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Message from Key Person in Retailing Segment

August 2018

We are committed to discovering unique offerings to be provided because of not selling to create services that are of value to customers.
Hajime Sasaki Senior Executive Officer
President and Representative Director,

The transition to shopping centers and fixed-term rental contracts has supported improvements to income thus far, and this transition is scheduled for completion in the fiscal year ending March 31, 2019. As for the e-commerce businesses that will be key to future growth, our three consecutive years of higher revenues seem unsatisfactory given the growth potential of the market.

It can be expected that the trend toward e-commerce, the shift from consumption of goods to consumption of experiences, the emergence of sharing economies, and other changes will accelerate going forward. With this in mind, we are testing various ideas for creating the stores of the future, which will comprise food vendors and service providers that cannot be replaced by e-commerce as well as experience providers, omni-channel retailers, and sharing facilitators that are synergistic with e-commerce.

In addition, we are moving forward with omni-channel retailing and personalization initiatives, which will be core elements of our future e-commerce strategies. We also recognize the need to revise our concept of stores. What can be done through the Internet can be left to this venue. In our stores, we will focus on what cannot be done through the Internet and what provides value to customers. For example, we have started education programs that allow employees to gain the necessary knowledge and skills for taking a counseling approach toward customer service with regard to women's shoes in light of a significant amount of concern customers have regarding their feet. We are also developing try-on stores, which do not have inventories and conduct sales via e-commerce frameworks. These stores reduce the need for back-office procedures, thereby enabling staff to focus more on customer service and facilitating this counseling approach. Looking ahead, we plan to leave sales to the Internet so that we can use stores to provide such counseling services as well as experiences and otherwise to customer-oriented customer service that is not preoccupied with sales. Another area where customers have concern is product sizes. We therefore want to make it possible for customers to order shoes of the perfect size over the Internet based on the shoes they own or measurements of their feet.

Our new approach toward retailing will be closer to service provision. Accordingly, we will be using lifetime value (LTV) to gauge our operations going forward, and our initiatives will be mindful of this. This evaluation method, we anticipate, will enable us to focus on what is actually beneficial to the customer, as opposed to short-term sales figures, which in turn will also allow us to provide more helpful services.

Furthermore, I think that catering to customers' needs with personalized products offered through stores and the Internet is part of our role in realizing an inclusive society. By divorcing the concept of retailing from the idea of selling, we are committed to discovering unique offerings to be provided because of not selling to create services that are of value to customers.

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