Michelle Hespe speaks to Mr. Satoru Iimura, Executive Director of Loft — a chain of retail stores in Japan that became one of the five Global Honorees at this year’s IHA Global Innovation Awards (gia) at Chicago’s International Home + Housewares Show.
Loft was celebrating more than its gia win in Chicago this year. “2017 marks 30 years since the first Loft store opened in Shibuya, Tokyo, so entering gia became a significant opportunity for us to review everything by going back to the where we started, and in doing so, make a new start on our birthday,” says Mr. Iimura, who is in charge of merchandising, business planning and new business development at Loft. “Thanks to gia, we were motivated to explore our global standpoint and our future goals.”
Loft’s first store sold lifestyle accessories in Shibuya’s Seibu department store. Since then, Loft has constantly evolved yet remained true to its core purpose and philosophy of being a ‘container of the times’, adjusting to changes of each period and era, and thus meeting needs of urban people by providing new styles and tools in lifestyle products.
“Being market-oriented, we don’t force the logic of our manufacturers or suppliers on to our consumers. Instead, we collect and select merchandise with a consumers’ logic in mind, and operate our business on behalf of consumers,” says Iimura.
In 1996, Loft was incorporated as The Loft Co., and after the company introduced its innovative unit item inventory control system, it increased the number of stores rapidly. Now Loft has 110 stores in Japan, and to add to the many reasons to celebrate, soon Loft is expected to achieve its mid-term plan of reaching 100 billion yen turnover. “In 1996, Loft began to adopt its multi-store operation strategy, which would essentially serve an increasing number of customers,” explains Iimura. “While doing this, we strengthened our merchandising proposal of always offering new, great things, to ensure that our current customers remained loyal and that more people were attracted to Loft.”
But of course, it’s not all about the products. “We strive to present not only unique products, but services that can only be found in Loft,” says Iimura, explaining that his team adopts the ‘Loft WAY’ strategy to inspire customers on how to embrace and live the store’s philosophy, and ‘Loft NEXT’ is the idea of change being explored and exploited in the company’s online strategy, through its omni channels providing a fusion of e-commerce.
This focus on taking advantage of new technology has kept Loft at the top of its game. “There have been drastic changes in the Japanese retailing industry during the last decade, such as the entry and immediate expansion of discount stores,” explains Iimura. “In the miscellaneous accessory product category (‘zakka’ in Japanese), many companies from different industries such as fashion designers, joined the zakka market and further heated the competition. Alongside this, the rapid growth of e-commerce massively influenced the retailing industry, decreasing sales in traditional stores.”
As these shifts occurred, Loft continually analyzed its inventory data, updated and adopted new IT systems, and unified the management for ordering, buying, logistics and sales with a unit control system. This system identifies items that sell well or poorly, giving management the chance to follow the changing tastes of Loft customers. In addition, the team at Loft organizes and proposes new merchandise groups or lines with new themes on a quarterly basis, while privately developing in-house products in order to maintain a strong point of differentiation.
Loft has also adopted new technologies such as a 3D computer system to develop customized products and services, and a mobile application membership was created in order to analyze sales, shopping behaviors and customer profiles. To complement this, events were launched where SNS (Social Network Site) influencers are invited along, as part of the synergic sales promotional activities, online and in real stores.
Amidst all of these technological developments, Iimura and his team are acutely aware that they need to stay in touch with some of the more traditional elements of retailing — such as good old-fashioned service with a smile. “As technology advances, I feel that many channels are becoming more entangled and complicated,” says Iimura. “As this happens, the values of consumers tend to be further subdivided. In order to respond to consumers’ intentions, retailers should adapt to technological novelties, but at the same time, this give us all an opportunity to review our history, and traditional things and approaches. This means we can still experience and touch the good analogue elements of retail.”
Taking care of their staff is also a crucial element of the company’s business plan, and they like to give their staff a solid sense of job security. “By sustaining the company’s growth and prosperity, we give our employees good working conditions, thorough training in all departments, and their employment is guaranteed until the age of 65, so that they can enjoy cultural lifestyles,” says Iimura.
Loft managers take the look and feel of their stores very seriously, and testimony to this is the fact that by November 2016, there were 260 Visual Merchandising leaders working across the stores. Those leaders work closely with the marketing division of the head office to ensure campaigns and ideas are consistent across Japan.
The appearance of the stores and products at Loft is a special element of the business. In keeping with this, Loft has a range of cleverly themed zones for customers to be inspired by. The spaces were brought to life by the MIKAN architectural firm in Japan, famous for creating amazing modern, light-filled spaces, whether they be houses, nurseries, schools, commercial facilities or an expo pavilion.
For instance, ‘& HOME’ floors in Shibuya Loft store are organized into ‘Eating’ on the 3rd floor and ‘Renovation’ for the 4th floor. To complement the products, towers of carefully chosen books related to the themes are placed on sales floors so that customers can deepen their knowledge of products and their interest. There’s the ‘Cook & Dine’ sales floor where different eating styles are introduced, such as ‘Café Style’ and ‘Bento (lunchbox) Style’. All zones are entertainment spaces, with themes such as ‘cooking’, ‘eating’, ‘tasting’ and ‘learning’ flowing from one to another like the pages in a book or a magazine.
With so many new things going on in such a well-orchestrated manner, it’s no surprise that the gia judges were highly impressed by Loft. The imagination, innovation, technology business acumen that has been funneled into the 30 year-old business speaks for itself.
The jury agreed that Loft is: “A store that invites people to explore and try new things. The great floorplans and use of space, with beautiful lighting, add a sense of theater and entertainment, which draws customers back again and again.” The judges also thought that a focus on attracting bloggers and influencers has greatly benefitted the Loft brand, because word of mouth is some of the best possible advertising.
“We really enjoyed the supreme, honorable moment when our company was selected by the judges and jury as a gia Global Honoree,” says Iimura. “When it was announced at the gala dinner, we were lost in happiness and excitement. The atmosphere of the whole ballroom was heated with high-voltage energy. Then we enjoyed friendly conversations with the distinguished judges, as well as with other winners. We all shared those joyous moments, and all of them are now unforgettable memories.”
To learn more about Loft, visit www.loft.co.jp.
For more information about the gia (IHA Global Innovation Awards) program, the co-sponsors, or participating in 2017-2018, contact Piritta Törrö at firstname.lastname@example.org. Additional information on the gia program is also available online at www.housewares.org/show/gia-retail.
For more information about the International Home + Housewares Show and to pre-register for the 2018 Show, taking place in Chicago on March 10-13, 2018, please visit www.housewares.org.