JR East steps off the tracks into new cyberworld

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East Japan Railway Co. is entering cyberspace, with the goal of transforming its train station network into a vast retail operation.

JR East begins operating this afternoon a new e-commerce Web site, where users can purchase a variety of goods — including food, computer software, books, compact discs, car parts and souvenir items — from across the country.

Users can order and pay by credit card via the Internet — standard procedures on a shopping Web site.

However, its added feature — which a railway is in a unique position to offer — is that users can pick up their orders at any of the 206 convenience stores JR East operates at its 140 stations in the Tokyo metropolitan area.

“Train stations can attract a much larger number of customers than convenience stores,” JR East President Masatake Matsuda said.

According to the carrier, about 756,000 passengers daily use JR Shinjuku Station — the busiest station in Japan.

Commuters go through their local station at least twice a day — in the morning and in the evening. Such a huge customer base has an obvious appeal to companies in many other sectors as well.

Matsuda said that about 200 firms have submitted proposals to participate in the virtual shopping mall connected to the railway station network.

Lawson Inc., a major convenience store chain, is taking part in the project as a key partner.

Customers of JR East’s Web-based shopping mall will be able to pick up goods at Lawson shops in the Tokyo metropolitan area before the summer, and the service will eventually be expanded to all Lawson shops throughout Japan, which currently total 7,380, a Lawson spokesman said.

“We are not sure at this stage how much Internet-based commerce will take root, but given the growth in the United States, Japan should go along a similar path,” Matsuda said.

JR East has aggressively increased the number of shops within its stations in recent years, in order to make up for an expected decline in railway travelers caused by a rapidly graying population.

Under its Sunflower Plan, which started in 1997, JR East is trying to increase sales outside the railway sector by setting up a variety of shops in and around train stations. These shops range from convenience stores and book stores to restaurants and fast-food joints.

JR East is currently undertaking 200 projects to build such shops by the end of fiscal 2000. Sales at the new shops are projected to reach 100 billion yen.

In the near future, more space within train stations may be made available for nonrailway businesses, according to Matsuda.

JR East will begin introducing IC cards to replace paper-based tickets and commuter passes in fiscal 2000, which the company says will eventually clear more space at stations by eliminating ticket vending machines and service counters.

Although some observers still question how quickly and to what extent such digital cards will replace traditional tickets and commuter passes, Matsuda seems confident.

“In four or five years, the structure of train stations in terms of space will greatly change,” Matsuda predicted.