Japan retailers target Amazon with in-store pickup services for internet orders

TOKYO -- Japan's major retailers are beginning to offer more in-store pickup services for internet orders, both to save their customers the irritation of having to wait around at home for deliveries and increase foot traffic at their bricks-and-mortar shops.

The move is also designed to hold down delivery costs, while at the same time setting the retailers up to confront online-only behemoths like Amazon.

Fast Retailing Co., which operates clothing chain Uniqlo, made the in-store pickup option for orders from its internet shops free on April 3. Previously, the firm had charged 450 yen on orders less than 5,000 yen.

"If they get orders delivered to their home, customers could have to wait through the entire package arrival window. But with in-store pickup they can go get their orders whenever they like," a Fast Retailing representative said. Furthermore, "we can reduce logistics costs by grouping orders together and sending them to the shop in a single shipment."

Convenience stores, too, are boosting their in-store pickup services. Customers can order fresh foods online in the morning -- foods the stores don't normally stock -- and then pick them up on their way home in the evening.

"There's a lot of demand among working mothers," said a representative from convenience store giant Lawson Inc. "We can use our existing distribution net for our stores, so we don't need any new capital investment to offer the service."

Starting on March 6 this year, Lawson customers have been able to use a dedicated smartphone app to order items for pickup at their preferred store. The "Lawson Fresh Pick" service is currently available at about 200 shops in Metropolitan Tokyo and part of neighboring Kanagawa Prefecture. The some 500 products on offer include many not typically carried on convenience store shelves, in addition to fresh vegetables and tofu. The company had already been providing fresh food home delivery, but the service had drawn complaints that the deliveries often arrived when customers were not home.

Behind these efforts to expand in-store pickup is the looming presence of internet commerce giants like Amazon, which have flooded Japan's home parcel delivery networks with packages. Amazon and its ilk do not have any physical stores in Japan, so "in-store pickup is an advantage for companies that do have bricks-and-mortar shops," commented logistics consultant Ryoichi Kakui. "Bringing people into the shop also builds customer loyalty and increases the stores' ability to attract shoppers."

MUJI stores operator Ryohin Keikaku Co. as well as the Yodobashi Camera Co. electronics shop chain are also setting up in-store pickup services for internet orders. Meanwhile, convenience store chain Seven-Eleven Japan Co. also allows customers of its "Seven Meal" food delivery service to pick up orders at a designated store.

(Japanese original by Akane Imamura, Business News Department)