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A short summary of Seven Eleven Japan and its road to success
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Seven-Eleven Japan: Venturing into e-Tailing
Dixon Tioh Minh Phuong
Syafiqah Bestia Tan Xavier Woo Zhen Zhen
About Seven-Eleven
• Largest convenience store chain in Japan v 8,000 stores, growing 400-500 each
year v Store space around 1,200 square feet v Carrying about 3,000 types of products
About Seven-Eleven • Pioneer in providing popular ready-made
meals
v sushi/ spaghetti/ bento set
• No.1 outlet for fast-food, batteries and
ladies stockings
• No.2 outlets for magazines and paper
bags
The major strategies of Seven-Eleven Japan Co. Ltd Adapting to
Change
Information and Distribution
Systems
E-Commerce Ventures
Adapting to Changes
• Slogans: “ADAPTING TO CHANGES” v Try to meet customer’s needs and satisfaction
v Attracted more patrons to their stores
• Results:
v Economic downturn in 2000, Seven Eleven still survive with
highest profit.
Information and Distribution Systems • First Information System in 1978.
• Point-of-Sale introduced in 1982 v Sold-out merchandise tracking data v Merchandise information package v Business and event calendar
• Results:
v Extremely responsive to customer’s change in taste
Information and Distribution Systems • In 1999,they created a Fifth-General Total Information
System
v Link all retail stores to headquarters (HQ)
v Store computers and at HQ system can analyze POS data
simultaneously
• Results:
v Able to view sales trend -> decide on replenishment, drop of keep
product and new items.
Information and Distribution Systems • Seven-eleven need frequent deliveries to their store • Joint delivery program
v Product requires same temperature zone would be grouped at a SINGLE SUPPLIER DISTRIBUTION CENTRE
v Delivered in truckloads to group of seven-eleven stores in different
regions
• Results: v daily supplies supposed to take 70 trucks reduce -> 10 trucks
E-commerce Ventures • Active investment in e-commerce joint ventures
v E-Shopping! Books Corp, on-line bookshop joint venture between Softbank Corp. and Tohan Corp.
• Using its chain of stores as a Distribution Centre. v Stores as payment and delivery stations for 8 major on-line shop
operators.
Japan’s E-Commerce Situation • Japan ranked 21st position
v Lowest among the Group of Seven (G7) industrialised countries v Source: The EIU ebusiness forum, "Introducing the EIU's e-
business-readiness rankings", 4 May 2000.
• High internet usage, but slow growth of B2C
v Why so?
Factors affecting E-commerce • High connection charges
v Charged by the minute v Japan had the world's highest combined telecommunication and
ISP fees
• Local culture v Phobia of submitting credit card information over the Internet v Mailing errors & non-fulfilment orders v Offline shopping & konbinis
• Government intervention v Current system was maintained at the expense of consumers
Formation of 7dream.com • Venture fully into e-commerce • Introduce a unique e-commerce model • Initiate a joint venture with several major Japanese companies • Sony Corp. • Sony Marketing (japan) Inc • NEC Corp • Nomura Research Institute • Mitsui & Co. • Japan Travel Bureau Ltd. • Kinotrope Inc.
• 7dream.com is formed
Business • Offers services in 8 categories:
• Travel • Music • Photograph • Merchandise, gifts, mobile phones • Ticket sales • Books • Car-related services • Information services
• Utilize existing Seven-Eleven Japan delivery system
The Target Market
• From teens to adults in their thirties
• Why? • Frequent customers of konbinis
• Dictated the shopping trends in the country
• Current adopter of the Internet
• Welcome the idea of on-line shopping site
Solutions to challenges
• Introduction of Multimedia Kiosks (MMK)
• Full access to all 7dream.com services
• Download games, music
• Print digital photos
• Apply for mobile phone lines
• Make hotel reservations
Solutions to challenges
• Challenges to access 7dream.com
• Lower penetration rate of personal computer
• Expensive wired dialup
• Unable to accommodate a personal computer at home
Solutions to challenges
Challenge
• Consumers reluctant to reveal credit card information
Solution
• Option to pay for purchases at a 7-Eleven store
• Payment system
• Delivery system
Challenge
• End-fulfillment problems
Solution
• Option to pick up purchases at a specified store
Payment and delivery scenario
Customer goes online via Internet-
enable device
Makes purchase and specifies pick up at the 7-Eleven store
nearby
Order is processed and shipped by Order
Centre via Distribution Centre to
the specified store
Order Centre notifies customer pick up
date
Customer brings payment slip to the
nearby store
Customer picks up purchased items after
payment
Challenges Faced
• Store space limitation • Manpower • Service level
• Different products sold on 7dream.com
• Customers buy items from store while picking up their orders
“In the short term, they’ll be major players because of their networks, but the Japanese will begin using electronic cash and home delivery, like Americans” - Hirokazu Ishii, analyst
Today’s Context
Source: Euromonitor International, January 2010
Today’s Context
Source: Euromonitor International, January 2010
Coping with new challenges
• Adapting to Changes • Creating new services
Coping with new challenges
• Adapting to Changes • Creating new services
• Platform Changes • M-commerce • Social Media
Thank You • Q&A