On Oct 14, news headlines emphasized Ginza Mitsukoshi department store’s target of reaching 100 billion yen of annual business growth, as the store revealed its renewed floors to the public. Since its previous large-scale renewal taking place in 2010, Ginza Mitsukoshi’s sales have increased from 60 billion yen to 75 billion yen. The Tokyo 2020 Olympics is expected to bring in numerous visitors to Japan, and the commercial facilities in the Ginza area are getting ready to welcome the great number of tourists to come.
In front of the press gathered for the opening of the renewed Ginza Mitsukoshi, President and Representative Director Hiroshi Ohnishi of Isetan Mitsukoshi Holdings explained that, “the target is 100 billion yen worth of business”.
“The renewal is not so much about the appearance of our floors and more about whether or not we are keeping up with customer needs. Our groceries floor continues to be popular, and one of our main focuses was to create appealing women’s fashion floors, something which we failed to do during the renewal taking place 5 years ago. There’s still more work to be done when it comes to women’s fashion. We must not rely too much on the brands themselves. We need to continue to exert our skills and create the right balance of items and ideal shopping spaces,” he continued.
“The biggest problem 5 years ago was that big brands were being grouped together on the east side of the fourth floor, making business very inefficient. In order to resolve this, we resorted to changing the selection of brand names, but this was only a short-term solution. We now see that it’s wiser to create the shopping spaces ourselves.”
“It’s more difficult to create the kind of distinctness that Isetan Shinjuku possesses when it comes to Ginza Mitsukoshi. The customers are different, and the merger of the Isetan and Mitsukoshi cultures isn’t complete yet, making it difficult for Ginza to model Isetan. As a reality, Ginza still tends to focus on brand names as opposed to creating unique shopping spaces.”
“As a group, we aim to gain 25% of our revenues from our unique shopping spaces. As for Isetan Shinjuku and Ginza Mitsukoshi, we want them to bring in more than that. The recent renewal and our continued focus on improving our shopping spaces will play key roles in defining the number for Ginza Mitsukoshi.”
“Five years ago, I said that Ginza Mitsukoshi should be selling at least 100 billion yen, given its current location. The store manager at the time told me that this was impossible, but today we see this to be a reasonable target. When the 8th floor duty free products floor opens, the total sales of Ginza Mitsukoshi are expected to be 80 billion yen or more.”
“The city Ginza is evolving quickly in preparation of the Tokyo 2020 Olympics. In the past, Ginza was the city which defined Japanese fashion and luxury, and it was a place that people from all over the world admired. Today, Ginza is becoming more and more diverse, in a good sense. It’s important to stand out in the city, but it’s also important to continue to attract new types of customers. Twenty million customers visit Ginza Mitsukoshi in a year, and it’s a bit disappointing that the total sales have not reached 100 billion yen yet. We want to provide the right type of services to each of our customers so that they can walk through our floors to purchase many items that appeal to them.”
“Recently, families living close to Ginza come to our store. We want to be able to attract all types of customers living in this area. Our goal is not to raise our current annual customer number from 20 million to 30 million, but to raise the amount of money spent by each customer. Our customers spend a lot of their money at our groceries floor, and we want them to spend more on our women’s fashion floors, which are currently our weak point.”
“Twenty percent of our sales are coming from our international customers, so we plan to continue to market our products to this group. At the same time, we want to keep our other customers satisfied as well.”
“Our new 8th floor duty free products floor will focus on made in Japan, high quality items. This is where we want to make the most of our buying skills, to create a selection of appealing products. And we hope that this is what will make our duty free products floor unique from others,” concluded Ohnishi.
Text: Tatsuya Noda