7-Eleven looks to U.S. to inspire online revolution

Picture expired. Toshifumi Suzuki, chairman and CEO of Seven and I Holdings REUTERS

TOKYO —

The 81-year-old Japanese executive who built 7-Eleven into the world’s biggest convenience store chain has a new mission: turning more than 50,000 bricks and mortar stores in Japan into portals to a new online retail empire.

To do it, Toshifumi Suzuki, the chief executive of department store to mail order retailer Seven & I Holdings Co, is once again seeking inspiration in the United States. It’s over 40 years since he kickstarted a revolution in Japanese retail by bringing 7-Eleven stores across the Pacific, eventually buying the U.S. owners after they sought bankruptcy protection.

In Suzuki’s future vision, goods ordered online from Seven & I’s department stores and supermarkets, as well as outside partners, will be delivered to and picked up from the thousands of 7-Eleven stores spread across Japan at customers’ convenience. Most are open 24 hours a day.

“I’ve been talking for a while inside the company about integrating the real (bricks and mortar) side with the Internet, but nobody was taking it seriously,” Suzuki told Reuters. In September, the Japanese retail guru decided to change all that.

He dispatched about 50 heads of the group’s companies - his top lieutenants - on a mission to the U.S. He instructed them to visit retailers like Macy’s Inc, shopping malls and Internet companies, examples of what he called “omnichannel” integration that are beginning to yield results - with orders to figure out how to apply it in Japan.

“In the U.S. they observed, they listened and they realized that this was possible, and now they’re all motivated,” Suzuki said.

SEEKING PARTNERS

Suzuki said the company is already in discussions on point-of-pickup arrangements for Japan with online retailers, including major players.

“We’ve had lots of approaches from people wanting to be partners,” Suzuki said, although Amazon.com is not among them.

At the moment, 7-Eleven’s stores in Japan don’t offer the range of e-commerce services available at their U.S. counterparts. On the other side of the Pacific, for example, 7-Eleven maintains dedicated lockers for picking up merchandise ordered online from Amazon.

Amazon does have point-of-pickup arrangements with 7-Eleven’s chief Japan rivals, FamilyMart Co Ltd and Lawson Inc. But 7-Eleven only offers such services for limited online product offerings, such as upscale cosmetics, purchased from other Seven and I retailers.

With no plans to step down any time soon, Suzuki has a reputation for a willingness to innovate and make big plays. In 1991, his company acquired a majority stake in its U.S. mentor and original 7-Eleven Inc owner Southland Corp.

The Japanese company then turned its U.S. unit around, transferring sophisticated data systems developed in the U.S. but refined in Japan, to manage inventories and optimize merchandise strategy at individual stores.

The company also pioneered many of the services and products - freshly prepared “bento” box meals, 24-hour banking and bill payments, a premium private label brand - that made Japan’s convenience stores and especially 7-Eleven among the most profitable in the world.

To bolster its offerings in other retail segments, last month it acquired a 49.9% stake in the operator of 10 Barneys New York high-end apparel stores in Japan.

(c) Copyright Thomson Reuters 2014

  • 1

    Alex Roncelli

    I don't understand. Maybe in a high congested area where delivering furniture or such impedes traffic, like Japan. If not in those circumstances, going somewhere to pick something up to drag to your house is inconvenient.

  • 2

    commanteer

    I can think of a few cases where I might want something delivered to a 7/11. 1-I am working all the time and I live alone, with nobody to accept delivery for me during working hours (This would be quite a few people in Japan) 2-I am ordering something I don't want my wife/roommate to see. 3-I get frequent deliveries and work at home, and don't want to answer the door several times a day.

  • 1

    HowardStern

    Just to be clear, 7-11 is originally a usa company but this guy bought it and built it to what it is today. Do I have this right? I always thought 7-11 was american.

  • 1

    Stephen Knight

    Yes, 7-11 was originally an American company. 7-11 Japan started through a licensing arrangement put together with the U.S. parent by Ito-chu Corp., a major trading house here; it was only after 7-11 Japan was well-established that they turned around and bought the U.S. parent company and began exporting some of the management and technology innovations developed in Japan. The U.S. entity is still responsible for the management of its franchises there.

  • 1

    wtfjapan

    why would Amazon need 7/11 as a pickup point, Kuroneko already delivers Amazon order from the US to your door.

  • 0

    Robert Chou

    wtfjapan - true but sometimes people arent home and dont want packages left at their front door. 7-11's are already pretty ubiquitous and it wouldnt take much for someone to divert their daily commute to pick something up. It would be especially convenient if they already to go 7-11 for their daily coffee.

  • 0

    avigator

    Bring them back to the US, Japanese style. Cannot stand the junk they sell in the US at their inconvenience stores.

  • 0

    TedJohnson

    I live in the US and I think I've only seen one 7-11 in my lifetime. This is pretty neat.

  • 0

    Farmboy

    In the US, I can see using 7-11 as a point of pickup because the system of home delivery is pretty weak. In Japan, though, the only need I see is for people who have irregular hours, and who can't predict when they'll be home.

Login to leave a comment

OR

More in Executive Impact

View all

View all