Japan invests in service industry, reshaping its legendary hospitality
04/11/2018 23:30
* Self-checkout catches on as labour pool shrinks
* Companies are rethinking service standards
* Some worry Japanese service losing personal touch
* Traditionalists insist customer is always first
By Stanley White
TOKYO, Nov 5 (Reuters) - Japan's capital expenditure boom is
shifting to the services sector, stirring fears that
self-checkout systems and software will take the human touch out
of omotenashi, the country's vaunted commitment to hospitality.
The economic forces at work are undeniable. The working-age
population is forecast to shrink by about a third in the next
half century, and companies simply cannot hire enough workers.
Turning to automation raises productivity and removes a
bottleneck to economic growth - but marks a retreat from a
services-oriented culture where the customer is king.
"The level of omotenashi depends on where you shop, but
regardless, we place a lot of emphasis on face-to-face
interaction," Naoki Kobayashi, 52, a sales manager at a
telecommunications company, said after buying drinks from a
store in northern Tokyo that had no staff. "We also have a
shrinking population, so I can understand why some retailers
have to change."
East Japan Railway Co 9020.T worked with information
technology consultancy Signpost Co 3996.T to set up the store
last month at a train station on a popular commuter line.
For payment, shoppers swipe an RFID card at the entrance and
again when they leave. Cameras powered with AI track which
products they choose.
There are still some bugs: in Kobayashi's case, the system
confused his order with that of his co-worker. The staffless
store is still being tested but could be opened elsewhere in
response to labour shortages, a spokesman from East Japan
Railway said.
Omotenashi helped Japan rank No. 1 last year in customer
satisfaction, according to a World Economic Forum study on
tourism.
Most commonly, it embodies intense personal interaction with
customers, an extreme willingness to respond to even the
slightest request, to speak only the most polite Japanese, and
to bow frequently.
Even workers at supermarkets and budget hotels are trained
to bow, speak in polite tones, and are more attentive than most
of their counterparts abroad.
But Japanese companies now are forced to consider how much
of a personal touch they can afford. The ratio of new jobs to
applicants is already at a four-decade high and is likely to
rise even further.
Japan's working-age population will fall 35 percent to 50.7
million in 2065 from 78.1 million in 2015, the United Nations
says.
Capital expenditure in the services sector, which started to
accelerate in the last quarter of 2016, rose 9.2 percent in the
first half of this year, the fastest increase in almost three
years.
The investment could pay off in Japan, which has the lowest
productivity among Group of Seven countries.
Matsuya Foods Holdings Co 9887.T is remodelling some of
its beef bowl restaurants to self-service. Customers pick up
their food from a counter, pour their own tea and clear their
own trays, meaning less interaction with staff.
Convenience store operator Lawson Inc 2651.T is testing a
system that allows shoppers to scan and pay for goods with their
mobile phones.
At Takashimaya Co's 8233.T Nihonbashi department store in
central Tokyo, veteran concierge Masanori Shikita, 71, scowled
when asked whether omotenashi would lose its human touch.
"Our basic philosophy is we put people first," he said.
"Omotenashi means you remain at the customer's side, and you see
things from the customer's perspective as you show them
hospitality."
To be sure, some elements of the customer-service tradition
are not likely to disappear. Takashimaya's building in
Nihonbashi, constructed in 1933, is designated an important
cultural property and has elaborate, staff-operated elevators.
Yuria Nagamoto, 22, has been working as an elevator operator
for the past three years. Dressed in a dark uniform and pillbox
hat, she announces what items are available before stopping the
elevator at each floor.
"At Takashimaya, customers ask you so many different
questions that I had to study a lot, but it is important to be
able to reply to the customers' needs," she said.
But some companies say machines help them keep the human
touch in omotenashi.
Fast Retailing Co 9983.T has installed self-checkout tills
at 195 stores for its low-cost apparel brand GU. The company
says that customers like the machines, but that it will not cut
staff.
"The new system increases efficiency for store operations
significantly, hence store staff can spend more time with
customers when shopping," a spokeswoman for Fast Retailing said.
"This initiative actually improves our service level."
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Capex in Japan's Services Sector https://reut.rs/2Og6A6A
Japan's Labour Productivity https://reut.rs/2OfsXcr
Global Comparison of Productivity https://reut.rs/2O6ev6H
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(Reporting by Stanley White; Editing by Gerry Doyle)
((stanley.white@thomsonreuters.com; +81 3 6441 1984
twitter.com/stanleywhite1; Reuters Messaging:
stanley.white.reuters.com@reuters.net))