Japan’s ecommerce environment is the perfect example for Kiwi retailers in the process of adapting to online, says University of Waikato digital marketing expert Dr Roy Larke. He’s also calling for the ubiquitous corner dairy to be transformed into distribution centres for online orders.
"In the past two years, Japan has emerged as an international leader in e-commerce, on an equal footing with the United States," says Dr Larke.
"Japan boasts one of the fastest growing and most ‘frictionless’ online retail markets in the world, with around 10 percent of all retail transactions now online. With consumers eager and willing to shop online, even retailers in a much smaller market like New Zealand should be looking to embrace this digital future.”
As in New Zealand, many Japanese retailers have been reluctant to accept that an ecommerce offering is essential to their survival, but Dr Larke says several of the top retail chains in Japan initiated moves away from bricks and mortar and towards towards a more integrated model in 2015.
Even very small retailers need to understand that an online presence is essential, says Dr Larke.
“The simple fact of being available on Google Maps… it’s gone from being convenient and advisable to being pretty much essential.”
Ecommerce retailers can face a logistical issue getting their goods into the customer’s hands. Japan has addressed this by transferring some of the responsibility for receiving the goods onto customers by repurposing its 56,000-strong network of 7-Eleven convenience stores as distribution centres for online orders. Instead of having goods delivered to their homes, customers can pick up their deliveries from the store on their way home instead.
Dr Larke acknowledges that uptake of this system in Japan is currently low, and any major increase is likely to introduce peripheral issues such as security. He believes the next step for the Japanese scheme is likely to be service charges for those who exceed a generous window for pick-up.
He feels the scheme would be suitable for New Zealand as well, if supermarkets and dairies were both included.
Lockers in public spaces also help address Japan’s “last mile problem” with ecommerce deliveries. Supermarkets, subways and other “places where people will naturally go in their daily routine” now host lockers where delivery items can be sent to.
Mobile is a big part of Japan’s story, too. Of all Japanese online purchases made in 2016, 53 percent were made using a mobile phone.
"The main reason is that Japanese retailers are set up with the right technology to receive customers' mobile orders in the first place. No doubt it's also been boosted by government backing for an ultra-fast wifi network in every major city."
New Zealand businesses need to ensure customers can easily find and buy from them through their mobile phones, and the experience should work seamlessly, Dr Larke says.
“If your competitor is 'mobile responsive’ and you’re not, that’s a big problem best avoided."