Lessons from 7-Eleven: The Evolution of the Smartstore

It might be the most universal and recognizable store in the world. Walk by street corners and chances are you’ll see a bright green sign with the red and orange “7” aglow, beckoning visitors to stop in for a quick slurpee or donut or lotto ticket. This is the local neighborhood convenience store known as 7-Eleven, a franchise which has now generated over $80 billion and grown to over 50,000 stores around the world.

But this wasn’t always the case. In the late 90s, 7-Eleven in Japan was struggling to find new business and looking for a way to reinvent itself. Ito-Yokado, perhaps the world’s largest retailer with stakes in all 10,000 7-Eleven stores in the country, decided to take advantage of new data made available by advances in information technology.

New machinery such as point-of-sales cash registers allowed them to track data such as time of purchase and customer type, information that would be made available to individual stores only two hours later. With this data, 7-Eleven eventually developed analytical models to predict what items were selling well and what weren’t.

For perishable items, they would combine various products from different suppliers to ensure products would be delivered at its freshest or when they’re most in season. Items that didn’t move well were canned and replaced. Merchandise would be based on time, location and inventory. What’s more, these stores also added electronic services such as the payment of electric and gas bills. Understanding the hassle of the general public in dealing with local banks for transactions, 7-Eleven determined to deliver a smooth online payment strategy at no cost to the customer .

What 7-Eleven accomplished was nothing short of revolutionizing the way people understood “convenience.” The stores had applied information technology in a way that personalized their customer experience. As noted by Hiromi Hosoya & Markus Schaefer, contributors to the article Tokyo Metabolism (from which this post is based): “The convenience stores react so fluidly to consumers’ desires that they become perfectly organized and soothingly clean prosthetic extensions.”

What allowed for this sort of organic, dynamic growth for 7-Eleven Japan? It began in their shift towards investing in specific pieces of technology. Rather than being tied down to inventory or property, 7-Eleven made a commitment to understanding and analyzing the trends of their consumers. They were tied to the pulse of the general public, and as customer preferences evolved so did their services.

A lmost two decades later, 7-Eleven stands as an intriguing case study of how a company used big data and customer analytics to expand their business. Gone are the days of being a one-trick pony. In order to expand and evolve, companies must offer a more well-rounded, personalized experience for their patrons. It is about becoming a business that is familiar with what their shoppers both want and need.

With the wealth of data and the convergence of internet functionalities, companies that are predicting and shaping their customer preferences are getting a leg up in the competition. How are you taking advantage of this new digital age?

Successful companies give people what they are asking for; revolutionary companies give people what they want before they know they want it. And that might be the key difference.

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To learn about key strategies for optimizing the user experience, check out the Three Key Strategies for Consistent Customer Experiences whitepaper. If you have any questions or stories to share regarding this topic, I’d love to hear it. Please leave me a comment below!

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