INCLUSION

Retailing

Inclusion Championed by MARUI GROUP

01

Development of Inclusive Storesthat Offer Joy to All

Departure from Industry Conventions —Positioning of Food Vendors in Entrance Areas

With eyes to 2020, the year of the Tokyo 2020 Olympic and Paralympic Games, MARUI GROUP will promote customer
diversity and inclusion and strive to ascertain the ideal form of products, services, and stores that bring joy to all customers, regardless of their age, gender, or physical characteristics, through co-creation with all stakeholders.

The majority of department stores in Japan position cosmetics and brand-name shops in their entrance areas. Maruistores have also adopted this industry convention in the past. When developing Hakata Marui, we departed from thisconvention, positioning food vendors in entrance areas to develop the first inclusive, lifestyle-oriented Marui store thatcan be enjoyed by customers of all ages and genders. This innovation was inspired by co-creation activities with customers.
MARUI GROUP’s Response
Food vendors were positioned in entrance areas and theportion of floor space devoted to apparel was reduced
from around 60% to roughly 30%, making for a store thatis easy to visit for people of all ages and genders.

Customer Input“It would be nice to have a store that can be visited daily.”“I want a store that is enjoyable for everyone.”“I look for a comfortable atmosphere.”

Customer Diversity and Inclusion“Inclusion” is the concept of including those who havepreviously been excluded. MARUI GROUP seeks toachieve both sustainability and profitability throughinnovations to its businesses. As part of this undertaking, we seek to develop stores that offer a comfortableenvironment in which all customers, including seniorcitizens, differently abled individuals, non-Japanesepeople, and members of the LGBT community, can enjoy
shopping with peace of mind regardless of their age orgender. The development of such stores encapsulates
the concept of “customer diversity and inclusion” advocated by MARUI GROUP.

Previously

Going forward• Younger generations• Product lineups focused on apparel• People of all ages, genders, and physical characteristics• Expanded lineup of food vendors, services, and experiences

MARUI GROUP’s concept of “all customers”

Previously

Progress Unconstrained by Past Successes —Co-Creation Store Development
Prior to the opening of Hakata Marui, we held more than
600 planning meetings at which we spoke with an aggregate total of 15,000 customers. At these meetings, input
from customers indicated a desire for a store that could bevisited daily, that is enjoyable for everyone, and that offers
a comfortable atmosphere. Based on this input, wereduced the ratio of floor space devoted to apparel items
to around 30%. This led to the creation of the first inclusive, lifestyle-oriented Marui store. As a result, the numbers of visiting customers and purchases at Hakata Maruiin the fiscal year ended March 31, 2017, were 1.3 times
and 1.2 times higher than at Yurakucho Marui while thenumber of new EPOS cards issued was 1.5 times higher.
These figures surpassed prior records for newly opened
Marui stores. Hakata Marui continues to be loved by various customers today.
An amalgamation of MARUI GROUP’s co-creation store
development efforts with customers, the initiatives implemented at Hakata Marui are currently being introduced atother existing stores. These initiatives also signaled thestart of the Company’s co-creation activities with business

partners. Looking at a longer timeframe, we achieved a60% increase in total purchase numbers over the past
decade, with this number reaching 91 million in the fiscal
year ended March 31, 2017. This increase was a result ofrevisions to store development approaches; product categories, increasing the portion of floor space devoted torestaurants and service providers to around 30%; hospitality; and services—revisions that transformed our stores,
which were previously oriented toward younger generations, into places that are inviting to customers of all ages.
Ratios of Floor Space Devoted to Product Categories
Hakata Marui
Food and services 32%

Sundries 40%

Apparel 28%

Marui and Modi stores
14%

FY201433%

Food andservices
Sep. 2017

53%

Sundries

29%

Apparel39%

32%

Number of Purchases and Distribution by Age Group91 million

Ratio of Senior Citizens
The population of senior citizens over theage of 65 in Japan is 34.8 million.

27.5%
Source: Population Estimates, Statistics Bureau,
Ministry of Internal Affairs and Communications

12Ratio of Differently Abled Individuals
In Japan, 8.6 million people havephysical or mental disabilities.

6.8%
Source: Annual Report on Government
Measures for Persons with Disabilities,Cabinet Office, Government of Japan, 2017

Ratio of LGBT Community Members
One in 13 people in Japan is part of the LGBT
community, representing a ¥5,940 billion market.

7.6%
Source: LGBT Survey 2015,
Dentsu Diversity Lab, DENTSU INC., 2015

Age 40 and
above
64%

51 million
29%
Located on the first floor of Hakata Marui,Dashidokoro Hyoshiro is the first shop
integrated with a dining establishment
operated by Ajino Hyoshiro.

At planning meetings, we continued todiscuss store development concepts,floor layouts, product lineups, andother matters with customers.

Age 39 andbelow
36%

71%

FY2009FY2011FY2013

FY2015FY201713

INCLUSION

Retailing

Inclusion Championed by MARUI GROUP

02

Introduction of Hakata Marui Successes
at Existing Stores
Planning meetings with customers have since been conducted at five stores, enabling us to discover that demand forfood vendors in entrance areas was not region-specific but was rather shared by all stores. MARUI GROUP thus undertook renovations at the five stores to position food vendors in entrance areas. As a result of these efforts, transactions
and purchase numbers at these stores showed year-on-year increases of 25% and 30%, respectively, in October 2017.
Customer Input
If entrance areas contain high-ticket items, cosmetics, andaccessories, only certain people will use the store andothers will find it difficult to visit.

MARUI GROUP’s Response
Food vendors are being positioned in entrance areas so thatthey can be enjoyed by all customers, making the stores
more inviting to customers of all ages and genders.

Report on Planning Meeting with Customers
An important part of MARUI GROUP’s co-creation store
development approach is to present our ideas for store
design concepts and product lineups to customers inorder to solicit their opinions, discuss any necessary
improvements, and revise these ideas as needed. Thisapproach was adopted at Kitasenju Marui. In this store, weopened a food area known as Kitchen Garden 350 in thesecond floor entrance, adding to the existing food areas on
the first floor and basement floor. This new food areafeatures a total of 11 shops that are new to Marui storesand that primarily use vegetables and other healthy ingredients. A planning meeting was held with customers inNovember 2017, one month after the opening of the newfood floor.

Planning Meeting with Customers

At Kitasenju Marui on November 4, 2017

One month has passed since Kitchen Garden 350 was opened. What are your impressions of thisfood area? In addition to the general theme of “gathering and connecting,” this area was also basedon the concept of consuming 350 grams of vegetables each day, as is recommended by theMinistry of Health, Labour and Welfare.
Sachiko Sakai Sales Representative, Kitasenju MaruiAs Kitchen Garden 350 was made by converting an accessory sales floor to a food area, there is anatmosphere of elegance about this area that sparked my interest the moment I saw it. There are also a
lot of rare delicacies like taco rice and California rolls. I want to have lunch with my friends here.
This area previously comprised mainly shops dealing in brand-name products for women, making
it difficult to approach. Now, my eyes are drawn to what’s inside the stores even as I walk past, andit feels much more inviting. I think with the sandwiches, though, it would be better to allow customers more freedom in choosing combinations.
Taking my kids to eat in one of the restaurants on the upper floors or at the basement food court
and then buying macarons or bread at Kitchen Garden 350 feels very satisfying. It is like a dream.
The vegetable juice is easy to drink even for those who dislike vegetables. I want to drink it withmy kids.
I was struck by how easy Kitchen Garden 350 made it to get my daily vegetables. It would be niceif items were available in a wider range of prices and in smaller sizes so that they can be eaten
even when time is short. Kitchen Garden 350 is a great place to have my husband wait when I go
shopping or to use as a meet-up spot.
My generation uses social media a lot. All of the cute food items available just scream to have their
pictures taken, and all are ripe for Instagram. If Kitchen Garden 350 was open earlier, I could get
takeout before going to work and then eat it for lunch.

The Kitchen Garden 350 food area opened in the second floor entrance is basedon the concept of “gathering and connecting.” This sales area features shops thatsell food items by weight as well as spaces in which customers can eat the items
they purchased in the stores.

Actually, items such as the visually appealing sandwiches and rose-shaped gelato are new creations
made by tenants exclusively for Kitasenju Marui with the aim of drawing in Instagram users. We
hope you will continue to provide us with feedback that can be used to make Kitasenju Marui astore that brings even more joy to customers. Thank you for joining us today.

Message from a Tenant

When touring Kitchen Garden 350, customers tried recommended menu items from all 11 shops and were provided with information on the ingredients used. Customers then graded the food area based on various factors andalso offered opinions on what aspects they were fond of and where improvements were needed.

14Valuing Customer Input and Providing Products That Can’t Be Found Anywhere Else
We opened CHEF’S PRESS, a specialty sandwich shop featuring a menu based on the concept ofhealthy food and drinks, in Kitasenju Marui’s Kitchen Garden 350. Our relationship with MARUIGROUP goes back 16 years. The Company’s commitment to developing stores together withcustomers is one of its most noticeable characteristics. When opening up our shop in Kitasenju
Marui, we were given new tasks: developing a wider range of sizes and establishing a menu that
can attract any customer. We thus took to creating items exclusively for Kitasenju Marui, including
smaller items, colorful and visually pleasing sandwiches aimed at Instagram users, and freshjuices made using locally produced vegetables. The end result was a menu comprising several
products that can’t be found anywhere else.

Jun Tashiro
CHEF’S PRESS, Kitasenju Marui
AntenDo, Machida Marui
Antendo Co., Ltd.

15

INCLUSION

Retailing

Inclusion Championed by MARUI GROUP

03

04

Deployment of a Lineup of Sizes
Matched to Customer Lifestyles

Development of an Environmentthat Can Be Enjoyed by AllMARUI GROUP has come to be aware of how many customers have been forced to give up on having enjoyable shopping
experiences due to an inability to make purchases because of a lack of the ideal product or size. Our first step to address
this issue began with the expansion of the range of sizes for our private brand shoes and apparel products. Today, we areengaged in an even wider range of size-related initiatives together with tenants at our stores.

MARUI GROUP aims to be a frontrunner in providing products, services, and stores that can be enjoyed by all customers,
including senior citizens, differently abled individuals, non-Japanese people, and members of the LGBT community andregardless of age, gender, or physical characteristic. Our efforts to develop stores that are inviting to all people are currently being advanced with an eye to the year of the Tokyo 2020 Olympic and Paralympic Games.

MARUI GROUP’s Response
The range of portions and sizes for food and apparel(clothing) and shoe products is being expanded in light ofimmense customer demand.

Customer Input
Even when there was a product with a design I liked,
I couldn’t buy it because it wasn’t in my size.

Private Brand Initiatives

Initiatives by Tenants

Our Rakuchin Kirei series of shoes covers
the foot sizes of 100% of the feet ofJapanese women, with 16 sizes spanninga range from 19.5 cm to 27.0 cm.

Macrobiotic Light Food Evah no Morirevised its menu to make 95% of its
display lineup available in half sizes or“sample” sizes.

The range of sizes of our Rakuchin Kirei
series of pants was expanded to 12 sizes
spanning from XXS to 7L and encompassing waist sizes from 55 cm to 88 cm.

Lindt Chocolate Boutique began sellingits popular Lindors in a manner thatallows customers to choose from as manyor as few as they want of these chocolates in each of the more than 10 flavors.

Our VISARUNO line consists of readymade and order-made business wear andother clothing, and our Rakuchin Keikailine of shoes comprises 16 sizes ranging
from 22.5 cm to 30.0 cm.

The lineups of casual and dress items at
Extedlab produced by Tetehomme are
now available in six sizes, from S to 4L,
with emphasis placed on the wearer’s
silhouette.

Message from a Tenant

Focus on Size Held by 73% of Customers

73%■ Customers longing for the perfect size Product categories with significant
size-related demand
Food products

68%

Shoes

68%

ApparelSundries
Handbags

64%
29%
26%

Source: Survey of 3,000 people conducted by Macromill, Inc., July 201516

Macrobiotic Light Food Evah noMori has always offered a robust
lineup of boxed meals. Hearing
from MARUI GROUP that somecustomers couldn’t find meals thatmatched their smaller appetites, we
further expanded our lineup toinclude smaller sizes. These smaller Shoko Kobayashi
Macrobiotic Light Foodmeals are also more affordable,
Evah no Mori, Hakata Maruiaddressing customer needs andEvah Dining Inc.
winning much praise from people of
all ages. I am overjoyed that wewere able to take part in co-creation.

Customer Input
Does it cause problems for the store or other customers
when one brings children or strollers or is in awheelchair?

Universal Design Facilities
Seeking to identify thesources of concern forpeople using wheelchairs
when shopping, we invited
such individuals to take partin planning meetings. In terms of actual accessibility, we
have been making stores easier to navigate for customers in wheelchairs by having Mirairo Inc. examine thefacilities when we develop new stores or renovate existing stores. In addition, we utilized pictograms and floor
guides in which black and white images and backgrounds are inverted at Kinshicho Marui to make themeasier to see for customers with weak vision or cataracts.

MARUI GROUP’s Response
We are developing stores that offer comfort and security
in terms of both facilities and customer service.

participate in LGBT pride
events, such as RAINBOWPRIDE and RAINBOW FESTA.
This trend began with Maruiand Modi stores located in
Shinjuku and Shibuya and has since spread to stores in
the Kansai, Hakata, and other areas nationwide. This isjust one facet of our efforts to broadcast our support forand engage in co-creation with the LGBT community. As
another facet, an event designed to support LGBT job
seekers was held at Yurakucho Marui in collaboration withReBit in February 2017. Taking advantage of our Order
Suits and the wide range of sizes we provide, members of
the Yurakucho Marui sales floor staff helped customers
choose the suit that best matched who they were.

Improvement of Customer Service
Employees undergo Service
Care-Fitter training to foster aspirit of hospitality and tolearn how to accommodate
various customers. This
training is conducted in-house by 11 Group employeesthat have acquired official instructor qualifications. In
addition, external lecturers are invited to implement
training for the Universal Manner Placement Examination
program and to perform LGBT manner training. Employees
also receive training on catering to the needs of inboundtravelers performed by non-Japanese lecturers.

Messages from Customers“Marui made the first high-heel shoesI was able to wear. It was a dream come true.”“The first time I opened up about my sexuality to amember of a store’s sales staff was at Marui, and thisindividual helped me try on clothes for an hour.”“I wore my first yukata at Marui. I never thought ayukata could suit me this well.”“I didn’t know that Marui was such an inviting store.
I think this should be advertised more.”

Promotion of an LGBT-Friendly Atmosphere
MARUI GROUP seeks to provide a comfortable shopping
environment for members of the LGBT community andother sexual minorities. As part of these efforts, we17