Japanese department stores promote hybrid shopping amid pandemic

Japanese department store operators are promoting fusions of their physical operations with the internet to make up for falls in the number of customers visiting their brick-and-mortar outlets amid the coronavirus pandemic.

Such combinations are not limited to e-commerce, but include a variety of inventive features to attract new customers, including younger ones.

Matsuya Ginza in Tokyo’s Chuo Ward opened a virtual shop on its official website in November last year to showcase furniture and sundry goods chosen by well-known architects, such as Kengo Kuma, and designers. With great attention to every detail, the shop, Design Collection, makes visitors feel as if they are actually walking in the physical store.

“The virtual shop is designed to give visitors a sense of exaltation about selecting merchandise to buy,” an official said.

Matsuya Ginza, owned by Matsuya Co., hopes that the new service will also encourage consumers to visit its physical store.

Isetan Mitsukoshi Holdings Ltd. has made Isetan Shinjuku in Shinjuku Ward, Japan’s biggest department store in terms of sales, accessible virtually via a smartphone app. Visitors can go shopping using their avatars and converse with each other. Another app allows them to talk with sales assistants at the actual store via a video chat system.

Seibu Shibuya in Shibuya Ward, which belongs to Sogo and Seibu Co., opened an unstaffed in-store section, Choosebase Shibuya, where shoppers can directly check cosmetics and miscellaneous goods from some 50 new brands and get product information including prices when they access a designated site by holding their smartphones over a QR code.

The “Asumise” section, opened at Daimaru Tokyo in Chiyoda Ward to display emerging brands of merchandise, is staffed with experienced sales staff, who provide detailed product and other information to visitors, but only accepts purchase orders online. The system helps visitors select products “without feeling pressured to buy,” said an official at the department store, owned by Daimaru Matsuzakaya Department Stores Co.

Japan’s department store market has been shrinking steadily due to the growth of clothing retailer Uniqlo and other specialty shops as well as e-commerce companies such as Amazon.com Inc. With the tough business environment compounded by the COVID-19 pandemic, department store sales in 2020 plunged 27% from the previous year to ¥4,220.4 billion, less than half of the peak in 1991. Sales rebounded to ¥4,418.2 billion in 2021 but were still more than 20% lower than the pre-pandemic level in 2019.

Department store operators have failed to cast off their past successes and lagged behind competitors in riding the digitalization wave, analysts said over their situation.

“Delayed responses to address a range of problems are coming to the surface,” an expert panel set up by the Ministry of Economy, Trade and Industry to discuss how to revitalize department stores, said in a report released in July last year.

“Now is the time for them to promote reforms with a sense of speed,” the panel said.