VALUE CREATION

JFR’s Intangibles

Forefront of Digital Strategy

Forefront of Digital Strategy

HAYASHI Naotaka
Managing Executive Officer
Senior Executive General Manager,
Group Digital Unit

In the Web 3.0 Era,
Make Retail a
New Experience
Enterprise
Ten years ago, in 2012, when I worked in
the Management Planning Division ofParco, the management raised an issue.
Parco had been good at communicating
information to customers through mass
media and it had been Parco’s strong
area. However, was the way tocommunicate with customers changing?
Immediately we formed a project team26

INTEGRATED REPORT 2022of young employees and discussed. A
key phrase for such discussion was“smartphone penetration.”
As everyone uses a smartphone andconnects to the Internet anywhere andanytime for 24 hours a day, we needed tobe highly aware of designing the methodof communicating with customers
through smartphones.
Like responding to this change,
particularly the retail industry including

serve these functions. Therefore, weneeded to address online services
directly to communicate with customers
and provide them with shopping
experiences and services. I think these
two years were very challenging for boththe Department Store and Parco.
I feel the underlying thinking ofresponding to the post-digital era orusing digital technologies in response to
the era of living with COVID-19 are
actually common to Parco and theDepartment Store. In addition to thedesire of employees and suppliers instores, and in Parco stores, sales staff oftenants to provide their products andservices to customers, their customer
service skills should be expanded alsousing digital technologies. People arepresent in the Group’s value delivery tocustomers ahead of digital technologies.
We will create value available only here
and deliver it to customers. By doing so,customers will welcome us with a smile.
Whether we can provide orcommunicate such situation tocustomers using digital technologies aswell is the basis of the Group’s use ofdigital technologies. And in strategy
terms, it is the Real×Digital Strategy.

Shift to customer
data-driven management

Parco had to be aware of omnichannel
as a new keyword.
COVID-19 made more apparent suchchange in customers, which is importantfor the Group. The physical stores of theDepartment Store and Parco are themain places in which we deliver value toand communicate with customers andcustomers shop. However, when we had
to suspend business due to theCOVID-19 pandemic, they could not

The enhancement of value of the realworld and the advancement of the use ofdigital tools through the implementationof the Real×Digital Strategy will result in
obtaining data on customer behavior. By
accumulating these data on JCDP, aplatform created by updating former
LTS-Hub, we would like to understandand realize the products and services
customers potentially want. Data areused to further enhance the value of thereal world and the quality of value
delivery in real world is improved. The
value is delivered to customers not only
physically but also digitally and returned
as data. I think this circle is the essenceof the Real×Digital Strategy.
Data obtained through the touchpoints of the Department Store, Parco,and JFR Card are centralized on JCDP tounderstand how customers use theservices of the Department Store, Parco,and JFR Card. And by doing so, they canprovide better services to customers. Inaddition, they will be able to find theproducts and services that the customers
who use either services of theDepartment Store or Parco may like andcreate the opportunities for them to use
the services of both. In terms of theuniqueness of the Group, I would like tomore deeply pursue this point.
Both the Department Store andParco have thought what products andservices customers will like, smile, andfeel their lives fulfilling. I believe theGroup will deliver value that pleases
customers more by creating new value
and improving it using data obtained
from customers.
I am sure that this initiative will also
be useful for the Developer Strategy and
the Prime Life Strategy as well as theReal×Digital Strategy. All the threestrategies will be connected by duly
using data obtained through the Real×Digital Strategy and this will become adriving force for each strategy. I think
this is the implementation of customer
data-driven management.

Challenge tothe metaverse field
Currently it is shifting to the Web 3.0 era.
In terms of the environment,
smartphones are becoming increasingly
sophisticated. At some point in the near
future, smart glasses will come out as anext generation device and the blockchain and cloud AI will be used. In fact, itis predicted that one fourth of the world
population will live in the metaverse forone hour a day in 2026.
Daimaru Matsuzakaya Department
Stores opened a store in a virtual market
and Parco opened a virtual museum. The
virtual museum can not only make aphysical exhibition virtual but also expand
it, that is to say, a world different from thereal one can be added to it. I think it is
the time to try many and various services.
I think it is important how we can provide
operating companies with anenvironment for such trials.
Recently, I participated in an event

NFT NYC with people from startups. It
was held around Times Square in NewYork. By holding a smartphone overTimes Square, we could see Japanese
pop culture filling the space. It wascreated using their platform. Both theDepartment Store and Parco are
originally a place that many people visit
to enjoy unusual experiences. However,the creation of physical extraordinary
experiences costs much and it is notsustainable. Holding a smartphone tosee something shown virtually in existing
physical space may be transitional.
When smart glasses prevail, I thinkcustomers will expect the commercial
space of the Department Store andParco to become very interesting.
The future commercial space must
be both physical and virtual. To this end,
I think it is important to address themetaverse field from now. In themetaverse, space is augmented.
Therefore, in a sense, it may be said it isa return to reality. What kind of
enjoyment can we provide not on acomputer or smartphone screen but inspace regardless of physical or virtual?
Providing new experiences to customers
by combining the real world and thevirtual world through people orcommunities. Those that can do thisbest will attract customers. In this sense,
I think the Group has much potential.

The shirt he wears is a limited edition for AKIRA ART OF
WALL, an exhibition held at the opening of Shibuya PARCO
in 2019. Actually, this event was already related to themetaverse.

INTEGRATED REPORT 2022

27