I have recently spent a few days in North America and as I wander around the numerous retail centres, what stands out for me is that Japanese retailers are leading the way in retail service. There are clear pointers that American and European retailers could take on board to avoid slipping back in the Global Retail market.
This service offer is pivotal in today’s increasingly virtual world. In the UK we are seeing that the real winners are those retailers that provide a seamless multichannel retail offer, combining the best of both the physical and the virtual worlds. The Japanese stores I have seen here clearly recognise the importance of the human factor, from faceless checkout to a spirit of warmth, hospitality and gratitude. Put simply, if you make the decision to shop in physical stores then you deserve this as an absolute minimum.
For me, Uniqlo is getting it right when it comes to service. For example in their flagship Fifth Avenue store in New York, the time shoppers wait at their tills is strictly monitored, whilst shop assistants hand back credit cards Japanese style, using both hands and making full eye contact. They also offer basics in more tailored fits than its rivals and many more permutations (polo shirts come in 80 colours). Unsurprisingly Uniqlo outsold Gap last year and is closing in on H&M and Zara.
Also expanding in the US is Muji, one of Japan’s leading household and consumer goods retailers. It aims to increase its nine retail stores in the US to around 75 by 2016. Furthermore, two Japanese convenience store giants have also announced real estate expansion plans in the US. There is Famima, an upmarket foodstore, owned by Tokyo’s Family Mart that already have operations in California and also Lawson, which has opened in Hawaii.
In addition, much of the US press is reporting that many American urbanites will be attracted from IKEA by the quaint Aki-Home. Aki-Home has just opened two stores on the West Coast as a springboard to nationwide expansion over the next few years.
As the Japanese retailers continue to wow consumers in the major retail destinations, American retailers are starting to take notice, for example some fashion operators are beginning to experiment with ‘quiet zones’ whilst a few convenience stores are considering the notion of intentionally employing friendly shop assistants!
Damian Sumner is a Regional Director at JLL and Head of the UK Retail Agency Team. He advises national and international retailers and retail banks on their real estate portfolio strategy across the UK.