Wal-Mart is by far the world’s largest retailer and owes its success to its highly efficient business practices as well as its quite distinct corporate philosophy and culture. These factors generated a huge amount of interest when Wal-Mart in 2002 bought a stake in Seiyu, a leading but troubled domestic retailer, and thereby began its activities in Japan. This public discussion was carried out on various levels, but the most detailed debate occurred in Japan’s specialist journals for the retail industry. During the years 2003 and 2004, the three leading journals published an astonishing 100 articles with a total of 400 pages on Wal-Mart/Seiyu related issues.
Japanese retail journals such as Gekiryu Magazine, Hanbai Kakushin, and Chain Store Age enjoy high readerships. In filling their pages, they also enjoy close collaboration with retail companies, with the latter allowing the journals to feature their activities in great detail. A/P Meyer-Ohle has interviewed the editors of these journals, and they have largely agreed that Japan’s retail journals owe their existence to the highly complex structure of the Japanese distribution system. In an industry that has seen a lesser degree of concentration than in most other advanced countries, the large numbers of retailers, wholesalers and manufacturers are closely interdependent, and therefore want to inform others about what they are doing, while similarly wanting to be informed about other companies’ activities.
In regard to Wal-Mart’s entry, A/P Meyer-Ohle’s study of the retail journals identified four major areas of discussion. The first is store development, where every feature of Wal-Mart’s stores in Japan has been featured in great detail. Retail journals highlighted the scientific approach that Wal-Mart takes in designing its stores. The second area of interest is pricing, where Wal-Mart’s Every Day Low Price policy drew a lot of skepticism in regard to the appropriateness of this concept for Japan. In regard to supplier relationships, the third area of interest, retail journals recognized the relative care with which Wal-Mart/Seiyu has been moving in this area. In contrast to other foreign retailers such as Carrefour, Wal-Mart did not reject outright collaborating with Japan’s strong wholesale sector. The final area of interest is general corporate reorganization, where the journals catered to their readers’ curiosity as to how Wal-Mart would proceed to instill its distinct values and practices into its Japanese partner company.
In discussing Wal-Mart, Japan’s retail journals not only assessed the general state of development of Japanese retailing, but also frequently pointed with some pride to examples of domestic companies that have done similar things, and in doing so were supposedly even more successful than Wal-Mart/Seiyu. Indeed, a major finding of this study is that actors in the distribution sector, be that retailers, wholesalers or manufacturers, seem to be communicating by the way of retail journals, voicing their opinions as to how practices in the industry should develop or where they see themselves in this regard. For example, the President of Aeon, Japan’s largest retail group frequently uses retail journals to voice his ideas, many of which are actually not all that different from those of Wal-Mart. This communication seems to be important, since currently no company appears strong enough to achieve larger paradigm changes on its own. Wal-Mart, probably on advice from its local partner Seiyu, has largely collaborated with retail journals by providing them with information, allowing them access to its stores and backup operations, and also giving them the opportunity to interview personnel on all levels of the organization. This puts it in stark contrast to other retailers like Carrefour, which have been less forthcoming in this regard, and have led to a lot of speculative reporting in the Japanese press. This fact leads to interesting questions for further research about how communication strategies relate to success in internationalization processes.
This is not the first time that A/P Meyer-Ohle has looked at the Japanese retail market. Japanese retailing has by far not received as much attention as other sectors of the Japanese economy, this largely owing to the fact that Japanese companies themselves have not posed a threat to overseas competitors as have Japanese manufacturers or financial institutions. Still, retailing is very closely related to everyday life in Japan and as such, A/P Meyer-Ohle finds it a fascinating field to study. In his publications he has looked at it from different perspectives, be that the innovation of retail formats, entrepreneurship, store choice by consumers, or governmental policies for the retail sector. Many of his results have been published in his book Innovation and Dynamics in Retailing – From Techniques to Formats to Systems, Palgrave Macmillan 2003.
The results of project on the internationalization of Japanese retailing will be published in The International Review of Retail, Distribution and Consumer Research by mid 2007. Please contact A/P Meyer-Ohle if you want a preliminary copy of the article.