小売店舗販売員によるイノベーション

― ユナイテッドアローズの共創プロジェクト ―

Abstract

This paper proposes a new value for retail store salespersons in response to the low productivity of the Japanese retail industry compared with that of the United States. The new value is innovation by retail store salespersons. Green Label Relaxing of United Arrows LTD., a Japanese apparel retailer, has launched a co-creation project on the basis of the ideas of store salespersons, who are the lead users inside a company, achieving effective results. First, the background of the introduction of the co-creation project, its outline, and its new products are explained. Next, the factors that enable store salespersons to contribute to innovation and a comparison of the results of the co-creation project with those of ordinary planning and development are explained. Finally, the factors that make the co-creation project successful are summarized in two points. First, by soliciting ideas from the public, salespersons who have high lead userness and can integrate their needs with customer needs can become involved. This high level of lead userness leads to better market results and greater evaluations of ideas. Second, the co-creation project functions effectively because of co-creation with the product development department in the co-creation project and the increase in motivation. This co-creation project leads to a greater evaluation of market outcomes and ideas.

Translated Abstract

米国に比べ日本の小売業の生産性が低いという課題に対し，本稿は小売店舗販売員の新たな価値を提示するものである。それは，小売店舗販売員によるイノベーションという価値である。日本のアパレル小売業であるユナイテッドアローズ社のグリーンレーベルリラクシングでは，企業内リードユーザーである店舗販売員のアイデアを起点に共創プロジェクトを立ち上げ，成果をあげている。まず，共創プロジェクト導入の背景およびその概要，その新製品を説明する。次に，店舗販売員がイノベーションに貢献できる要因と，共創プロジェクトと通常の企画開発との成果の比較を解説する。最後に，共創プロジェクトが成果をあげる要因を2点に整理する。第1に，アイデア公募によって，リードユーザーネスが高く，自身と顧客ニーズを融合できている店舗販売員を巻き込めている点である。このリードユーザーネスの高さが，市場成果やアイデアの評価を高めることにつながっている。第2に，共創プロジェクトでの企画開発部門との共創や，モチベーションの向上が，共創プロジェクトを有効に機能させている点である。この共創プロジェクトが，市場成果やアイデアの評価を高めることにつながっている。

Green Label Relaxing Kameido Clock Store in Japan

Source: Image provided by United Arrows

I.  Introduction

A comparison of employee productivity in the retail industry in Japan and the United States revealed that productivity in Japan is only approximately 30–40% of that in the United States (Takizawa & Miyagawa, 2018). One of the reasons for this is that, compared with the U.S. retail industry, the Japanese retail industry employs more store salespersons and provides more attentive services, but these services are not passed on in price (Fukao et al., 2018).

In this context, there are advanced Japanese companies that views store salespersons as a new source of innovation and are achieving corresponding results. One such company is UNITED ARROWS LTD. with sales of 134.2 billion yen and 301 stores in Japan. United Arrows is one of the advanced apparel retailers in Japan and has been recognized as a company that implements excellent strategies, such as by winning the Porter Prize¹⁾ in 2013.

The company’s core brand, Green Label Relaxing (GLR), has achieved success by creating innovations through “co-creation projects” that involve store salespersons who understand potential customer needs from six months to one step ahead in new product development, in addition to traditional new product development by internal designers (Watanabe, 2022).

This paper provides an overview of a GLR co-creation project to deepen our understanding of innovation by retail store salespersons. First, the background of the introduction of the co-creation project, an overview of the co-creation project, and the new products that emerged from the co-creation project will be explained to deepen the understanding of this case study. Then, the factors that enable store salespersons to contribute to innovation and a comparison of the results of the co-creation project with those of ordinary planning and development are explained. Finally, as a summary of this paper, we organize the factors that make co-creation projects successful and describe the company’s new developments.

II.  Background of the Co-Creation Project Introduction

GLR faced a problem unique to the apparel industry. Apparel products have a short sales period due to rapid changes in seasons and fashions; however, three to six months are needed from planning to release, so simply reflecting current customer product needs, or apparent needs, is not enough. Therefore, designers at apparel manufacturers need to develop products that meet customer needs, or latent needs, half a step to one step ahead.

Because GLR is a manufacturing and retailing company, designers can grasp changes in fashion trends on the basis not only of their design expertise but also of POS data and information provided by their store salespersons, making it easy for them to develop new products that meet latent needs. Although they were able to achieve a certain level of success by doing so, the development manager in GLR felt that there was a limit to capturing the latent needs of customers using only this method.

To overcome this limitation, the development manager started the “Co-Creation Project” in 2018 to develop new products on the basis of the ideas of store salespersons who understand the latent needs of customers. In this context, the development manager was interested in research on employees who innovate, called “lead users inside the company” or “embedded lead users” (Schweisfurth, 2017; Schweisfurth & Herstatt, 2016), as well as a case study of an innovation initiated by store salespersons who can be considered lead users inside the company within the Japanese retailers Xebio and Hello Day (Shimizu, 2019). Lead users inside the company are employees who are both lead users and employees who innovate on the basis of their own usage experience, and their high level of lead userness, such as “ahead of the trend” and “high benefit expectation,” led to innovation (Schweisfurth, 2017). Being “ahead of the trend” is the trait of “identifying a product or solution to a need that is not satisfied by existing products before other users in the target market,” and “high benefit expected” is the trait of “being motivated to innovate because they believe that the solution to their need will bring benefits to them” (von Hippel, 1986). Prior research has suggested that lead users inside the company, who are characterized as “ahead of the trend,” are more likely to originate ideas that capture latent needs, providing the theoretical background for promoting co-creation projects in GLR.

III.  Outline of the Co-Creation Project

At the start of the project, the development manager discussed with the members how to proceed. After modifications through trial and error, the following six steps are currently being implemented (Figure 1).

Figure 1

Flow of the Co-Creation Project

Source: Prepared by the author from company data

1.  Call for ideas

First, in Step 1, a call for new product ideas is issued to approximately 700 store salespersons at all GLR stores, with approximately 40–60 ideas per call. To solicit a large number of ideas, the following four efforts are implemented.

First, the application process is open to all employees, regardless of their company history. Even first-year employees are eligible to apply.

Second, the application format is simple. This is because store salespersons are busy with their normal duties, such as customer service and backroom operations. In addition, many store salespersons are not accustomed to preparing documents, so the format allows them to freely describe only the image of their idea and the reason for it, thereby lowering the hurdle for application.

Third, there are almost no restrictions on ideas. This is because restrictions such as customer preferences or sales and profit targets may cause store salespersons to become caught up in the needs that are already apparent and easily achievable. To collect ideas that take advantage of the store salespersons “ahead of the trend” and with “high benefit expected,” the only requirement is that the store salespersons describe the idea of a product that he or she would like to wear and the timing of its sale (when it will be worn).

Fourth, the co-creation project was designed to be a brand-wide effort. The managers of the product development department and the sales department are actively involved in encouraging store salespersons to apply. Individually, they are also involved in the steady process of encouraging members who are hesitant to apply.

2.  Idea evaluation

In Step 2, the ideas gathered in Step 1 are evaluated. Two to three members from the product development department and the sales department score the ideas in terms of novelty, user value, strategic importance, etc., and narrow them down to approximately 10 to 20 ideas. From these, two or three items are selected for commercialization in the co-creation project, taking into account the balance with the product composition developed in the normal product development process.

3.  Team organization

In Step 3, a co-creation project team is formed with the store salespersons who originated the idea, three to four store salespersons who came up with similar ideas, and three or four members of the product development department. The participation of the store salespersons who came up with similar ideas is intended to make the team composition more amenable for the store salespersons to express their opinions, with the ratio of the number of members equal to that of the product development department. The product development department includes merchandisers, designers, and production staff to facilitate smooth planning and development.

4.  Planning and development

In Step 4, workshops are held once or twice a month for a total of three to four times to determine the materials, design, and specifications for the product (Figure 2). In the workshops, merchandisers in the product development department facilitate the workshops, designers propose materials and specifications for the ideas, and salespersons, who are the originators of the ideas, have the authority to make decisions. Finally, at the workshop, the final samples are checked, the sales quantity, price, and date are determined, and the product is launched.

Figure 2

Step 4 Workshop

Source: Courtesy of United Arrows

To make these workshops function effectively, the following two efforts are made.

First, the opinions of the store salespersons who came up with the ideas are given the highest priority, and the product development department plays a central role in bringing the ideas to fruition. Store salespersons may be aware of customer needs, but their expertise in product development is insufficient, and the product development department assists them with this expertise. However, if the opinions of the product development department are too strong, there is a risk that the characteristics of the idea will be reduced. For example, the product development department may question the feasibility of the store salesperson’s idea or equate it with an idea that has failed in the past, thereby negating an idea for which expertise and experience are advanced.

Second, the team needs to ensure smooth communication opportunities and time. The team creates an atmosphere in which salespersons feel comfortable expressing their opinions positively and provides them with opportunities and time to actively communicate with each other. The number and duration of workshops are limited to secure time for store salespersons who are busy with their regular work. However, the time is used effectively by sharing the items to be discussed in the next workshop in advance and by conducting a preliminary discussion among the store salespersons regarding the contents of the discussion.

5.  Sales promotion

In Step 5, the project team and each specialized department discuss how to market, appeal in stores, and promote the commercialization of the new product. The members who participate in the project will also take the initiative to develop ideas on how to promote the new product. Specifically, styling proposals with the product, recommendations and product explanations for store salespersons to use when selling the product, and their own promotions via SNSs are examples. Figure 3 is a document explaining the product creation process created by the store salespersons of the co-creation project for the understanding of the members of the company.

Figure 3

Step 5 In-house product description materials

Source: Courtesy of United Arrows

6.  Sales

In the final step, Step 6, the sales promotion ideas developed in Step 5 are implemented and marketed. After the product is sold, the team continues to review and discuss improvement measures weekly and remains responsible for the new commercialized product until the end of the sales period.

IV.  New Products Created through the Co-Creation Project

As many as 46 new products have been created as a result of the co-creation project. Below we introduce three representative new products.

The first is a velour T-shirt (Figure 4, left). This product was conceived on the basis of the latent needs of customers for novelty and the needs of the store salespersons themselves for trendy materials. In general, apparel retailers begin offering new autumn products from August to September, but the recent lengthening of the summer season has created a gap between this timeline and customer needs. On the other hand, summer products are on sale beginning in May or June, so the novelty of summer products is lost in August. In response to customer needs for novelty, a T-shirt made of velour, a material often used in fall and winter, was developed. This product was launched in August 2022 and sold well from the first year, and since the number of sales grew further in 2023, it continued in 2024 and was incorporated into the standard product lineup.

Figure 4

Products developed through the co-creation project

Source: Courtesy of United Arrows

The second is a camisole-type dress (Figure 4, middle), which is feminine and does not excessively emphasize the lines of the body. The camisole one-piece was conceived by combining the latent needs of customers, who do not want to hide their body lines but want to show them in good balance, and the needs of the store salespersons themselves, who want a camisole one-piece made of high-quality material. This product also maintains a stable sales volume and continues to be developed while incrementally changing its form.

The third product is a one-piece set with knitwear (Figure 4, right). The one-piece set with knitwear is designed to be layered with a one-piece in advance so that customers can easily wear trendy mesh knitwear. This product responds to the needs of store salespersons for trendy mesh knitwear and the latent needs of customers for layered clothing. This product was on sale from August 2022 and was one of the top-selling products for two months until September.

V.  Factors That Allow Store Salespersons to Contribute to Innovation

What, then, are the factors that allow store salespersons to contribute to the generation of innovation in the co-creation project? We present the results of a qualitative analysis (Watanabe, 2023). The data obtained by interviewing 16 store salespersons who participated in the co-creation project from December 2021 to June 2022 were analyzed via the grounded theory approach (Strauss & Corbin, 1990) and summarized (Table 1).

Table 1

Findings from the interview survey

Source: Watanabe (2023)

First, lead userness is present. The store salespersons in the co-creation project have a high level of fashion involvement, and they are “ahead of the trend” in fashion, actively gathering information on fashion trends. In other words, they are likely to have latent needs. In addition, they are dissatisfied with existing products, are interested in the planning and development process, and have “high benefit expected,” solving their dissatisfaction. In other words, the store salespersons in the co-creation project have high lead userness. This indicates the effectiveness of the recruitment method for the co-creation project.

Second, the integration of their own and customers’ needs is implemented. The store salespersons in the co-creation project are highly aware of customer service, consider information obtained from customers important, and collect information from customer contact points. Furthermore, while understanding the needs of the target customers, they balance their own needs and the needs of the customers and recognize the difference between their own needs and the needs of the customers. The co-creation process enables the creation of high-quality ideas by combining the needs of store salespersons with the latent needs of their customers and by generating ideas for new products.

Third, a co-creation process effect is generated. Co-creation with the product development department is achieved by obtaining support from the product development department in terms of expertise and by conducting communication. In addition, learning from the co-creation project and team collaboration has led to increased motivation among store salespersons. In other words, the co-creation process functions effectively.

VI.  Comparison of Outcomes between Co-Creation Projects and Regular Planning and Development

Do co-creation projects bring about superior innovation compared with ordinary planning and development? The following are the results of a field experiment conducted on all products in GLR during a specific period (Watanabe, 2022). This analysis covers actual sales data for 10 product numbers developed through the co-creation project and 206 product numbers developed by the planning and development staff alone in the normal planning and development process for the summer of 2019, as well as data from idea evaluations by two supervisors. The relationship between the lead userness of the idea originator and the results is also investigated, since it is assumed that there are planning and development workers who can be considered lead users inside the company, rather than simply comparing the two.

As shown in Figure 5 and Table 2, the analysis reveals that high lead userness of the originator of an idea has a significant positive effect on market outcomes such as sales volume and sales amount, as well as on the novelty and strategic importance of the idea. Similarly, new products conceived by store salespersons and developed through the co-creation project with planning and development staff have significantly more positive effects on market outcomes, novelty of ideas, and strategic importance than those developed by planning and development staff alone.

Figure 5

Hypothesized relationships

Prepared by the author based on Watanabe (2022)

Table 2

Product Performance Evaluation

Prepared by the author based on Watanabe (2022)

VII.  Conclusion

This paper proposes a new value for retail salespersons in response to the low productivity of the Japanese retail industry compared with that of the U.S. because of its emphasis on customer service. The value is innovation by store salespersons.

GLR of United Arrows, a Japanese apparel retailer, has launched a co-creation project on the basis of the ideas of store salespersons, who are the lead users inside the company, and has achieved promising results. Two main factors contribute to the success of the co-creation project.

The first factor is that the public solicitation of ideas involves store salespersons who have a high level of lead userness and are able to integrate their own ideas with customer needs. The simple application format and the lack of restrictions on the number of ideas collected have facilitated the participation of these store salespersons. This high level of lead userness leads to better market outcomes and evaluation of ideas.

The second factor is that co-creation with the product development department in the co-creation project and increased motivation make the co-creation process function effectively. Giving importance to the opinion of the idea originator and the environment for communication support the effectiveness of the co-creation process. This co-creation project has led to improved market performance and evaluation of ideas.

United Arrows has begun developing a new brand, ATTISESSION, with store salesperson as the director (United Arrows, 2024). This is a case in which innovation by retail store salespersons is expected.

Many retailers and manufacturers should recognize that store salespersons can be a valuable management resource that contributes to corporate innovation. We hope that this case study will serve as a starting point for many studies and practices related to innovation by retail salespersons.

Acknowledgments

This report was prepared with the cooperation of UNITED ARROWS LTD. We would like to express our gratitude for their cooperation.

This work was supported by JSPS KAKENHI Grant Numbers JP20K01972, JP24K05160.

Notes

1) The Porter Prize was established by Hitotsubashi Business School to recognize companies that have achieved and maintained high profitability in their industries through innovation in products, processes, and management skills, and through the implementation of unique strategies based on this innovation (Porter Prize, 2024).

2) Open coding: textualized interview data were intercepted and label names were assigned based on properties and dimensions. The similar labels were grouped to create categories, and the categories were named and summarized as Category 1.

3) Axial coding: The highly related categories formulated in open coding were grouped, structured, and organized.

4) Selective coding: The relevance between the categories formulated in the axial coding was identified, and the categories were grouped to create an abstract concept.

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Yuya Watanabe

Yuya Watanabe, Ph.D. (Business Administration) is Visiting Researcher at the Research Institute for Innovation Management of Hosei University and General Manager of Women’s Product Department, GLR Division, United Arrows, Ltd. (main duties). His speciality is user innovation and product development theories.

Hidehiko Nishikawa

Hidehiko Nishikawa, Ph.D. (Commerce) graduated from the School of Business Administration, Kobe University in 2004. Currently, he is Professor at Hosei University and working as the co-chair of the User Innovation Lab. His speciality is user innovation and digital marketing.