Creating Business Models through New Business Areas, E-Commerce and Cross-Border E-Commerce

「We will also lay the groundwork for a business portfolio that will become a pillar of future growth, including by developing original merchandise, expanding the trading business for corporate clients, namely the B2B business, and increasing orders from external customers in the interior construction business.」

「Specifically, we will enter the food manufacturing and retail business centered on Group companies, strengthen and expand the Group’s interior construction business, reinforce our efforts in the corporate personal shopping trading business, and expand our directly operated businesses, based on franchises, into external facilities beyond our own stores.」

「As part of the medium-term management plan’s initiative to maximize the appeal of the Abeno–Tennoji area as “Harukas Town,” we opened “KAFFE OTTE” on the second floor of the Main Store’s Wing building, making the second floor a “scrambled merchandising” floor combining food, general merchandise, apparel and cafés. We will continue developing initiatives that offer customers new value by providing a special place to spend time, not merely a place to shop.」

「As part of the medium-term management plan’s initiative to monetize the strengths of department stores, we worked to strengthen the franchise business. On 12 April, we opened our first full-scale restaurant business operated under a franchise agreement, “Baby Face Sky Terrace Abeno Harukas,” on the 14th floor of Abeno Harukas Dining, one of Japan’s largest restaurant areas, at the Abeno Harukas Kintetsu Main Store.」

「As part of the medium-term management plan’s initiative to maximize the appeal of the Abeno–Tennoji area as “Harukas Town,” we had been renovating sales floors incorporating “scrambled merchandising” since March of the previous year. On 27 April, we opened “美sion Terrace” as the third curated sales-floor concept.」

「Basic Policy 3. Monetizing the Strengths of Department Stores We will monetize the strengths of department stores while also creating new businesses and transforming our business portfolio. Specifically, we will evolve our directly operated businesses, including franchises, strengthen the EC business, transform the personal shopping function into a customer services business, develop the corporate personal shopping function into a trading business, and expand the commercial development business.」

「Following the rollout of the new-business-model concept Scramble MD as Salon de GATE at Abeno Harukas Kintetsu Main Store, we also introduced Humpty Dumpty, Hokkaido Dosanko Plaza Nara and Fleur Fleur on the women's apparel-focused floor at our Nara store, implementing Scramble MD there as well.」

「As part of our efforts to revitalize regional economies, 6 regional department stores collaborated on EC to further promote co-creation with local communities. They opened a joint landing page, “Recommended Specialty Products from Across Japan,” linking to each other’s feature pages for local products, with the aim of expanding sales channels and acquiring new customers.」

「We focused on capturing demand for “stay-at-home consumption” by strengthening our online shop, expanding the range of daily necessities suited to life during the COVID-19 pandemic, holding popular regional product fairs online, and newly introducing a service that delivers items ordered through a smartphone app on the same day.」

「After the state of emergency was lifted and operations resumed in mid-May with the strongest possible infection-control measures, demand for daily necessities, including food, remained firm at suburban stores, while the cross-border and domestic e-commerce businesses supported the decline in in-store sales. Although the company worked to compress miscellaneous expenses, including advertising expenses,」

「The cross-border EC business and domestic EC business will support the decline in in-store sales.」

「In addition, to develop new business models, we made every effort to strengthen earnings in areas outside the department store business, including by discovering and nurturing regional products through the regional trading company business and expanding sales channels in the cross-border EC business for China.」

「As part of our new business initiatives, the regional trading company business combines the strengths of local companies to develop new regional products and establish sales channels outside the Group. In the cross-border EC business, we also worked to expand sales channels in China, making every effort to increase earnings in areas outside the department store business.」

「We also worked energetically to expand sales channels in the regional trading company and cross-border e-commerce businesses, with the aim of expanding revenue outside the department-store business.」

「We also worked to expand the EC business by opening our own online store on a cross-border EC site for China, in order to capture repeat demand from Chinese visitors after their return home and expand our sales channels in China.」

「At the Yokkaichi store, we expanded services beyond merchandise sales as a department store focused on co-creation with the local community. Aiming to create a place where local people can gather for a variety of purposes, we carried out the first large-scale renovation in 11 years, introducing the Tokai region’s largest MUJI store, Mie Prefecture’s first Café&Meal MUJI, and the SYNTH Business Center service office to strengthen community functions, while working to create and monetize new business models.」

「We also worked to create and monetize new business models, including by opening our own online store on a Chinese cross-border EC site.」

「Based on the “Medium-Term Management Plan (FY2018–FY2020)” formulated in April of this year, we made every effort across our businesses to improve profitability, including by advancing various initiatives to build a new department store business model, establish a business model for future growth and maximize the appeal of the Abeno–Tennoji area.」

「Growth is limited by a strategy focused solely on the department store business. To change our department-store-centered profit structure, we will pursue new business models by entering new business fields, strengthening our existing EC business and expanding into cross-border EC.」