Game On: Maximizing multi-channel retail potential in Tokyo

Anticipating and fulfilling consumer preferences isn’t always a clear-cut business for foreign retailers entering the Japanese market. There’s strong demand for the novel and the high-tech, yes – but shoppers also gravitate towards what’s familiar, reserving their trust for tried-and-tested brands, products, and experiences.

Historically an unwaveringly cash-based economy, the popularity of cashless payments has accelerated sharply in Japan, driven by pandemic-fuelled changes in consumer behavior. Cashless transactions accounted for 36% of all consumer payments in 2022, compared with 15% a decade earlier. This shift comes hand-in-hand with a growing preference for ecommerce, as customers form new habits driven by a preference for choice and convenience. 

But Japanese consumers still see physical store visits as a central and enjoyable part of the shopping experience. 

“Shoppers take the fitting and sizing of products seriously,” says Ryosuke Matsuo, Store Leader of On Tokyo. “The in-store experience is essential to the decision-making process.” 

Consumer demand to switch seamlessly across online and offline channels is also on the rise, having increased by 36% in the last year alone, according to the Japan Retail Report 2023. To strike the perfect balance between convenience and experience, On needed to find an online and in-store payments solution that could unite their systems and keep back-office processes streamlined – all while being flexible enough to adapt to customers’ evolving preferences.

“We needed innovation to grow, and a partner that supported digitisation” says Matsuo.

High-performance, high-quality products are at the core of On’s offering, regardless of what channel a shopper is using. With Adyen’s Unified Commerce solution, On was able to fully integrate their online and offline channels via one platform, delivering a forward-thinking customer journey unique to Japan.

On launched their first Asia-Pacific flagship store in Tokyo in 2022 with Adyen’s suite of in-person payments, introducing checkout-less payments to complement the modern, streamlined aesthetic of the store. 

“Adyen worked with On more closely to learn about our business and ensure that the Adyen system works with On,” says Matsuo. “We didn’t see this with Adyen’s competitors.”

On Tokyo is designed to create an enriching customer experience, taking shoppers on a personalized, multifaceted journey that blurs sales channels and champions innovation with an edge.

Integrating in-store with online payments gives On end-to-end control of transactions across channels in a single platform, key for a brand focused on maximizing performance. 

“It was an easy decision to make because of how simple the Adyen system is, and the service they provide is very adaptive and helpful,” says Matuso. “It’s really the complete package, the complete system.”

While many competitors are trying to deliver this experience, Matusuo says, many are navigating patchwork systems, outdated technology, and slower operations – all of which create friction in the customer experience.

Providing a range of payment methods was also crucial for On to ensure their customers can pay the way they want.

“Some customers prefer various payment methods, such as cash on delivery,” says Matsuo. “Introducing new payment methods to meet these different preferences was very important to us.”

Adyen’s unified platform powers all online and in-person payments for On Tokyo, empowering On to enhance the customer experience, streamline operations, and make data-driven decisions for maximum growth.

With a single overview of transactions, On can consolidate all reporting and invoicing of the various card schemes and payment methods across their e-commerce and physical stores to a single report. Reconciliation is now an easier, more straightforward process. 

Since running on Adyen local acquiring for their Japan e-commerce site, authorization rates have gone up over 7%. 

Meanwhile, inside their flagship store, On can easily curate their layout and customer journey thanks to their new cashless setup, facilitating more meaningful one-to-one customer service moments.

“The solution enables us to eliminate cash, eliminate cash registers, so now any sales personnel can check people out – there’s a lot more flexibility to the store structure,” says Matsuo.

“Customers are not really used to this kind of store experience, they’re comparing it to an Apple store, it’s a great surprise.”