Microsoft Customer SolutionCustomer Solution Case Study

Retailer Enhances Online Product Promotions, Boosts Multichannel Sales

OverviewCountry or Region: JapanIndustry: Consumer goods manufacturing

Customer ProfileRyohin Keikaku manufactures and sells diverse products worldwide under its Muji brand. In addition to its online store, it has nearly 360 retail stores in Japan and 124 stores around the world.

Business SituationTo support a dynamic, multichannel approach to sales, the company needed to create a more responsive and personalized shopping experience for visitors to its e-commerce website.

SolutionRyohin Keikaku deployed FAST ImPulse and FAST Recommendations to take advantage of simplified content management, powerful search functionality, and product recommendation capabilities.

Benefits Hastens special offer creation Enables more targeted search Supports sales growth

“By reducing the amount of time needed to promote products, we’re positioned to aggressively boost online sales, as well as the number of customers who visit our physical stores.”

Masaaki Hirata, Shop Operations Section Manager, Web Business Unit, Ryohin Keikaku

Tokyo, Japan–based Ryohin Keikaku has built a chain of 360 retail stores in Japan and 124 additional stores worldwide around its Muji brand, which includes products ranging from clothing to household goods. Looking to simplify content management and enhance search performance, the company recently reconfigured the infrastructure that supports its online store. By implementing FAST ImPulse and FAST Recommendations, Ryohin Keikaku has reduced the time required to develop and publish special offers for its online store by one-third. The company now uses the time it saves on creating these offers to focus on strategic efforts, such as strengthening connections between its online and retails sales channels. And the company is using the ability to deliver a more personalized and responsive search experience to promote higher online purchase rates and increase traffic to its local stores.

SituationRyohin Keikaku is a highly diversified conglomerate that manages the production of household goods, apparel, and food products. Based in Tokyo, Japan, the company operates in markets worldwide, including the United Kingdom, China, and the United States.

The company sells its products under the “Muji” label through a network of 360 retail stores in Japan and 124 additional stores around the world, as well as through its online store. The name Muji, which means “no brand” in Japanese, is intended to convey openness and simple elegance. The company’s products—from clothing and accessories to furniture collections—all reflect the Muji signature balance between quality and everyday practicality.

Over the last decade, Ryohin Keikaku has relied increasingly on the Muji website, not only as an e-commerce platform, but also as integral component of the company’s global, multichannel sales strategy. For example, executives recognize that many customers use the website to conduct product research, confirm availabilities, and learn about special offers before traveling to a local Muji retail store to make purchases.

Consequently, the company has attempted to fully integrate its web and retail commerce channels to provide customers with a highly connected and unified shopping experience. “Our online store and our physical stores complement each other, so when we publish content to the website that customers find helpful, it has a direct impact on bringing customers into the stores,” says Masaaki Hirata, Shop

Operations Section Manager of the Web Business Unit at Ryohin Keikaku. In some cases, the company has experienced significant increases in retail sales based on product displays and promotions featured exclusively on the web. For example, the company recently created an interactive demonstration of several different scenarios for its lighting fixtures. “By putting the display on our website, we reached more people in a more cost-effective way, and we had more flexibility to showcase the versatility of the products,” says Hirata. “That particular display feature helped boost online sales by 30 percent, and it led to an increase in sales exceeding our expectations at our local stores.”

The company faced the challenge of rapidly creating and managing special offers and other content for its website. In developing new promotions, planners sent instructions to production staff detailing the copy and design changes that needed to be made. Production staff would then manually edit content and publish changes to the relevant pages throughout the site. “Of course, the manual processes involved in creating and uploading content and then reviewing it for accuracy required a lot of time,” says Kota Kazama, a manager in the Web Business Unit at Ryohin Keikaku.

Staff then followed a similar set of manual procedures to remove content when promotions expired. “If a staff member entered the wrong pricing information and published it to the public-facing site, or failed to remove promotional details after a campaign had completed, it could create a lot of confusion and extra administrative work,” says Ayumu Takeda, a web producer in the Web Business Unit at Ryohin Keikaku.

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Figure 1—Ryohin Keikaku,which manages the Mujibrand, sells an expansive arrayof products in marketsworldwide throughits e-commerce and retailstores.

Ryohin Keikaku also needed to link content development and operational workflows to ensure that efforts to promote certain products synchronized with physical inventory. In addition, executives were eager to provide an enhanced online shopping experience. Specifically, they wanted to improve the site’s responsiveness and deliver more powerful search capabilities to help customers navigate with greater ease and find product information more quickly. To accommodate the international growth of the Muji brand and build on the strategy of creating a unified experience across web and retail channels, the company looked for a way to enhance its e-commerce infrastructure.

SolutionAs Ryohin Keikaku evaluated software solutions to improve its e-commerce capabilities, it considered a number of options. Executives ultimately chose to implement FAST ImPulse and FAST Recommendations. This combined solution gives the organization a rich set of tools for delivering a more personalized online shopping experience to strengthen customer loyalty and boost sales. “We chose the FAST platform because of its powerful search functionality, the support it gives to the dynamic e-commerce capabilities we want for our solution, and the high marks it receives for its navigation and product recommendation functions,” says Hirata. The company teamed with EXA Corporation to implement the solution.

Internal Management of Search Functionality

Ryohin Keikaku was able to reconfigure its e-commerce infrastructure to take advantage of the solution’s powerful search engine. Instead of relying on an external search service to handle customer queries on its site, the company can configure the solution to provide a more dynamic and personalized search experience. Now, the company can actively engage customers by delivering results that align with each online shopper’s browsing and search history. Streamlined Content ManagementThe company uses FAST ImPulse to reduce the need for manual workflows to publish and edit content. Now, efforts are better synchronized across various roles. After promotion managers enter the necessary details for each special offer, that information is routed to the proper organizational authority for approval. When the promotion is approved, production staffers are automatically notified that they can enter the required settings for the page layout and design. They simply need to follow a link in the notification email message. Once the design settings are approved, the new site page is automatically generated from a master data source and staged for final review and publication.

The company can also set up promotions in advance and schedule them to begin on days when no one is in the office. “With FAST ImPulse, we can centralize production and manage content development in a much more holistic and efficient way,” says Takashi Yamagiwa, Systems Section Manager of the Web Business Unit at Ryohin Keikaku.

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Figure 2—Ryohin Keikakuuses FAST ImPulse and FASTRecommendations to improvethe online shoppingexperiencefor its flagship Muji brand.

“With FAST ImPulse, we can centralize production and manage content development in a much more holistic and efficient way.”

Takashi Yamagiwa, Systems Section Manager,

Web Business Unit, Ryohin Keikaku

In

addition, the company takes advantage of the solution’s intuitive editing and workflow tools to extend content-management responsibilities to more people in the organization. This means that the company can provide opportunities to retail store managers, who have a deep understanding of day-to-day business operations, and apply their knowledge and experience to creating engaging content for the e-commerce site.

Future Initiatives Ryohin Keikaku plans to use the FAST platform to strengthen its one-to-one marketing capabilities. IT leaders are evaluating the possibility of linking the company’s messaging infrastructure to FAST Recommendations. This would enable automated delivery of email messages that contain customized offers based on a shopper’s browsing and purchase history. The company is also considering using web-based coupons designed to encourage customers to order online and pick up their purchases in the local stores of their choice to receive a discount, which would help to increase traffic at local stores.

BenefitsBy deploying FAST ImPulse and FAST Recommendations, Ryohin Keikaku can now develop promotions for its e-commerce business in one-third of the time it took previously, while ensuring greater accuracy in managing online content. Through enhanced web promotions, faster and more targeted online search, and the ability to cost-effectively scale and customize the solution to meet changing needs, Ryohin Keikaku also expects to increase sales revenue over the next year.

Reduces Time to Create Special Offers by One-Third “The number of hours to create each promotion has been reduced to one-third of what it took before,” says Kazama. “Because the risk of making data entry errors is much lower, we can be much more aggressive in the placement of promotions

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Figure 3—Delivering productpromotions in amore agile way on itswebsite has helpedRyohin Keikaku boost crosschannel sales.

on our site. Now, we don’t hesitate about putting sale prices and special offers right on our home page because we’re so confident in the accuracy of the information, which means the promotions reach more people and drive more transactions.”

Enhances Search Functionality Ryohin Keikaku has found that by employing powerful search and navigation functions on its e-commerce site, customers view approximately 30 percent fewer pages before making a purchase. Based on the combination of improved search and recommendation capabilities, visitors to the company’s website are finding the information they want more quickly than before. “We’re finding that the fewer pages people have to navigate to locate what they need, the more likely they are to make a purchase,” says Kazama. Tightens Connection Between Online and Retail Channels to Boost SalesBy simplifying content management, FAST ImPulse enables Ryohin Keikaku to focus on more tightly connecting its online and retail stores. “By reducing the amount of time needed to promote products, we’re positioned to aggressively boost online sales, as well as the number of customers who visit our physical stores,” says Hirata. “We are already beginning to observe expected increases in our actual sales numbers, and we anticipate sales growth this year to surpass that of last year.”

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For More InformationFor more information about Microsoft products and services, call the Microsoft Sales Information Center at (800) 426-9400. In Canada, call the Microsoft Canada Information Centre at (877) 568-2495. Customers in the United States and Canada who are deaf or hard-of-hearing can reach Microsoft text telephone (TTY/TDD) services at (800) 892-5234. Outside the 50 United States and Canada, please contact your local Microsoft subsidiary. To access information using the World Wide Web, go to:www.microsoft.com

For more information about EXA Corporation products and services, visit the website at: www.exa-corp.co.jp

For more information about Ryohin Keikaku products and services, visit the website at: http://ryohin-keikaku.jp/eng

This case study is for informational purposes only. MICROSOFT MAKES NO WARRANTIES, EXPRESS OR IMPLIED, IN THIS SUMMARY.

Document published June 2011

Software and Services FAST Platform− FAST ImPulse− FAST Recommendations

Partners EXA Corporation