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Underground to the Main Stage – Foodhall at Department Stores

2017.03.31

Traditionally, basement floor, fondly known as “Depachika”, of Japanese department stores hosts food hall.  They are amusement park of food and drinks.  You can find new and old, fresh and vintage, Japanese and exotic, simple and complicated items spread over the massive floor.  You could almost spend all day, snacking and drinking your way.

Artificial Intelligence Sommelier


At the corner of the drinks section, in collaboration with a software application maker, the customers can try Sommelier application.  February was for Japanese Sake; March was for wine. There are three choices to try and rate.  The application would make the best match for your taste from the items in stock.  It is very much trial stage, but with the attractive human type Robot “Pepper” being the customer service attendant, there are plenty of curious customers coming to see.

Another store hosts a craft beer brewery in store.  The customers can see the process while enjoying the unique, fresh beer.  The store manager was expecting after work business people, but it turned out that customers kept on coming from lunch time onwards.  The key was to experience different flavours in a casual environment.

Collaboration with Local Suppliers


The strength of the department stores/food halls is that the customers can compare the different offers from various brands.  One department store in Kyoto started offering a pick and mix of exquisite Japanese sweets across many local shops with histories over 100 years and beyond.  As they are scattered around in Kyoto city, it is not possible to pick a set of items from different shops.  This department store made it possible, with the business relationship which stretches, again over 100 years.  Without this historical trusts through generations, it would not be possible to offer the assortment of rivalling establishments.

At the same time, with the new generation of suppliers with “kodawari” (please see the article a few weeks earlier) provenance, Kyoto store will host a local craft gin bar for the limited time.  There is no time to sit on the special relationship, but it is always necessary to develop new.

Being the Leader within Department Stores


The department stores have seen the decline in the sales since 1991.  The clothing is down by 50%, but the food sector is down only 10%.  The reduction in sales is much smaller if the statistics are limited to sweets.  Concentrating your effort on the least affected section is a natural business choice.

With changing nature of the market and customer preference on provenance and unique items, the established department stores have to throw everything they have to survive.  Historical ties with local stores, providing new products from outside of Japan, and new ways to service the curiosity of the customers through more experience oriented stores are all on offer under one roof.  This, at the moment, is keeping the consumers’ attraction.

The new wave of competitions from independent novelty stores, supermarkets, convenience stores chain and internet shops, the department stores/food hall business must flex their muscles to the maximum to keep on top of the competition.

The widest possible products range and the experience like nowhere else are the keys to stay as the champion of the ever fragmenting, very competitive Japanese retail market.

 

 

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