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    CX Innovations in Japanese eCommerce

    Feb 11, 2021 10:12:15 AM | Michael Rollins

    The range of e-commerce experiences available to online shoppers is rich and ever-evolving, and over the last year we've witnessed a rapid acceleration of the pace of change and innovation in what is already a dynamic market.

    Retailers here and around the world are developing new and creative ways to provide eCommerce shopping experience that draw on both the rich, evolving technologies of the medium and customers' desire to approximate the in-store, retail shopping experience.

    In this article we'll take a look at some examples of recent directions Japanese retailers are moving in as they work to up their e-commerce game. We’ve put together a handful of innovative online shopping experiences that are becoming more common (and, some might say, essential) today in e-commerce. We’ve grouped them into these four categories: 

    1. Interactive Shopping
    2. Live Commerce
    3. Personalization
    4. Subscription Services

    We'll take a look at how each is being used by companies and brands here in Japan. As you read, we encourage you to consider how the examples we present here might be put to good use in your own EC operation.

    Interactive Shopping

    Many companies around the world are dealing with the changing times by making the Customer Experience (CX) of their e-commerce channel more engaging, and interactive Shopping is one way they're doing so. Examples of technologies being used here in Japan and abroad are:

    • Virtual Stores
    • Virtual Reality (VR)
    • Augmented Reality (AR)
    • Artificial Intelligence (AI)

    Let's look at each in turn.

    Virtual Stores

    A Wall Street Journal Report described the emergence of virtual stores, which offer a new kind of shopping experiences for those stuck at home during the pandemic. Virtual stores allow customers to to browse simulated versions of physical stores online, in some cases even recreating the in-store experience to include the music you would hear were you actually shopping there.

    Here are a few Virtual Stores in Japan worth checking out: 

    Internationally renowned designer Thom Browne is heralded as the first virtual store to come from Osaka's distinguished Hankyu department store. A classy and well-designed 3D space allows users to inspect and click on items before adding them to their shopping cart.

    Home decor and design outlet Living House presents three virtual stores to represent its Osaka and one from Tokyo showrooms. The user experience allows one to navigate through multiple floors of merchandise and scroll over items to check product details and prices. 

    Women’s fashion retailer Smileland brings a direct representation of its floor plan found at it’s Parco department store location in Shibuya, Tokyo. Floor guide navigation, point and click product displays, and other features round out the virtual shopping experience. 

    Living House - Example of Virtual Store

    Living House - Example of Virtual Store

    Virtual Reality (VR)

    Virtual Reality (VR) is not particularly new, but retailers continue to find new and interesting  applications for the technology.

    During the 2020 Virtual Market event in Japan, the world’s largest Virtual Reality (VR) event, apparel brand WEGO and department store giant Isetan participated with their own VR versions of their stores. Shoppers could ‘visit’ the stores as long as they had access to a computer. The stores featured virtual recreations of real shopable items as well as virtual clerks that users could interact with. 

    In December 2020, international brand (and our client) Cole Haan promoted a VR experience to its Japanese market. This PR event, presented on YouTube, allowed users to use VR to checkout their newest (physical) concept store, GRANDSHØP on Harajuku’s Cat Street. The experience allowed users to see the inside of the store, complete with dancers, showing off the newest Cole Haan collection. 

    Augmented Reality (AR)

    Augmented Reality (AR) is a means of combining the physical and virtual worlds to answer "what if" questions such like "how will this lamp look in my living room" or "does this dress suit me?"

    In 2019 the furniture store LOW-YA launched an AR app for its products so users can see how as many as 600 of their furniture products would look in their home. 

    LOWYA AR -  Example of AR online shopping

    LOWYA AR -  Example of AR online shopping

    They've followed up since then with LOWYA306 and 見た目でサーチ, which allows users to search for similar products after uploading an image of a pice of furniture.

    Other forms of media being used include interactive videos. These types of videos allow users to interact with content on the screen by clicking directly on the video.

    Most interactive videos function to show detailed information to users about a product. However, some are used to offer a fun and engaging user experience through quizzes, games, events or storytelling.

    MIL Example of interactive videoMIL Example of interactive video 

    Luxury brand Hermès launched a global campaign called Hermès on Stage. The campaign leads users through a mystery game in which the user has to figure out who stole a piece of highly sought-after Hermès jewelry. The game concludes at the jewelry line’s landing page so that they can wrap up the mystery with a bit of online shopping. 

    Hermès Ad - Hermès On Stage 

    Hermès Ad - Hermès On Stage 

    Artificial Intelligence (AI)

    The use of Artificial Intelligence (AI) has been growing in recent years. It’s safe to say that we’ve all had our fair share of interactions with chatbots or other AI operatives online. Some companies are even creating entire departments dedicated to the implementation of such functions. 

    Fashion retail site ZOZO for instance, has created a subsidiary company ZOZO Technologies, dedicated to finding tech solutions related to fashion and eCommerce for ZOZO. Some of their work has included creating an AI-based function that will recommend similar clothes to users based on their search.

    They have also created physical products like the ZOZOMAT and ZOZOSUIT2 (an upgrade from the original ZOZOSUIT - which had some issues). These products allow ZOZO to use the data to start their own original line of clothes as well as recommend the “perfect fit” size clothing to users. 

    The ZOZOMAT

    The ZOZOMAT

    Uniqlo teamed up with Google to develop its AI Personal Assistant. This next-level chatbot offers personalized recommendations of items to users based on their input. 

    Using a similar technology to Google Assistant, Uniqlo has developed a “personal assistant” chat that relies on AI. According to WTVOX, “The app helps the users to find clothes, see the product rankings, use advanced searching services, find fashion items that are featured in magazines, or even recommend products according to each customer’s daily horoscope.” Very cool!

    Live Commerce 

    Another expanding channel for interactive experiences is Live Commerce. Through Live Commerce, users can see, in real-time, how broadcasters use certain products, ask questions and even purchase items in a way that mirrors an in-store shopping experience. 

    The challenges presented by the pandemic have accelerated even more the need for creating and engaging Live Commerce experiences. With more people staying at home these days, the Live Commerce experience offers a new way to engage with shoppers. 

    With its roots from China, Live Commerce is only expected to grow, especially among young Japanese consumers where apps like TikTok, 17Live and other live media apps are the most popular. 

    Live Commerce combines the eCommerce shopping experience with live video streaming. This enables users to not only see the clothing on a live person but also interact with the salesperson streamer, in real-time, leading to a quicker--and more confident--purchase decision. 

    Live Shop! App

    Live Shop! App

    Many Japanese consumers, especially women, need to see an “example” of how they would use a product in their day-to-day lives. 

    UI/UX Designer of EC site Hamee, Tomoya Hirayama, notes that young Japanese women, “need to see how they would normally use the product”. This thinking has shaped a lot of Hamee’s direction for the product images on their site where the pose and atmosphere of each product image are taken into account before uploading.

    Micro-influencer and live-video fashion broadcaster Ren Minematsu, also notes the importance of showing “how to use” a product, whether it be a jacket or shirt, as a part of his broadcasts. For example, during a live broadcast, Minemitsu explains how he would wear an item, what he would pair it with and when he would wear it. 

    With this in mind, it is no wonder that Live Commerce works especially well for young consumers. The platform allows users to be able to see how a product is used or worn, and even allows for asking questions to the broadcasters.

    Currently, the age demographic most aware of Live Commerce is teenagers (40%). However, the demographic of people in their 20s is not far behind (36.7%). The market is positioned and expected to grow into other age groups in that not-so-distant future. 

    Evidence of this expectation can be found in that larger eCommerce  companies like Rakuten & Yahoo! are now offering their own Live Commerce spaces with Rakuten Live & Yahoo Auction Live

    Personalization 

    According to the data collected by the Adobe Digital Experience Index 2019, 60% of Japanese survey takers said they “expect a personalized experience regardless of if they are shopping online or offline.” 

    This expectation has increased the number of brands offering customized products and services for consumers. One such company is FUJIMI. FUJIMI offers beauty supplements that are selected on a person-to-person basis based on answers on a pre-purchase survey given to customers. That’s being well-taken care of for sure!

    Another example is haircare brand MEDULLA, a retailer that emphasizes their personalized hair care shampoos and conditioners for individual users.

    MEDULLA & Fujimi Survey Screens

    MEDULLA & Fujimi Survey Screens 

    Users now expect experiences that are not only tailored to them, but also offer a chance to learn more about themselves. With the online services such as those offered by FUJIMI, users come to learn about their skin condition. Then, when offered an ideal product solution, they learn the reason why it was chosen just for them.

    Subscription Services 

    In recent years, Japan has seen a notable increase of companies offering subscription products and services. According to a study from Macromill the most used services are for video streaming, music, books and comics. 

    In the same study, users were asked why they decided to start, and continue, a subscription service. “Price” and “ease of use” were the top reasons given. With this in mind we can say that while convenience is an important factor for users, price will always take an important role in decision making. 

    Among food services, takeaway lunch services like Potluck are targeting busy workers and allow them to reserve in advance a particular bento they want and pick it up without any time to waste. 

    A few apparel companies have also tried their hand at online subscription services, with varying degrees of success. 

    ZOZOTOWN -  Now defunct clothing subscription service

    ZOZOTOWN -  Now defunct clothing subscription service

    Online fashion store ZOZOTOWN announced at the beginning of this year it would end its clothing subscription service,「おまかせ定期便」, just 1 year after the service started. Though it is difficult to discern the reasons behind the decision, many speculate the sudden shut down was due to the introduction of various, costly, services around the same period (ZOZOSUIT in its first iteration), paired with the lack of delivery on the marketing messages promised.

    Though some brands approach clothing subscription services similar to ZOZOTOWN, such as try and buy, others have taken a stronger “subscription” approach, such as by offering rental services for clothing. Domestic brands like Air Closet and RCawaii offer personalized clothing rental options users can choose from for a monthly fee of between 7,000 and 20,000 yen. 

    airCloset homepage - Example of subscription service

    airCloset homepage - Example of subscription service

    The appeal and benefits of creating a steady flow of subscription income are numerous and substantial, particularly in these uncertain times. As with most things, though, proper execution is key to succeeding with a subscription business, Shopify recently published a brief but excellent guide to starting a subscription business if you are interested in exploring this.

    In Closing

    We’ve looked at just a handful of the new directions EC retailers are moving in as they push the CX envelope in the online shopping space. Going forward we expect to see significant growth in anything related to "real-time" when it comes to both online shopping per se as well as other points along the customer journey that lead up to (and possibly even follow) it.

    Have a comment or examples of your to share? Share it below, we'd love to hear from you.

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