DEPARTMENT STORE
level stores just have so much space to fill . It is really tough . There is just so much space in these big buildings . If they were ideally suited to the modern shopper , then they would still be building them .”
He wonders how shoppers will respond to the change at the Ikebukuro Main Store .
“ I don ' t know how the traditional department store customer would like this transformation . But the problem is that the department stores can no longer rely on those traditional customers because , well , that creature is dying out . They have to target the younger cohorts as well .”
Baker suggests adopting a property developer ’ s perspective to understand the modern challenge : “ When a mall developer takes back a vacant department store space , they don ' t replace it with another department store , like-for-like , they chop the space up and rent it thematically to specialty stores , food & beverage , for example . This has been done many times in America .
“ In Thailand , a great example of this is the Isetan redevelopment in Bangkok ’ s CentralWorld . It is fantastic . So when you look at what a department store company is trying to do internally with these huge buildings , they are really just doing variations of that same idea that mall operators have been doing for years .”
The future of Japanese department stores Sogo & Seibu are not the only Japanese department stores facing something of an existential crisis as the world of retail evolves .
Baker believes the traditional , older Japanese department stores should think less about reinventing themselves and more about taking greater advantage of their natural assets .
“ Many are in heritage buildings , well integrated into public transport hubs , great at customer service – the Japanese are justly famous for their social skills – and increasingly expert with their digital capabilities .”
He says this combination of skills in customer interaction and digital is driving ‘ gaisho ’ sales – where the store associate goes to the customer rather than the customer going to the store – targeting high-networth individuals .
“ A lot of these customers are younger ‘ new money ’ customers ,” he continues . “ Aside from that , department stores at the international ports of entry and in other tourist locations are doing really well , particularly with duty free sales to tourists .
“ On top of that , Japanese department stores are woven into the cultural heritage much more than department stores elsewhere in the world . They are living art galleries .”
With 196 department stores trading in Japan
A sketch of Seibu Ikebukuro main store
34 www . insideretail . asia August 2024