Japan

Customer Experience Excellence report 2021

Customer Experience Excellence report 2021

Corporate social responsibility (CSR) is more important than ever to Japanese customers, driving a rise in the Empathy and Integrity pillars in this year’s research. Many traditional Japanese corporations have renewed their brand vision and strategy as a part of their effort to modernize. Social impact is a major consideration when rebranding, and customers have started seeing this online and in external media, as well as experiencing this directly as companies undertake concrete efforts to trade with conscience.

Other trends include digital disruption, which has driven Personalization to the forefront of customer demands. One example is the shift to electronic money like Suica, PayPay, and Rakuten Pay. Until now, cash was preferred by some demographics, such as the elderly, to prevent unnecessary spending. Also, those using electronic payments could obtain digital points which could be used as the equivalent of money and special coupons or discount offering.  Indeed, “value for money” is the most often quoted reason for a brand’s high rating. There is a single word in Japan that means value for money – “Cospa”, from the English words for “cost” and “performance”. It comes up a lot from respondents.

Entertainment and leisure is a major industry for Japan. While most markets have seen the sector take a huge hit over the past year, Japan’s entertainment and leisure sector has ranked the highest for customer experience for two years in a row. And seeing as many entertainment venues have been closed to the public due to COVID-19, it’s an impressive feat for the sector to have thrived.

The dominance of the entertainment and leisure sector is driven primarily by Tokyo Disney Resorts and Universal Studios Japan. Tokyo Disney Resorts came in top of the rankings for customer experience this year, with Universal Studios Japan coming in fourth. Over the course of the year, where numbers were restricted in both resorts, each attempted to raise its profile through exclusivity.

Like most of the world, Japanese customers have been travelling less both domestically and internationally, freeing up expendable income to be spent on entertainment experiences. Aside from the two big physical offerings, Japan has a diverse range of digital content brands which have become more affordable for customers who are spending more time at home consuming content.

Further proving that the Japanese market has increased its domestic spending habits in the aftermath of COVID-19 is second and third place in the rankings – Daimaru Department Store and OK Supermarket. Having been in various states of lockdown over the past year, many Japanese customers have shown loyalty to brands with investment in personal, local experiences driven by empathy. Daimaru has its high ranking this year thanks to a renewed focus on the health, safety and security of its customers, and its attentiveness to customer needs. One customer said that “The customer service is more attentive than it was pre-COVID-19, and the infection control is very good.”

Daimaru has also attempted to increase their physical store’s unique “experience value” for customers. In their flagship store, Daimaru sought to merge tradition and innovation and reflect this across the store space and their operations, utilizing the traditional beauty of existing Vories architecture and merging this with modern design principles1.

OK Supermarket is a new entry this year. It scores high for Personalization, which is unique for a discount supermarket. Of course, respondents ranked OK Supermarket high for value as well as Personalization – customers are pleasantly surprised by the focus on excellence customer service.

As the market matures beyond the challenges of COVID-19, it remains uncertain. Limited travel continues to impact some areas which rely on imports and tourism, meaning businesses must adapt to this new normal if they hope to survive. One travel agency, for example, is now offering online, virtual tours of key tourist attractions to keep people visiting even when they can’t be there in person. It is this kind of willingness to innovate that drives success.

Experience is key for today’s customers, and demands may only grow as customers evolve. A challenge for businesses across Japan is to keep pace with the needs of their customers and constantly meet the challenging demands to provide unforgettable experiences.

We have been observing a shift from product to experience in the Japan market over the past 10 years. Even so, because of the lack of economic growth in Japan, consumers have prioritized value for money. Consumers are now placing more priority on a company’s corporate social responsibility in the wake of COVID-19. To continue improving Personalization one of the biggest challenges is utilizing big data. Brands need to understand how to use this big data to develop new businesses and strengthen their value offering to the customer. Several companies are trying to enter the data services market and are building relationships and partnerships with data holders like the telecom companies and retailers, so the shift is beginning.

Hiroaki Ijima, Partner
Yu Yoneta, Director
KPMG in Japan

  

Leading CX brands in Japan

ANA

airplane

Apple store

tag

Daimaru

tag

JAL

airplane

Leading video streaming platform

call

Netflix

call

OK supermarket

cart

Starbucks

dinner

Tokyo Disney Resort

call

USJ

tag

*Brands are listed in alphabetical order

1 https://www.j-front-retailing.com/english/ir/strategic_policy/rebuilding_shinsaibashi.php