December 17, 2004

Improvements in Seiyu (WM in Japan)

The Financial Times has an excellent article on Seiyu, the Japanese discount retailer Wal*Mart owns 37% of:

At aSeiyu/Wal-Mart staff meeting, Masakazu Hattori, a senior merchandising director holds up an 80cm Christmas tree - the perfect size for space-constrained Japanese households.

According to the company's "Smart System" tracking software, the tree is selling fast at only three of Seiyu's 406 stores. At the others, not a single tree has been sold.

Mr Hattori excuses himself from the meeting and rings some stores. It turns out that at those where the tree has been selling well, it has been displayed decorated with lights and ornaments. At shops where none has been sold, it has stood unadorned and puzzled consumers have simply bypassed the strange-looking plastic plant.

The Christmas tree incident underlines an important point, says Jeff McAllister, chief operating officer of Wal-Mart Japan. Powerful as its IT systems are, they serve only as a preliminary step in uncovering the causes of problems.

Also very interesting is how the customers get to the stores:
"Today, since the majority of customers walk or take their bike [to our stores], if it rains, it has at least a 10-15 per cent impact on sales," says Mr McAllister. "[Predictive technology] will give us critical information, based on historical data, when it rains, here is what the customer buys and then ensure we get the product to the store in advance."

Posted by Kevin on December, 17 2004 at 10:23 AM