Dept Stores Look To Rentals, Experience - Based Services

Dept stores look to rentals, experience-based services

The Yomiuri ShimbunAmid their growing rivalry with online retailers, big brick-and-mortar outlets such as department stores and fashion buildings are working to become "stores that don't sell things," offering rental or experience-based services to draw in more people.

Synergistic effect

On Nov. 23, luxury watch rental company Karitoke opened a branch in the Yurakucho Marui fashion building in Chiyoda Ward, Tokyo.

The shop has about 60 watches from such luxury brands as Rolex, Omega and Hublot, whose brand-new watches can cost as much as ¥2 million. Clients can choose from among four rental options, with monthly fees ranging from ¥3,980 to ¥19,800 excluding tax and lease one watch they like out of the selections. They can also change their rented watch once a month.

"The response has been better than we expected," said Masahiro Tomita, chief buyer in charge of furnishing Marui Group Co.’s tenant shops. "Some customers may want to buy their own watch after they rent one. In that sense, we can expect a synergistic effect with sales."

Department store Sogo & Seibu Co.’s Chiba outlet is trying to stay in business as a "specialty shop offering experience-based services."

On Nov. 25, it opened in its annex a Makers’ Base studio that offers such services as workshops for making accessories. The shop has cutting-edge technology, such as leather processing machines, on a floor space of about 400 square meters, allowing customers to make one-of-a-kind items.

A 58-year-old man from Chiba made a cushion with a photo of his pet cat on it.

"Shops today sell similar stuff everywhere, and I think the store took an interesting approach by offering customers new experiences," he said.

The outlet also provides a common space for customers to study and interact with other people.

Kintetsu department store refurbished the event space of its Abeno Harukas main department store, in Abeno Ward, Osaka, into a learning space called Sutoaka. The store teamed up with Tokyo-based startup Street Academy Inc. to offer one-shot lessons in things like photography and English conversation under the theme of "casually improving yourself," aimed at women on their way home from work.

40% decline in sales

Department stores and other commercial facilities are using trial and error to find ways to bring in customers to their stores, because the online shopping business is taking away customers, particularly in their leading field of clothing retail.

Sales at department stores nationwide were about ¥5.98 trillion in 2016, or down 40 percent from their peak of about ¥9.71 trillion in 1991, according to the Japan Department Stores Association. In contrast, the online shopping business has enjoyed constant growth, with its sales exceeding ¥15 trillion in 2016.

"Brick-and-mortar stores can’t win simply by selling things," said Motoko Matsushita, Nomura Research Institute’s senior consultant. "They’re under pressure to provide customers with a reason to come to their stores by offering value-added products unique to them or by preparing special attractions." Speech