The forum was hosted by Lumine, a Japanese retailer that mainly manages malls in train stations. A panel of three executives who run some of the country’s most influential retail companies — Lumine’s chairman Yoshiaki Arai; Hiroyuki Kondo, president and chief executive officer of Mash Holdings, and Susumu Sasaki, president and ceo of Jun Co. — discussed the challenges ahead and the strategies to cope with them with WWD executive editor of beauty Jenny B. Fine.
WWD: What are the challenges facing Japanese retailers and brands today, and why do you think that the Japanese retail and fashion industries have stalled?
Yoshiaki Arai: I think things will get moving again eventually, but I think one thing that has slowed the pace is that there is no real management philosophy. That’s something that is lacking. And the market changes so rapidly that without a clear philosophy, we are not able to keep up. So we need to change our management structure itself. In addition to this, value creation for the consumers based on cultural information is very important. So a challenge that we have to face is that we must create greater value for our customers. In order to do this, we need to invest in talent, in people. Without strong talent, we won’t be able to provide strong value and services to consumers.
WWD: Are you optimistic about the future?
Y.A.: I’m not un-optimistic. While there are challenges that face us, I’m not pessimistic. We need to take this opportunity to create better conditions in the future. Society is changing — for example, more people are living to 100 years old — so we must find a way to respond to these changes effectively, and our response must be quality driven. We need to change our mind-set by creating quality and value that respond to customers’ needs. It’s not about quantity; it’s quality. But unfortunately we still haven’t been able to completely deliver this value, which is why I think there is a chance to grow in the future.”
WWD: Mr. Sasaki, Jun Co. has been a leader in taking a lifestyle approach, combining fashion, food and fitness, and changing the mind-set, as Mr. Arai has mentioned. Can you tell me about some of the different concepts you have launched?
Susumu Sasaki: This year marks 60 years since the founding of our company, so it’s quite an old company. But since last year we changed our vision to meet the changing awareness of today’s consumers and the consumers of the future. We call it Vision FFF: Fashion, Food, Fitness. We did this in order to become a company that can provide customers with the things they need for their changing lifestyles. Why are we doing this? If clothing is the only thing we do, we are closing ourselves off to a big market by not being able to meet many people’s needs. Customers actually don’t only want things, they also want experiences. They want to learn about new things, and to discover new things about themselves. We believe that’s the key to adding value. So if we think in that way, it’s difficult to make new discoveries from fashion trends based on collections. It’s not impossible, but the power of simply having a variety of choices has diminished. So the food industry, as a world that is still relatively unknown to us, has many opportunities for discovery, and for providing customers with new discoveries. Not only new food products but, for example, ways of eating, and combinations of eating different things together. There are many new things we can discover. And another thing we do is fitness. People’s awareness has started moving more inwards to their own bodies. They want to be more beautiful and in better shape, so we started thinking, what kind of services can we provide to respond to these needs? So in one sense, fashion means providing things to people that they are interested in, which is our way of thinking. And that is how we came up with the FFF: Fashion, Food, Fitness concept.
WWD: Mr. Kondo, Mash has been very experimental in creating unique merchandise and really looking to outside markets for inspiration as well. For example, Ecostore of New Zealand and Three Twins Ice Cream in San Francisco. What are the keys to providing truly unique and distinctive merchandise that the market desires?
Hiroyuki Kondo: I don’t know if this is really the key to finding [unique products], but I think the most important thing is making them a success once you’ve found them. And in order to make them a success, everyone who is involved, from the p.r. and marketing staff to the director, has to feel passionately about them. So when we find interesting new products we have to ask ourselves if they fit in with our company’s standards and specialities. Ecostore is a wonderful brand from New Zealand that makes things such as detergents and home care products that really don’t do damage to nature, and we are a company with a lot of people who love organic and wellness products, so it was a brand that really fit with us and with which we could see ourselves having a long business relationship. Three Twins Ice Cream is the number-one most popular organic ice cream brand in the United States, and we wanted to bring a brand of ice cream to Japan that is safe and healthy for children no matter how much of it they eat. We have to ask ourselves, are these brands that will maintain their pure intentions or ambitions for a long time? Those are the kinds of products we are looking for. I think that’s the key.
WWD: You also recently opened a pop-up store in New York called Gelato Pique. Why did you decide to do that, and what have been some of the key learnings?
H.K.: We decided we wanted to open in New York in order to bring a place that seems so far away a little closer, in preparation to one day hopefully having a presence not only in New York but also perhaps in other places such as Vancouver and Toronto. What we learned is that even if it’s a brand that is extremely popular and selling well not only in Japan but also in China, Hong Kong and Taiwan, if you bring it to North America, nobody knows it. We really understood that. And since nobody knows it, even if the products are good, they are not easy to sell. So we had to really spend time on doing p.r. and to do it in a way that communicates the belief we have in our brands.
WWD: Let’s turn our attention to talent. How do you stimulate creativity and innovation in your organization?
H.K.: I think the question of innovation in relation to personnel is a very difficult one, but in our company we have the idea that we want to be the smallest company in the world. Even though we have about 4,000 staff, we recognize that the bigger conversations get, the more slowly they move, and then things stop progressing. For example, China is a very large country but with a very compact government, so things can be decided quite quickly. In Japan, even though the population is not that large the government has gotten bigger and now in order to change a law it can take 10 or 20 years. So even as our company grows, we would like its government or management to remain compact. I think that’s the most important innovation for us.
WWD: Mr. Sasaki, at Jun how do you nurture creative talent?
S.S.: In the case of our company, it is very important to us to be nurturing talent who have energy and passion and creativity. I don’t think we have completely achieved that yet, but as a trial we started using a “T” way of thinking about knowledge. If you imagine the letter “T” your own talents and knowledge are the vertical line, and the horizontal line is other fields of knowledge. If you only nurture your own knowledge and truth it’s difficult to create value. Instead you need to use the truth of various fields of knowledge in order to update your own specialty. This is what we are trying to do within our company.