Topic2. "Kaden Sumairu Kan", a New Type of Stores Offering Total Coordination of a Comfortable Living Space

A Store Offering Proposals on the Entirety of a House

 The home appliance industry in Japan enjoyed favorable sales thanks to the eco-point system starting in 2009 and backed by replacement demand ahead of the shift to digital terrestrial broadcasting in 2011, but the market has been diminishing after hitting a peak with 9 trillion yen sales in 2011. In response to such downward trend in the market and changes in the social environment with declining birthrate and aging population, population decrease, and increasing use of the internet, the Yamada Denki Group has focused on the housing-related businesses since 2011: we acquired SxL Co., Ltd., which is a new house builder, established YamadaWoodHouse Co., Ltd., and strengthened the home renovation business by acquiring Housetec Inc., which is a household equipment manufacturer. Additionally, we commenced the financial services business and real estate business and thereby expanded businesses centered on houses as essential infrastructure. The addition of interior goods, which are closely connected with home appliances, for promoting the business expansion resulted in linking all efforts so far and led to the opening of a new type of stores, "Kaden Sumairu Kan."
 "Kaden Sumairu Kan" is a store in which staff members offer proposals on the entirety of a house, covering from the construction and renovation to interior goods, as well as the financial and real estate services, with home appliances positioned as the core of all services. The stores also have a cafeteria so that female customers and families with children can feel relaxed and enjoy shopping. The Yamada Denki Group has devised various types of stores, such as "LABI LIFE SELECT", with unique sales floors and an enhanced lineup of products. "Kaden Sumairu Kan" is based on a new concept as an extension of such initiatives.

Aiming to be a Store Proposing Enjoyment of Life

 In fiscal 2017, we examined the achievements reached so far and made necessary corrections to confirm that our efforts are being directed in the right way. "Kaden Sumairu Kan" is designed to increase its appeal by combining everything related to housing from the construction and renovation of houses to interior goods. The broad space of each store is divided into sections of a mock living room, kitchen and dining room, bedroom, etc. fashionably coordinated with furniture and interior goods to enable customers to select what they like by directly touching and checking the texture and quality of goods. Thanks to well-coordinated store design, these new stores are steadily increasing sales of interior goods and orders for new houses.
 Through this success, the Yamada Denki Group has come to be able to offer total proposals on interior goods and further on home renovation, not limited to those on home appliances. For example, for a customer who comes to buy a television, it may be possible to suggest that this or that type of sofa or a change of lighting would make watching TV more enjoyable. We would like to create stores that inspire customers to notice what they are not aware of in their everyday lives, such as by presenting kitchens that would make cooking more enjoyable. Our goal is to create stores in which customers can receive useful advice for enriching their everyday lives, not stores where they only come to buy home appliances to replace their broken ones.
 We are increasing "Kaden Sumairu Kan" from 20 stores as of the end of March 2018 and are planning to increase the number of stores to around 100 by the end of fiscal 2018.

Promote Expansion of SPA Interior Goods

 We have developed a system to manufacture SPA interior goods, covering from the planning to manufacturing, and economies of scale will appear when the remodeling of 100 stores into "Kaden Sumairu Kan" is completed. Product development is being promoted so as to enable unified color coordination for each season. Additionally, employees are encouraged to obtain a qualification as a certified interior coordinator who can offer proposals on total room coordination. We aim to increase the number of qualified employees to 1,000 with the expectation that the interior-related business will further develop significantly.
 By increasing the number and ratio of SPA goods among all product lineups, we will also reinforce our logistics network.

Strengthening of the Renovation Promotion System

 The Yamada Denki Group absorbed Nakayama Co., Ltd., with the aim of expanding the home renovation business. Demand for renovation varies by family, depending on the generation, family structure and lifestyle, etc., and the most essential is the personnel who offer proposals rather than the design of products or sales floors. The joining of Nakayama's employees well-versed in home renovation in Yamada Denki Group's stores nationwide is expected to increase business performance significantly, and we hope to be the top home renovator in Japan in three years.
 Under the concept of "a new type of stores offering total coordination of a comfortable living space," all store staff of "Kaden Sumairu Kan" need to be able to respond to inquiries and consultations on all products in the store. We introduced brand new uniforms and staff members are making efforts for self-improvement so that they will be able to make diverse proposals on home appliances, interior goods and home renovation individually.

A Store Completely Different from a Conventional Mass Retailer of Home Appliances

 The Nara Main Store was renewed and reopened on March 16, 2018, as "a new type of store offering total coordination of a comfortable living space." With a silver-based exterior and classical music being played inside, the new store has an image completely different from that of the previous one.
 The atmosphere is calm, with a wood-like floor and warm colored lighting. Before, customers directly headed to the section of home appliances they intended to buy, but they now seem to enjoy looking around the sales floors in which beds and sofas are displayed. The cafeteria at the store entrance is often used as a meeting site or for discussion before deciding what to buy. Some customers only use the cafeteria and the average time spent in the store seems to have increased more than three-fold.
 There still are many points to be improved for increasing recognition that the store also deals with interior goods, or for devising a better means to naturally offer proposals on interior goods or even home renovation to customers who visit the store only for purchasing a certain home appliance, and we have not yet reached the stage of offering total coordination proposals. We are now repeating trials and errors but are aiming to make the store a place where staff members enjoy making proposals and customers also enjoy listening to them.