Seven & i Omnichannel Play

Could plan to turn 7-Elevens in Japan into online pickup points double back to U.S.?

Published in CSP Daily News

Toshifumi Suzuki

TOKYO -- Seven & i Holdings Co. Ltd. CEO Toshifumi Suzuki--the 81-year-old executive who built 7-Eleven into the world's biggest convenience store chain--has a new mission: turning more than 50,000 brick-and-mortar stores in Japan into portals to a new online retail empire, reported Reuters. And Suzuki is again seeking inspiration in the United States, raising the question of whether he would, in turn, bring any such successful initiative to the U.S. market.

Seven & i is a group companies with a wide variety of business operations, including convenience stores, general merchandise stores, department stores, supermarkets, food services, financial services and IT services. It was Suzuki who brought 7-Eleven stores across the Pacific, eventually buying the U.S. company.

In Suzuki's vision, goods ordered online from Seven & i's department stores and supermarkets, as well as outside partners, would be delivered to and picked up from the thousands of 7-Eleven c-stores spread across Japan at a customer's convenience, the news agency said. Most are open 24 hours a day.

"I've been talking for a while inside the company about integrating the real [bricks and mortar] side with the Internet, but nobody was taking it seriously," Suzuki told Reuters. In September, the Japanese retail guru decided to change all of that.

He dispatched about 50 heads of the group's companies--his top lieutenants--on a mission to the United States. He instructed them to visit retailers like Macy's, shopping malls and Internet companies, examples of what he called "omnichannel" integration that are beginning to yield results--with orders to figure out how to apply it in Japan.

"In the U.S., they observed, they listened and they realized that this was possible, and now they're all motivated," Suzuki said.

Suzuki said the company is already in discussions on point-of-pickup arrangements for Japan with online retailers, including major players.

"We've had lots of approaches from people wanting to be partners," Suzuki said, although Amazon.com is not among them.

At the moment, 7-Eleven's stores in Japan do not offer the range of e-commerce services available at their U.S. counterparts. On the other side of the Pacific, for example, 7-Eleven maintains dedicated lockers for picking up merchandise ordered online from Amazon at some stores.

Amazon does have point-of-pickup arrangements with 7-Eleven's chief Japan rivals, FamilyMart and Lawson--but 7-Eleven only offers such services for limited online product offerings, such as upscale cosmetics, purchased from other Seven & i retailers.

With no plans to step down any time soon, Suzuki has a reputation for a willingness to innovate and make big plays. In 1991, his company acquired a majority stake in its U.S. mentor and original 7-Eleven owner Southland Corp.

The Japanese company then turned its U.S. unit around, transferring sophisticated data systems developed in the United States but refined in Japan, to manage inventories and optimize merchandise strategy at individual stores.

The company also pioneered many of the services and products--freshly prepared "bento" box meals, 24-hour banking and bill payments, a premium private label brand--that made Japan's convenience stores and especially 7-Eleven among the most profitable in the world.

To bolster its offerings in other retail segments, this month it acquired a 49.9% stake in the operator of 10 Barneys New York high-end apparel stores in Japan, said the report.

Seven & i has approximately 50,250 c-stores worldwide. 7-Eleven, Dallas, operates, franchises or licenses approximately 10,200 7-Eleven stores in North America. Globally, there are nearly 52,000 7-Eleven stores in 16 countries. During 2012, 7-Eleven stores generated total worldwide sales close to $84.8 billion.