Co-Creative Businesses

Provision of options emphasizing balance between individuality and connections

Co-Creative Businesses
MARUI GROUP’s co-creative businesses are geared toward transcending dichotomies that cause division,
such as those separating senior citizens, LGBT individuals, and non-Japanese individuals from others; thosedividing races; the dichotomy between current and future generations; and that between short-term profitsand environmental destruction. Our goal in these businesses is to include previously excluded people throughproducts and services as well as through co-creation to contribute to the interests of all parties. By exercising
its core value—the co-creation of creditability—MARUI GROUP will provide options emphasizing balance
between individuality and connections through its co-creative businesses.

Options Emphasizing Balance between Individuality and Connections

Co-creative businesses provide options for members ofmature societies that emphasize individuality while also
valuing connections. In these businesses, a capacity forempathy—the ability of employees to adopt the viewpoints of various stakeholders to understand theirthinking and their pain—is of utmost importance. MARUIGROUP seeks to expand the intersection between the interests (happiness) of six groups of stakeholders, including future generations, and co-creation activities withstakeholders are a vital part of this process. Among thelong-term targets defined below are those pertaining toco-creation activities that contribute to improved corporate value. These targets are emblematic of our commitment to expanding options as part of MARUI GROUP’s
daily co-creation activities, embodiments of the credit
philosophy that “creditability should be built together
with customers,” as options for stakeholders.

Co-creation with customers

MARUI GROUP’se.g., store development, product development,
customer services

Open innovatione.g., business partners, start-up companies

Co-creation with communities
and societye.g., community and regional development

Co-creation with investorse.g., management emphasizing capital costs

Co-creative businesses

MARUI GROUP promises to step up co-creation andopen innovation activities to provide services emphasizing
connections between people by 2050.

Spaces and services that foster connections between
all stakeholders as a platform for societyPeople valuing individuality
People valuing connections

Long-Term Targets
Medium-Term Targets(5 years in the future)

Ultralong-Term Targets(30 years in the future)

Long-Term Targets(10 years in the future)• Co-creation with aggregate total of
100,000 or more customers*• Co-creation with aggregate total of
500,000 or more customers*• Co-creation with aggregate total of
1,000,000 or more customers*•O pen innovation with 100 or morecompanies• Open innovation with 500 or morecompanies• Open innovation with 1,000 or morecompanies• Engagement with 50 or morecommunities• Engagement with 100 or morecommunities•E ngagement with 200 or morecommunities• 50 or more cases of engagement
leading to increased corporate value•1 00 or more cases of engagement
leading to increased corporate value•3 00 or more cases of engagement
leading to increased corporate value* The number of customers that take part in MARUI GROUP’s business process through planning meetings or other venues

24

VISION BOOK 2050

25

Provision of options emphasizing balance between individuality and connections

Co-Creative BusinessesOrigin of Inclusion—Co-Creation with Customers

Co-Creation with Start-up Companies through Open Innovation

The origin of co-creation can be found in the act of valuing both individuality
and connections with others, a sentiment that has been part of MARUI GROUP’s
operations since its founding. Regardless, there was a chapter of our history
during which we were too bound by past successes and too focused on theperspectives and thinking of industry and of the Company itself. To overcome
this management crisis, we chose to return to the point of origin of co-creation.
Forming the new philosophy of “continue evolving to better aid our customers,” we completely revamped our prior, Company-centric store development,
product creation, and credit card operation practices. This undertaking gave
rise to planning meetings with customers, which are forums for incorporating
customers into all business processes and practicing co-creation with them.
Rakuchin Kirei series shoes and EPOS cards were both products of thisco-creation.
A prominent example of co-creation with customers can be seen at Hakata
Marui, which was opened in 2016. Prior to opening this store, we held morethan 600 planning meetings with customers, involving an aggregate total ofover 15,000 people in the process. Input from customers led to a store development process that overturned prior conventions through innovations suchas the introduction of food vendors on entry levels. The view of co-creation
born out of collaboration with customers is the origin of MARUI GROUP’s­co-creative businesses.

Valuing both individuality and connections with others requires expertise
related to IT, AI, and other cutting-edge technologies, areas in which start-up
companies excel. MARUI GROUP seconds its employees to such start-up
companies to nurture perspectives that may lead to the creation of new,­forward-looking businesses and to have them experience various opportunities to make decisions at their own discretion. Employees that have had thisexperience will help us combine different expertise to develop unprecedented
co-creative businesses.
Co-creation evolved to incorporate tenants at
Marui Family Mizonokuchi. At this store, tenants
are provided with explanations on MARUI GROUP’s
approach to co-creation and the goals of Marui
Family Mizonokuchi when it is first decided thatthey will join the store. Moreover, tenants areinvited to planning meetings with customers totake part in discussions so that they can reflect
the needs of customers in their merchandising,
services, and sales floor development.

Co-Creation with Communities and Society
Co-creation with communities and society is made possible by infusing
co‑creation with customers with the perspective of inclusion. We have therefore been participating in RAINBOW PRIDE LGBT pride events, promoting
regional development through collaborative events between popular anime
works and local shopping districts, and engaging in other such activities.
­Furthermore, the AI and IT technologies developed through EPOS card operations have been used to produce the EPOS Pay QR code payment service.
With this service, we are enhancing co-creative businesses that link customer
convenience to community prosperity by expanding the range of stores atwhich this cashless payment service can be used.

As part of its collaboration with BASE, Inc.,
operator of the BASE smartphone shopping application, MARUI GROUP helped open SHIBUYA BASE,
this company’s first full-time physical venue, inShibuya Marui. Leveraging MARUI GROUP’s
physical spaces for connecting with customers
and its sales floor operation and sales know-how,
SHIBUYA BASE provides a venue for customers
to discover new brands and products offering
fresh value.

Co-Creation with Long-Term Investors
Evolution of Co-Creation Store Development Approach
MARUI GROUP reframed the expertise and capacity for empathy it cultivatedat the sites of co-creation pertaining to store development, product creation,and customer service from the perspectives of its wide-ranging stakeholders,
including senior citizens, LGBT individuals, and non-Japanese. This reframingexpanded our focus from the happiness of customers to the happiness ofall stakeholders. We then incorporated social issues into our conventional­co-creation activities from the perspective of inclusion, making it possible
to broaden the reach of our main business. Increases in co-creation with­customers effectively enable us to include previously excluded individuals,
thereby expanding the interests (happiness) of stakeholders.
Meanwhile, the transition to shopping centers and fixed-term rental contracts transformed MARUI GROUP’s stores into real estate-model businesses
that rent space, which is expected to make co-creation with tenants even moresignificant than co-creation with customers.

Rakuchin Kirei series shoes are developed toprovide a perfect fit based on input from customers that have felt discomfort with shoes or are
unable to find the perfect size. With a focus on thebalance between comfort, design, and affordability,
we offer sizes ranging from 19.5 cm to 27.0 cm,
covering 100% of foot sizes, all developed basedon customer input.

VISION BOOK 2050

The EPOS Pay QR code payment service was introduced following the conclusion of affiliate agreements with shopping districts and restaurants
surrounding Nakano Marui, expanding the range ofstores at which small-sum payments can be made,many of which did not p­ reviously accept EPOS cards.
By creating regional economic spheres centered oncustomers, we aim to develop communities that linkregions and customers.

Message from a Co-Creative Business Representative

New Value Created by Generating Happiness through Co-Creative Businesses

Discussions were held with customers for thepurpose of promoting usage among EPOS Gold
cardholders, during which many wondered why wedid not offer a family card. This was the inspiration
for the EPOS Family Gold card, a card forgedthrough repeated hypothesizing and verification
via co-creation with customers to offer a uniqueservice that values both individual independence
and family bonds.

26

Expanding the happiness of stakeholders requires the endorsement of longterm investors. ESG investment and other approaches toward investing in­sustainability are investments in sustainability and thereby provide the option
to move away from focusing on short-term profit to pursue sustainable growthover the medium-to-long term. Given the emphasis currently being placedon ESG investment, MARUI GROUP aims to facilitate the long-term expansionof stakeholder interests (happiness) through constructive dialogue with longterm investors that understand such principles.

Hajime Sasaki
Senior Executive Officer
President andRepresentative Director,
MARUI CO., LTD.

Everyone knows the importance of valuing both their individuality while coexisting with and valuing the happinessof others. In practice, however, we are often forced to compromise one of these values or to choose between
them. At MARUI GROUP, we first faced this issue in our business a decade ago when we began developing shoes
through co-creation with customers. These efforts led us to develop a wide range of shoe sizes to accommodate
all customers, an undertaking that had previously been avoided due to its adverse impact on corporate earnings.
After that, we expanded our co-creation activities to include product creation, store development, and other areasof operations, engaging with countless individuals on various issues through these activities. This process mademe realize that co-creative businesses accommodating all customers brought happiness to large numbers ofpeople by addressing previously neglected social issues while simultaneously creating unprecedented value.
Looking ahead, I hope to expand the scope of our co-creation activities with customers, business partners,­communities, society, and other stakeholders to create even greater value for the future.

VISION BOOK 2050

27