“Head-to-head: convenience stores versus e-commerce” was the title of the cover story in Nikkei Trendy’s February issue. Activities by six major online brands—Amazon Japan, Rakuten 24, Lohaco, Yodobashi Camera, Omni7 and Lawson Fresh—were introduced, with examples of how convenience stores are partnering with suppliers and manufacturers to revolutionise retailing and distribution in ways that were unimaginable a few years ago.
Most impressive is the faster delivery times that firms offer. Amazon Pantry, set up by Amazon Japan in September 2015, can deliver items from an inventory of 18,000 within one hour of receiving an order. Orders are accepted only from smartphones.
Last November, the firm launched a second service, Amazon Prime Now, to compete with convenience stores. Its one-hour delivery pledge, however, is 40 minutes longer than the time it takes to receive items from Rakuten Ichiba. On a good day with traffic permitting, the latter can deliver Rakubin items within 20 minutes of receiving an order. The new Rakubin service, also intended to challenge convenience store retailing, commenced in August 2015.
Lohaco, which sells goods through a tie-up between Askul Corporation and Yahoo! Japan, emphasises its proprietary goods. As a result, it is being marketed as both a private and national brand, offering items ranging from pre-packaged drip coffee to 5kg sacks of own-brand rice.
The aim of Lawson—the second-largest convenience store chain nationwide in terms of number of outlets—is to bring its place of business to “the customer’s front door”. Thus, in June 2015, it began a delivery service designed to allow customers to purchase items sold at Lawson shops without leaving their home.
Made possible through a contract with the Sagawa parcel delivery service, deliveries—free for orders of ¥700 and over—currently are restricted to within a 500m radius of the retailer.
In Tokyo’s Setagaya Ward, the firm has been operating a pilot service, which it expects to expand to at least 100 outlets by the end of calendar 2016.
Retail sales of food and drink, however, are just the tip of the iceberg. In a tie-up with Lifenet Insurance Company, Lawson is offering support on the road to older people who drive. Also available are a variety of home services, such as emergency plumbing repairs, door lock replacement and pest fumigation.
Nikkei Trendy compared prices at seven of the firms. For a 24-bottle case of I Lohas mineral water, for instance, Amazon’s prices were the lowest: ¥1,750 compared with ¥3,110 charged by Rakuten 24. Of 13 items on its list, Amazon was cheapest for six, and second-cheapest for three items. As Yodobashi typically provides rebates of 10% of the sales price, which can be used for future purchases, loyal customers stand to benefit over the long run. Customer relationship marketing techniques continue to diversify.