Toshiyuki Ueyama, Director of Chiba University of Commerce Research Center for Economics

The Rakuten Cafe, which Rakuten, Inc. opened on Shibuya Koen-dori Street, can be seen as an antenna shop for Rakuten Ichiba. Although future developments have not been clearly announced and a sense of uncertainty remains, it is certainly something to watch.

A major issue facing the retail industry is how to respond to the decline in demand that will result from the decline in the domestic population in the future. Various studies have been conducted to answer the question of how to capture a piece of a market that is likely to shrink rather than expand in the future, and several proposals have been implemented. On the other hand, it is also true that with the advancement of ICT, including the spread of smartphones, the number of channels for accessing customers has increased and the combinations of these channels have become more diverse.

Recently, the term "omnichannel" or "omnichannel commerce" has come into use. It is said that the major US department store Macy's first coined the term. It is also mentioned in the 2012 Information and Communications White Paper. Omnichannel is an attempt to strengthen sales power by effectively combining all possible sales channels as customer touchpoints, and this trend is accelerating. In other words, companies are making more efforts than ever before to invest people and money in order to streamline diversifying sales channels.

The term O2O (Online To Offline) is used in a similar sense, and is more familiar in Japan than omnichannel, but strictly speaking the scope of its meaning is different. This term is also used in the 2012 Information and Communications White Paper. Originally, O2O involved introducing products and services via email or the web, or distributing discount or preferential tickets, to induce customers to physical stores (offline stores), but now it involves using both physical and online stores, integrating them to induce customers to both.

For example, customers can be guided from an online store to a physical store, such as by inspecting a product at an online store, then actually picking up the product at the physical store to check the color and feel before purchasing, or conversely, by guiding customers from an offline store to a company's online store, in cases where they look at a product at a physical store, but it is inconvenient to take it home, so they purchase it at the online store after they get home.Until now, it has been possible to view and purchase any product (with limitations, of course) anytime, anywhere, and it is certain that sales at online stores have increased because purchases can be tailored to consumer behavior, which is why O2O is the focus of attention.

However, O2O is not without its problems. For example, customers may flee from a company's online store to another company's brick-and-mortar store. Or, customers may flee from a company's brick-and-mortar store to another company's online store. In addition, online and brick-and-mortar stores of the same corporate group face the problem of how to share the profits and costs.

It is also possible to look at O2O from the perspective of innovation. Although it is admitted that distributing tickets via e-mail newsletters and obtaining discounted tickets online have been progress in the sense that they have shortened the "distance" between consumers, they are not innovation, or at least disruptive innovation. Sending discounted tickets by mail has been a common practice, and is still done today. The fact that it can be done over the Internet is significant, but it is merely a replacement for previous methods. Innovation will require not only replacing traditional services with online ones, but also new services that have never existed before.

In terms of customer approaches, direct mail has been replaced with e-mail newsletters to reduce costs, but this approach is not innovation, even if it is effective in terms of cost. This is because it is an extension of direct mail. Even if customers are stratified (segmented) and the content of e-mail newsletters is tailored to each customer segment, it is still only halfway there. In the case of omnichannel, it is necessary to improve the accuracy by enabling one-to-one marketing. Amazon is actually doing this with its recommendation function on the web and "recommended products" in e-mails, but there is room for improvement in terms of accuracy. Services such as using the GPS function of smartphones and mobile phones to automatically send messages to nearby customers inviting them to visit a store are something that has not been possible until now, and can be said to be new.

In the future, it will be necessary to consider omnichannel including O2O, rather than narrowing the scope of consideration only to O2O. In order to succeed in omnichannel commerce, it is necessary to draw out the relationship with the expected customer, and to prepare the foundation such as company-wide unified inventory management and SCM that meets customer requests for that relationship, but it is first necessary to build a CRM that is linked to tools such as point cards, smartphones, and social media. And instead of appealing separately through media such as product data on the company's website, product introduction data on the company's blog, e-mail magazines, Facebook, Twitter, LINE@, etc., it is necessary to consider an appropriate mix of them and to take measures, systems, and structures that can demonstrate relationships in a certain context. If there is financial leeway, it goes without saying that it is necessary to consider mixing with mass media. In other words, when designing omnichannel, it is sufficient to follow the conventional wisdom that it is necessary to aim for overall optimization. Of course, cost analysis is required.

It is expected that small and medium-sized enterprises will have difficulty securing personnel capable of designing this omnichannel system, but they can consider asking specialized consultants or specialized companies for help. There is also an urgent need to train consultants who can meet this need.