As bookstores struggle to survive across the country, a Tokyo-based IT firm has decided to go against the stream by entering the sector.
For Freee, an IT firm that provides cloud-based applications to manage back-office tasks, opening Tomei Shoten (transparent bookstore) in Tokyo’s Taito Ward last week marked an opportunity to experiment with an unconventional business strategy of disclosing real-time sales while also learning more about running a small-scale business.
Due to the rise of e-books and online shopping, the number of bookstores in Japan has been falling for the past decade or so. There were 11,495 such outlets as of March, down 30% from 16,371 in the same month in 2013, according to the Japan Publishing Organization for Information Infrastructure Development.
However, in countries like the United States and the United Kingdom, small, independent bookstores have experienced a resurgence, prompting Freee to go ahead with the plan despite the potential risks.
“They offer a different experience from the big bookstores by offering a unique selection of books,” said Yu Okada, who is Freee’s brand manager and in charge of running the new bookshop.
Although Freee's main objective is to help small business operators with troublesome back-office tasks, Freee itself, which was founded in 2012, has grown into a major listed firm with about 1,000 employees.
"We needed an environment where we can actually experience the business practice (of small businesses) to understand how they operate as well as how they feel, so that we can reflect it in our products," Okada said.
The 71.5 square-meter store has around 3,000 books — 2,000 of which are themed around small businesses, with the remaining titles sourced from small publishers and self-published authors.
Since Freee is an IT company that is accustomed to doing business without an inventory, it will be a challenge to manage the large number of products while trying to make the operation profitable.
But Okada says this new endeavor will help Freee improve their services.
“By doing something completely different, which Freee is not familiar with, we can acquire a better understanding of our users,” Okada said.
The firm also wants to see how new technologies like ChatGPT can be incorporated into publishing, where business practices can remain rather old-fashioned.
Freee has incorporated ChatGPT into their own jellyfish-like AI character, which is displayed on a big screen located right by the entrance to the store.
The firm said that the character will be acting as a "deputy manager" of the store to take questions and interact with customers through chats.
With its transparency concept, the AI jellyfish will offer a visual representation of sales data through its condition. If sales are exceeding targets, it will appear lively, but it will look depressed if sales are sluggish.
“One of our concepts is to use the transparent bookstore as a sort of technology testing ground for Freee's future products, and to incorporate technology into our products,” said Keiichi Kisamori, Freee’s AI product manager.
As AI is expected to advance further, Freee hopes to create an application that can play the role of chief financial officer for companies.
“From the time when we founded Freee, we have been saying that something like an AI CFO that will support small businesses can be created (in the future),” Kisamori said.
“I think the emergence of ChatGPT is a significant leap to realize this and we want to actually produce it here.”
Staff writer Kazuaki Nagata contributed to this report.
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