Keyword search
Tag search
Global Japan
DEC 21, 2017

Corporations Struggle to Catch Up to Digitally Savvy Consumers in Japan

By Zsuzsanna Járfás
iStock photo/Urupong

Japanese consumers tend to be early adopters of technological innovations, seeking convenience, efficiency, and connectedness. A purchase needs to be more than a product. It must be a personalized, unique experience. But these same consumers are served by Japan Inc., the Kings of Hardware, who don’t seem to feel the urge to move on to soft solutions. While this perception covers a more nuanced reality, it may explain why digital transformation, of marketing in particular, has been lagging behind the robust demand of tech-savvy consumers.

Marketing, the frontrunner in digital transformation

In line with international trends, marketing – the sector and function closest to the consumers – has been on the front line of digital transformation in Japan as well. Marketing automation and data management platforms have enjoyed brisk sales, and digital marketing departments have been springing up in corporations. It is surprising, then, that a Fujitsu survey found that over half of the companies with top sales performances were still hesitating to digitize their marketing function, some not even planning to do so within the next five years.

Obstacles to transformation

Why are companies reluctant to innovate? Many respondents to the survey showed strong dissatisfaction with the results of implementing digital transformation. This seems to be aimed at IT service providers who help facilitate the transformation.

On the supplier side, a strong proclivity towards the latest advances in technology – not necessarily trends that are best for the customer – is leading product-driven development. Consultative collaboration with the customer is lacking or insufficient, and thus user needs are not incorporated into services. On top of this is weak project management – projects left open-ended, with no KPIs, milestones, ROI requirements. There is also little or no integration of in-house teams and external consultants.

Survey data also tells a story of customer-side disengagement. Nearly half of the respondents foresee little or no change to come from the digital revolution in the next 3 to 5 years. In fact, many customers take digitization into their own hands, doing online research into the products they wish to buy, resulting in them understanding more about a product than sales vendors.

Bottom Line: Impatient customers may look to new entrants

Technology-biased innovation or belated adaptation of innovation leaves the landscape open for new entrants who focus on customers, rigorous execution methods, and speed. Design thinking is one method that puts customers front and center from the planning phase, further engaging them through an iterative consultative design process. Corporations that fail to embrace such new forms of development will find themselves bogged down in legacy operations, hoping more palatable methods for change will eventually come along. Their customers may not be as patient.