Products come and go in Japanese convenience stores at a bewildering velocity. One day you pick up a delightful pint of old-fashioned French Style Milk Seeki, and a week later, this new product is gone forever — a total existence so brief that it almost completely fails to enter our collective memories or get tangled in the branches of the Internet. Some new goods are seasonal: cherry blossom-themed snacks, etc. Most are not very good and deserve to disappear quickly. Nonetheless, high-speed, short-term products are now a standard institution of the Japanese retail experience.
Critics have always railed against the commercial system for manufacturing “trends” with the expressed purpose of forcing consumers to buy new baubles and gadgets to keep up with artificially-evolving social norms. But the Japanese snack market is not solely about planned obsolescence: In fact, this kind of production schedule is terribly unprofitable for the manufacturers involved. A successful mass market firm making only one type of candy bar would win huge profit margins in the resulting economies of scale. If producers had perfect control of the market, I doubt they would choose constant product development and short product life-cycles over stability and monotony.
So where did this system come from?
One of the classic Nihonjinron responses has been something like “Japan experiences four distinct seasons, and Japanese people thus desire constantly changing product lines in response to these climatic changes.” This does not make sense, as (1) not all of Japan has four distinct seasons the way that Tokyo does and (2) culture based on the idea of seasonal change would be cyclical and not hyper-progressive. Instead of always wanting a completely new soda every month, the Japanese, according to this logic, should want the same Pear Soda to appear on shelves every October. Some short-lived products do indeed match seasonal patterns, but this does not explain all of them.
By chance, I discovered that the book Can Japan Compete? — by power-nerd HBS prof Michael E. Porter with Hirotaka Takeuchi and Mariko Sakakibara — offers a few clues to the problem at hand. The authors examine the non-international competitiveness of many Japanese business fields. In the chocolate sector, for example, almost none of the brands have any success outside of the Japanese market despite massive domestic production. While the regulations leading to a low cocoa butter content take some of the blame, the authors also point a finger at the convoluted distribution system:
Although the industry began to address product proliferation in 1992, companies still maintain huge product lines. Compare Morinaga, which has 60 brands (after cutting more than 100), with its successful foreign rival Mars. Mars competes in 120 countries with only 40 brands. Japanese manufactures still introduce between 100 and 120 new items every year. One of the drivers of this meaningless product proliferation is Japan’s peculiar distribution channels, which expect each company to introduce a fresh lineup of products almost every month to maintain its shelf space allocation (80).
So according to their explanation, the short supply of shelf space in retail outlets causes pressures for wholesalers to force producers to provide them with new products that will win attention from retailers. Most of the big display areas in convenience stores do tend to be used for new products, and I can understand why wholesalers would not be excited just to throw a Snickers bar in a slot within the candy corner. They make money from slim margins on large sales, and so they demand manufacturers to make new things to catch eyes, win floor space, and move goods — an easy position, seeing that they are not the ones who have to bear the grunt of product development costs.
Consumers are now used to this cavalcade of minorly-altered products. As a friend says, “if you are going to get a snack to eat, it should be fun. And nothing is more fun than a new product.” I can understand that logic. If consumers are happy to have chaotic product options, this system may skillfully appease consumer curiosity, but the ultimate buyers may not be the largest driver of the proliferation speed. That is to say, they are passively accepting the system as is, but not directly pushing companies towards faster and faster unveiling of new products.
Porter et. al also look at apparel, which has a similar manufacture/distribution pattern with chocolate: The major firms make large product lines that change constantly in order to win department store space. The “Onward Way” system of distribution, started by Onward Kashiyama in the 1970s, reduces risk for department stores by selling clothing on consignment (86). This means full returns, no discounting or “50%-off sales,” and department store expectations for constantly changing product. These too would lead to fast pace changes in order to correspond to retailer needs, and consumers would grow accustom to the speed without specifically demanding it.
In terms of dry goods, short-term product success does not seem to have an immediate impact on the next lineup. Whether something sells or not, it disappears. And we hardly know whether something went away a home-run king or a strike-out — especially without seeing the losing team on the Reduced rack. If anything, huge product success would actually slow down the process, as producers would rush in to make more shipments of a hit good and hold back new products for a later date.
Compare this to the culture industry, where low sales are a sign of artistic failure, where ranking charts and box office numbers publicly announce winners and losers, where critics and writers comment upon flops and hits, where artists’ creative freedom and career prospects are determined by current success. When the Japanese music industry lost one-third of its value in five years, trends halted to a stop: new artists aren’t being launched to market and even the new artists with moderate sales look like failures compared to their big brothers and sisters. Here bad business slows down trends.
Product proliferation in foods, however, will probably move on despite market size or consumer tastes, because retail and distribution pressures require a constant flood of new products to secure limited shelf space. Porter recommends that Morinaga and Meiji narrow their product lines according to an actual marketing strategy targeting specific users, but I am not sure anyone is taking that advice. Whether product-line-limiting Western-management becomes widespread or things continue to move at a lightning pace, horde your Glico Caramel Cream — for you never know what tomorrow holds.
(Does it not sound so much cooler to state “the super-techno cyberpunk Shinto Japanese like speed” as a reason for high-paced product proliferation rather than explaining the upstream pressures of distribution and retail organization? I find “distribution” to be one of the most boring words in the English language. 流通 is equally dry in Japanese.)