As Japan’s e-commerce market continues to grow, retail companies are expanding evermore
aggressively into digital. This expansion brings with it a rising demand for leaders who have the skills
to guide companies through digital transformation. What does it take to be a transformational digital
leader? And what traits should hiring companies look for in a candidate? In this article, successful
digital leaders share the key traits that have allowed them to establish their companies on the
e-commerce landscape in Japan.
1. Have a vision
Digital will transform every part of an organization. The
most successful digital leaders will have a clear vision
of what that transformation will look like. “Don’t make
the mistake of considering e-commerce a POS system
or functional tool. As an e-commerce leader, weaving
vision into everything you do is your core responsibility.
If you miss this core idea, you will not succeed,” said a
senior digital leader at a global sports retailer.
According to another digital executive at a consumer
technology company, this means envisioning how
e-commerce fits into the organization’s overall strategy:
“It is important to understand the goals of the
company and to think about how e-commerce can
uniquely contribute,” he said. In other words, there
must be a clear mission and purpose for e-commerce
that goes beyond digital and takes into account every
part of the business.
With a guiding vision, e-commerce becomes much
more than a sales platform. E-commerce sites
showcase the company’s brand and engage
consumers with news on the latest products and
promotions, with media content and marketing
activities, and with interactive campaigns. “Retailers
need to think carefully about the role of e-commerce,”
said the digital leader of a Japanese retailer. Digital
executives should understand how web content can
not only drive sales across channels, but also enhance
brand recognition and increase customer
engagement. If the goal is simply to drive additional
sales, it might be more cost effective to sell through
Amazon or Rakuten. “But if you build your own
e-commerce channel, you can create your own media
platform that shares insights and creates trends – and
this can truly drive the brand.”
2. Influence, educate and collaborate
E-commerce will impact everyone in the organization.
“For e-commerce to be successful you need to have
absolutely everyone on board,” said one senior digital
leader. “Internal strife can be particularly destructive
and wasteful of time and resources - and if you lose
too many allies, your mandate risks shrinking to
irrelevance.” Unfortunately, getting everyone on board
isn’t always easy, particularly at more traditional brick
& mortar companies. “Persuading off-line leaders is
difficult, as they tend to think of e-commerce as a
rival looking to snatch away their sales,” remarked a
digital executive at a Japanese retailer. “At the same
time, off-line are crucial to digital as they have a
unique understanding of our customers. The key is to
help them understand the unique value we can
provide, while demonstrating what’s in it for them”.
Digital leaders must be able to effectively influence
and educate, and ultimately to successfully
collaborate with other key leaders across the
organization. Influencing and educating can often
mean countering misconceptions about e-commerce,
which requires high levels of empathy, political savvy,
and strong communication skills. One digital leader
at a luxury brand overcame resistance to e-commerce
by explaining how analytics would benefit diverse
parts of the organization. “People are so used to focusing on overall revenue numbers rather than the
metrics that are useful for truly understanding
customers. You need to help retail, merchandising,
and marketing divisions appreciate the significance of
clicks, conversion data, traffic behavior and all their
implications.” At another retail company, an
e-commerce leader showed store teams how digital
could boost in-store sales through marketing, offering
store staff incentives to sell inventory online when it
wasn’t available on the shelves.
To enable collaboration across the organization,
digital leaders must also be able to teach others the
basics of e-commerce. This is especially important in
Japan, where digital marketing is a more nascent
concept. “In the US, the concept of marketing is wellestablished
and digital can start on top of that
common understanding,” said one senior digital
leader. “But in Japan, the market itself is premature”.
Current employees might not understand the
importance of analytics, digital advertising and search
engine optimization (SEO). “You have to translate the
language of digital into laymen’s terms,” said a digital
executive at a Japan-based retailer. “When infiltrating
E-commerce into larger organizations I look for the
fast learners with high curiosity levels, and leverage
them as evangelists for getting the word out.”
3. Have traditional business acumen
Technology makes e-commerce possible. But for
digital leaders, traditional business acumen may
trump familiarity with specific technology platforms.
While platforms change quickly and technologies can
be learned, the basics of business remain consistent.
“Having a good understanding of technology is
important. But understanding commerce, where you
make your money, and being able to drill down on
where that money comes from is more important”,
said a senior e-commerce leader at a sports retailer.
“A deep understanding of how the company works
and operates, the customers, the supply chain and
logistics, and the overall business model is key," added an e-commerce executive at a global Japanese
retailer. “Without my prior experience on the
commercial side, I could not have been successful in
my current EC leadership role.” Another digital
executive at a Japanese retailer said, “E-commerce is
not only an Internet business. I spend considerable
time negotiating with suppliers and thinking about
issues such as quality control, labor costs, and supply
efficiencies.” A digital executive at global consumer
technology company commented, “The best
e-commerce leaders are rarely “techies” but more
often smart business people who could be successful
anywhere, whose field happens to be digital.”
4. Be an omni-channel evangelist
Consumer behavior transcends channels. These days
people frequently check prices online before heading
to the store to make a purchase. Others prefer to
examine an item in-store and then go home to
purchase online. According to one senior digital
leader, “Each channel forms a part of the customer
journey,” with another online executive adding, “You
have to apply digitalization not only to sales, but also
to the core components of the value chain such as
supply chain and product development.” To support a
seamless omnichannel experience for consumers,
e-commerce must be fully integrated with retail stores
and other parts of the organization. “We need to
ensure customers have the same great experience
with us however we may be interacting with them,”
said a digital executive at a Japanese retailer. “I call
this “engagement commerce” - engaging people via
digital, then giving them a choice of where to buy. For
this to be possible, brick & mortar have to operate
seamlessly with our online team.”
Retailers are increasingly allowing customers to
purchase online and then pick up in-store. The more savvy retailers ensure store staff are trained to check
online inventory on behalf of customers, and to even
proactively sell inventory that isn’t available on the
shelves. Vice-versa, it is also imperative for online
specialists to have an ongoing and up-to-date
understanding of the physical store environment. “I
tell my teams to visit a different store at least once a
week, to look around, touch the products, watch the
customers, to experience what they are experiencing,”
said one e-commerce general manager. “Are we
providing the same experiences to our customers
online as in our stores? If not, then what do we need
to change?”
One digital executive at a luxury brand commented,
“I see half of my job as being in e-commerce, and the
other half as showing other channels the
opportunities we have for doing things differently.
Opportunities that can only be spotted through our
unique perspective in digital.” This executive added,
“For me, success is defined as when people no longer
see you as e-commerce. They see you as an alignment
leader, or as “omni-channel”.”
5. Cultivate the talent for transformation
Digital leaders must be adept at recruiting and
developing the right talent. But in Japan, this can
often be an uphill battle. According to a digital leader
at a luxury brand, e-commerce for global companies
in Japan requires a rare skill-set. “You need people
who can be diplomatic, navigate the political
landscape, who understand retail – and who are
bilingual. This makes it very hard to find the right
people.” Another senior marketing leader at a
Japanese retailer observed that, because
e-commerce is still relatively new, “the talent pool is
still very small in Japan.” Furthermore, given the
differences between online and more ‘established’
companies, gaps in culture and working style provide
another challenge when it comes to attracting digital
talent into traditional companies. “It is especially
tough to hire in the best and brightest in digital when
you do not have a top-tier brand name such as
Amazon or Google.”
Yet bringing in talent from outside the region also has
its challenges. “In Japan, professionals coming in
from overseas expect a significant raise in making a
move,” said a high-level marketing executive. “Finding
and retaining the right talent has been immensely
difficult…let alone paying for them.” Additionally,
searching for internal talent from other areas of your
organization can also have its own challenges.
“Securing good talent from other channels was really
tough. They perceived us as the enemy and often
refused to cooperate, blaming conflicts of interest
wherever they could”, said a digital executive at a
global consumer electronics company.
6. Be agile
The way we do business is changing and evolving
daily, and much of this shift is being influenced and
pioneered by the world of digital. This requires the
best digital leaders to constantly stay ahead of such
change amidst an increasingly fluid and dynamic
landscape. “Agility is key - the ability to learn and
iterate as you operate your platform, and to notice and
mobilize your team to act on an insight in real time”,
commented a senior leader at a global sports retailer.
Another digital executive who previously worked at a
leading e-tailer said, “Speed is crucial - keeping up
with the action cycle. We would typically receive the
previous day’s business results on our mobile phones
first thing in the morning, and need to have the next
week’s action plan by the time we were in the office. It
was that level of detail day-in and day-out.” Digital
leaders need to develop their teams accordingly,
training them to maintain speed and make decisions,
“without focusing on past guidelines, sticking to the rules, or getting stuck in the small details”, added an
e-commerce leader at a Japanese retailer.
The best leaders need to have a passion for trying out
new ideas and pushing the boundaries while being
willing to take risks and make mistakes. “With digital,
many of the latest technologies are not tried or
tested. If you are risk averse and shy away from new
possibilities, you will be left behind,” said a digital
leader at a mass retailer. Conversely, e-commerce
leaders also need to be open to learning from the
more traditional areas of the business, sometimes
incorporating more traditional ideas into EC. “Our
store managers had been sending hand-written thank
you notes to customers forever,” said one digital
executive at a luxury brand. “We recently tried doing
this for our EC customers, and it has proved to be a
great success.”
7. Know your market
Every market is different. As a global brand in Japan, it
is especially important to know your local consumers
and their habits. A senior digital leader at a consumer
technology company commented, “One aspect
unique to e-commerce in Japan is the popularity of
loyalty points as a marketing tool.” Thus, Apple,
Google and Amazon offer loyalty points in Japan but
not elsewhere. Another e-commerce executive added,
“In Japan, Yahoo is strong whereas in China, Taobao
is the main player - which impacts banner advertising.
In Germany, people prefer PayPal to credit cards,
which affects online purchase behavior. Japanese love
points, whereas Americans prefer cash-back. Social
media ads are highly effective South-east Asia,
whereas not so much in Japan - and so on. You have
to localize your approach heavily according to where
you are.”
Customer expectations also need to be taken into
account. “In the US, same-day delivery is special
whereas in Japan it is simply expected. Japanese also
expect a high level of quality and customer service in
general, which changes the way companies do
business here,” said a digital leader at a luxury brand
in Japan. “Expectations around quality are very
different in Japan. There is a different perception of
scalability in the US and in Japan,” said one senior
marketing executive who has worked in both
countries. “At US headquarters they wanted us to
move towards full automation – but my local team in
Japan wasn’t willing to do so as they worried about
demand spikes and exceptional cases. Japanese
customers are highly detail-oriented and complain
about minor product details - things people in other
countries simply wouldn’t even notice or care about.”
The future of e-commerce in japan and globally
What’s next for e-commerce in Japan and globally? While technologies will continue to evolve, the smartest
companies will continue taking advantage of the strengths of both human talent and digital platforms.
“Successful e-commerce will be a hybrid of humans and systems, where what people are great at – initiative
empathy, intuition, analysis and whim – is given room to improve what systems are great at – scale,
predictability, reliability and data storage,” said one digital leader. Another digital executive at a Japanese retail
company said, “The key for success in EC will be the ability to effectively combine offline and online. The brand
has to evolve into a media platform in its own right, adding value beyond just selling products, and displacing
TV, newspapers and magazines from their traditional territory.”
The most effective e-commerce platforms may be those that do not “push” the consumer towards a purchase
so much as create an engaging online environment that excites people about products and helps them make
informed bespoke purchasing decisions. Zozotown’s WEAR app allows fashionistas to upload items they are
sporting, which readers can view and then purchase on Zozotown’s platform. “The process is all very natural,
and as a result WEAR is beating out mainstream magazines as an information source for young people
interested in fashion,” said one marketing leader.
As digital continues to evolve and disrupt, the demand for executives who are able to harness the power of
e-commerce while making sure the other moving parts of the organization are fully integrated and not left
behind, will continue to rise. Given what it takes to be a transformational digital leader in today’s world,
companies will need to demonstrate increasing resourcefulness, creativity, as well as flexibility and
determination when looking to hire and retain the most impactful digital pioneers for their businesses in Japan.