2018/08/21(Sender: FC Owners Operations Office)
Convenience stores, often cited as a prime example of an industry utilizing franchising, have recently seen an increase in cases where they are tackling "new things." If you were to open a convenience store franchise, which not only offers stable earnings but is also strengthening its aggressive stance, what kind of work style would you be able to expect? This time, we will introduce the trends in the convenience store industry from 2018 onwards.
Since 2018, the convenience store industry has been successively announcing plans to enter into completely new businesses different from its existing operations. They have also started new initiatives to improve the ease of shopping. It is said that these numerous attempts to create "new value" are a measure to address the slowdown in the overall growth of the convenience store industry.
As of 2017, the number of convenience stores continues to increase, but the number of customers at existing stores continues to decline. This is thought to be due to the nationwide saturation of the convenience store market, as well as the weakening of the "convenience" identity due to the rapid growth of the internet sales business. To overcome this situation, each convenience store is challenging itself to create new value.
Therefore, going forward, convenience store franchise management will require a "willingness to take on new challenges." New businesses are first introduced experimentally, mainly in company-owned stores, and if they show promise of generating profits, they are expanded nationwide. The proactive efforts of each owner are also key to success. Furthermore, efforts are needed to get the new business on track in order to secure and increase sales at one's own store. From these points, those who are looking to become convenience store franchise owners are those who want to constantly challenge themselves with new endeavors and grow.
One of the trends in "new things" being introduced at convenience stores is the introduction of IC tags to improve the convenience of shopping. IC tags are embedded in the packaging of almost all products, with the exception of some items such as oden, enabling self-checkout systems that allow for faster payment than when handled by store staff.
Store design utilizing IC tags has been introduced in some parts of the apparel industry, and its use in convenience stores is being advanced under the leadership of the Ministry of Economy, Trade and Industry. If self-checkout registers using IC tags are introduced, customers can complete the checkout process instantly simply by placing items in their shopping basket, making the payment process significantly smoother. This is expected to make shopping more enjoyable and convenient for customers, potentially leading to an increase in customer traffic.
Furthermore, IC tags play a significant role in in-store operations. With IC tags, inventory management becomes almost entirely automated, and expiration date management can be easily handled using a computer. Since cashiers are no longer needed, staffing levels can be reduced. By streamlining tasks such as cashier duties and inventory management, those resources can be allocated to improving the customer experience. This offers significant benefits to owners, especially those struggling with staff shortages. Conversely, if a store is selected to implement IC tags in the early stages of their adoption, there is a risk of unexpected problems that may arise, requiring the store to deal with them.
IC tags attached to products cost about 5 yen each as of February 2018, but costs are steadily decreasing. The goal is to reduce the cost to less than 1 yen in the future and to complete implementation in all convenience stores nationwide by 2025.
One trend among convenience stores is the active development of unique new businesses original to each chain. Whether the content matches the characteristics of convenience stores remains to be seen, but it is clear that they are aiming to increase their growth rate by providing new value to users.
A common trend in new businesses is sharing services that are completed solely by the users without the intervention of store staff.
For example, Lawson is implementing the installation of key storage boxes. These can be used when key exchange is necessary for car sharing, short-term rentals, or housekeeping services, allowing both parties to receive the keys within Lawson without having to coordinate schedules directly. A password that can only be used once is sent via email, enhancing security while enabling the use of sharing services without the involvement of store staff.
Another example is the shared bicycle service being introduced at Seven-Eleven. This service involves installing bicycles in each store, making them rental and return hubs. It is also highly convenient as it can be used by simply holding a transportation IC card over the unlocking machine.
Both aim to provide users with new "convenience" while encouraging impulse purchases at the store. Since there is no need to allocate personnel as it does not involve store staff, it is also advantageous for each owner as it is easier to increase profits. Conversely, if space cannot be secured to introduce these shared services, there is a possibility of falling behind other stores and other convenience stores.
FamilyMart is promoting the co-location of fitness gyms and coin laundries. This is unusual for facilities operated by a convenience store, but the fitness gyms aim to encourage impulse purchases after using the facility, and the coin laundries aim to encourage shopping while laundry is being washed and dried. Both take advantage of the strength of convenience stores that are open 24 hours a day, and since they are basically self-service that does not require the hands of store staff,it should be a strong ally for each owner in attracting customers. However, it is also a large capital investment for the store, so there is a possibility of taking on risks in some cases.
The convenience store industry may introduce many "new things" beyond those introduced here from 2018 onwards. Creating new value is a major challenge for each convenience store, whose growth has stagnated, and if you are considering opening a convenience store franchise, it is important to keep an eye on future trends.
(The information such as amounts, periods, and procedures introduced in this column are general in nature. For details, please contact FC Owners.)
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