The Japanese B2C Retail Industry in the Digital Age

Abstract

This chapter shows (a) how digitalisation has impacted the way Japanese consumers behave in the B2C retail industry and (b) how successful players adapted to the new purchasing habits, technology improvements and service challenges. It will be of interest to business practitioners and academics as well in Japan as overseas.

The development of E-commerce and M-commerce in the world’s second largest retail market has been a challenge for traditional businesses and a game-changing factor. Nowadays, Japan has shrugged off its initial reluctance. Business conditions have diversified; traditional retailers have transformed. Non-store retailers have flourished together with the spread of the Internet and mobile phones, as shown by market data. Several payment options have also become available. Online shopping has been central to both the economising and the nesting trends. In short, the traditional “Japanese consumer mindset” has been impacted.

This chapter discusses the impact of digitalisation on Japanese consumer behaviours. The shift in attitudes of consumers stems from structural factors such as the digital revolution, the emergence of a less materialistic younger generation, the economic downturn and the “post March 11 consumer” effect. Among the consumer changes, let us highlight (i) spending more time surfing the Internet, (ii) buying differently and comparing prices anonymously and (iii) another perception of ownership.

The chapter also identifies how retailers adapted. At the beginning, key players have been reluctant to invest online and to reinvent themselves (limited use of up-to-date technology), as online stores and physical stores are run differently. Illustrating with concrete examples, a focus will be done on online food, apparel and second-hand retail as well as luxury goods.

Finally, the paper issues recommendations for building a successful online retail business, as B2C digital marketing and reinforced online presence (in Japanese) have become key. Successful brands increasingly rely on social media promotion and word-of-mouth marketing.