling well, and the company revised the sales target in 2012 from 3 million bottles to 4.8 million bottles.

Likewise, the company developed “The Extra” jointly with Asahi Breweries. The new private brand beer will be sold at Seven and i’s 14,800 outlets nationwide. The Extra contains 80% more malt than Asahi’s Super Dry and its alcohol percentage is as high as 6.5. Alcohol free beers have grown popular among Japanese consumers. Is it the time to offer strong beer to consumers tired of alcohol free beers?     

  

No. 6: The senior market is growing rapidly with the progress of the aging society (February 22, 2012)

Consumer behavior

With the progress of aging of population, the annual consumption expenditure of the senior generation (older than 60) increased 2.4% over the preceding year to exceed 100 trillion yen in 2011 for the first time in history in Japan. It accounted for as much as 44% of total consumer spending in 2011, reflecting tireless consumer spirits of the senior generation. Travel agencies responded quickly to this trend. Kinki NihonTourist launched a travel pack exclusively for couples of the senior generation, and H.I.S. started a service to set people above 65 free from cancel charge on a certain conditions.

Fitness centers added another service to the regular menu. Central Sports that has a network of 160 fitness centers across the country set up a day service facility to provide seniors in need of mild nursing care with training using Tablet PCs to prevent mental deterioration. Although members in their 20s and 30s decrease visiting frequency, members above 50s stay almost the same in visiting frequency. KidZania that offers services to let children have the same experiences as adults introduce a new fee structure. Visitors above 60 can ride as many attractions as they want for 5,200 yen per day, 500 yen lower than for adults, to allow them to enjoy attractions with their grandchildren. It has become rather critical for companies concerned to analyze the consumption behavior of the senior generation.

No. 5: A new marketing approach of a shoes company to collect customers (February 21, 2012)

Market trend

ASICS, one of Japan’ leading athletic shoes makers, will launch a new service within the year. The new service is to provide each user with information on his best shoes. A user sends his marathon training plan on the company web page My Asics, and the company collects detailed information on his training. Based on the analysis of his ability and level, the company sends information on his best shoes by e-mail. The service is free of charge. The company plans to expand the service worldwide and increase the users to 1 million in three years.

The user sends such information as gender, age, training frequency, as best marathon time via the web page. The company analyzes the characteristics of each user and sorts out the best shoes for him. ASICS has more than 100 kinds of running shoes on its lineup and wishes to promote its products by suggesting the best shoes for each user. The accumulated information and data will be utilized for the development of new products.  

No. 4: Five leading convenience store chains combined open more than 3,400 new stores next year (December 29, 2011)

The five leading convenience store chains, Seven-Eleven, Lawson, Family-Mart, Circle K, and Mini Stop combined will increase the number of new stores more than 20% over the previous year to more than 3,400 in 2012, achieving the record high net increase of mover than 1,800 stores. Shortage of goods in supermarkets caused by the earthquake on March 11 increased the number of female shoppers of convenience stores. The elderly that hesitates to shop around is also expected to shop at a convenience store more often than before.

Each of the five chains is trying to increase the presence in the market by introducing mobile stores in the disaster-stricken and sparsely-populated areas besides the three major metropolitan areas of Tokyo, Osaka, and Nagoya, by starting the delivery service of packed lunches, and by expanding the lineups of chilled products, prepared foods, and vegetables. According to the statistics released by the Ministry of Economy, Trade and Industry, the number of retailers decreased about 580,000 stores from 1982 to 2007 mainly because of the closures by aging shop owners. Convenience stores will have more business opportunities as they segmentalize the market. As Dr. Peter Drucker said, “Business is to create and keep a customer.”  

No. 3: Convenience stores are growing and spreading domestically and globally (December 26, 2011)

Sales of convenience stores were 8,500 billion yen in 2010, achieving a 10% growth in the past five years. The number of domestic stores reached 46,000 stores. Still, the convenience stores seem to have a bright future. Currently, 70% of shoppers are males, while 30% of them are females. That is, new markets can be created as the number of women workers increases. Working women try to buy all the necessities in one store convenient to them instead of shopping around for cheaper goods to save time. The combined market of retailing and restaurant is estimated at about 160,000 billion yen. Convenience stores have merely a 5% share because they currently have sales of 8,000 billion yen. It is possible to increase the ratio to 10%, the president of a nationwide convenience store chain said.

A convenience store offers lots of opportunities of innovation because there is no clear definition on how a convenience store should be. In fact, his chain successfully increased the sales of vegetables, though vegetables were supposed to be unsalable in convenience stores. In addition, it is possible to increase the number of stores by 1.5 times to 15,000 stores in 10 years inside Japan only. The original concept of a convenience store was invented in the U.S., but the current concept of a convenience store developed in Japan can be exportable. Actually, Japanese convenience store chains are growing business and spreading store chains in Asian countries including China.  

No. 2: Import small cars are selling well (December 24, 2011)

The trend to change a domestic car to an import car seems to be spreading steadily. New registrations of import passenger car increased 36.7% in November this year over the same period of the previous year, scoring an increase three months in a row. This is partly because consumers are somewhat weary of austerity life, but the strenuous efforts of import car dealers to market import small cars to the young generation with an emphasis on yen’s appreciation are working very well. A man in his twenties claims that an import car with excellent and fancy design interests him in view of the small difference is price between a domestic car and an import car.

Yanase, Japan’s leading import car dealer, analyzes that consumers who decided against buying a replacement after the Lehman Shock have started shopping around. In fact, the company sold four times more Mercedes-Benz open car SLKs, each of which is priced between 5,500,000 and 7,500,000 yen, this year over the previous year. It feels the growing popularity of cars with tasteful design that cannot be sold easily in tight economic times. In a sense, it can be said that domestic cars place too much emphasis on economic potential. As always, rich people exist however depressed and stagnant national economy becomes.