"Towards 100 Billion Yen in Annual Sales" was the headline for the grand opening of the remodeled Ginza Mitsukoshi on October 14th. Five years have passed since the 2010 expansion and remodel, and sales have grown from approximately 60 billion yen at the time to 75 billion yen. With the rise in inbound tourism, large-scale commercial facilities are opening one after another in the area leading up to 2020. The city itself is undergoing major changes, and 100 billion yen is no longer a pipe dream but an achievable goal.
The full text of the interview at the Ginza Mitsukoshi grand opening press conference, in which Mitsukoshi Isetan Holdings President and CEO Taiyo Onishi told gathered reporters, "100 billion yen is within our sights."
-First of all, what are your thoughts on this remodel?
Onishi: Rather than being a one-off remodel, it's all about responding to changes in our customers' needs. Five years ago, a major issue in our remodeling was poor sales of women's clothing, which ultimately led to a larger share of the food market. This time, our remodeling focused on strengthening the uniqueness of our women's clothing and our curated shops, but honestly, we're still only halfway there. To truly distinguish ourselves in Ginza, we need to create more truly curated women's clothing areas that don't rely on brands.
--What specifically are these challenges?
Onishi: This time, our challenge was to address the extremely inefficient situation where we concentrated major brands on the fourth floor of the east side, which was added five years ago. Ultimately, we can't deny that the changes resulted in a brand swap. We should have been more daring with curated items, or perhaps we should have taken more control over our merchandising, especially since we already have our own curated sales areas on the third and fourth floors of the main building.
--Why is it so difficult to achieve the uniqueness that Isetan Shinjuku has achieved in the Ginza store? Onishi: That's a difficult question. It's true that customer tastes are different. Currently, the Merchandise Management Department operates horizontally, and buyers are in charge of merchandising, so it should be possible to replicate what was done at the Shinjuku store at the Ginza store. However, the organizational changes implemented over the past two years have not yet fully functioned. Also, I think the strong will to prioritize unique merchandising rather than simply switching brands has not been fully realized.
--Regarding the independent editing, what share of overall sales are you aiming for?
Onishi: The company as a whole is aiming for 25% in the medium term, including purchasing structure reforms. However, I believe the Ginza and Shinjuku stores need to exceed this. For the Ginza store, I think the key is how we improve the precision of the luxury section on the fourth floor of the new building and the merchandising on the main building's floors.
--How much of an increase in sales do you expect from this remodel? Onishi: Five years ago, I said that if I opened this store on the corner of Ginza 4-Chome, I would have to do at least 100 billion yen in sales. The store manager and general manager at the time told me that it was impossible, but now it's becoming a achievable goal. We haven't disclosed sales figures for the airport-style duty-free store that will open on the 8th floor, but including that, we're currently aiming for just over 80 billion yen, so I think 100 billion yen is within our sights in the future.
--The Ginza area is undergoing major changes as we approach 2020. What direction is Ginza Mitsukoshi aiming for in this context?
Onishi: The Ginza area itself is undergoing major changes. Ginza used to be well-maintained and was known as "the Ginza of the world," but now it's becoming a more diverse area, in a positive sense. The streetscapes on the east and west sides of Harumi-dori, with this store at the center, are completely different. Because we do business in the heart of this area, I believe we must demonstrate our strengths. While it's important to consider how we can impact the Ginza area, we also believe that we must attract new customers. While 20 million customers visit our store annually, our sales are less than 100 billion yen, so we believe it's important to provide truly one-on-one hospitality to our customers and create an environment where they can continue to shop.
--Who are your new customers?
Onishi: In recent years, we've seen an increase in relatively young families living in eastern Tokyo and the Tokyo bay area, but Ginza has a broad commercial area, so we're also considering creating a store that will attract customers from western Tokyo.
--We expect the number of visitors to Ginza to continue to increase in the future. How much do you expect the number of customers to increase?
Onishi: Our Ginza store is approximately 37,000 square meters, so we're not aiming to increase the current 20 million customers to 30 million. I think it's more important to increase the amount of purchases per person. Because women's clothing is weak, the balance of food is high, which inevitably leads to a lower average customer spend. I believe the store should emphasize fashion more.
--Are there any measures in place to cater to foreign tourists in this remodel?
Onishi: We believe that we need to create a store that analyzes the interests of our target customers, rather than just focusing on foreign tourists. Currently, sales to foreign customers at this store exceed 20%, and we will create a merchandise structure that caters to these customers, but this does not mean that we will simply focus on them. In that sense, with this remodel, we plan to accommodate foreign customers at the airport-style duty-free store scheduled to open within the year, but we are by no means promoting the creation of a store specifically for foreign customers.
--There's also news that Lotte will open a duty-free store in the city next spring, so I think the number of duty-free stores in the city will increase in the future. How do you plan to promote the unique Isetan Mitsukoshi identity in these duty-free stores?
Onishi: Luxury and cosmetics are broad categories, but we want to firmly brand ourselves as "Japan Premium." The downtown duty-free store on the 8th floor will be the first to unveil this, so I think how well we can present and receive positive feedback on the quality Japanese products that only we can offer will set us apart from other downtown duty-free stores such as Lotte.
Text: Noda Tatsuya
