Omron and Watts to Advance In-Store Merchandising Sophistication, Aiming for Sales Improvement Through Product Assortment Optimization Using Data

Watts Co., Ltd. (Headquarters: Osaka City, President and CEO: Fumio Hiraoka, hereinafter referred to as Watts) and Omron Corporation (Headquarters: Kyoto City, Shimogyo-ku, President and CEO: Shunta Tsuji, hereinafter referred to as Omron) have jointly commenced an initiative to advance in-store merchandising within chain stores.

This initiative aims to maximize sales opportunities and improve sales by classifying stores into multiple types based on differences in location, scale, and customer demographics, and then implementing product assortments and merchandising strategies tailored to each type's characteristics.

Background and Objectives In recent years, the retail industry has faced difficulties in tailoring merchandising and product assortments to the specific conditions of each store due to labor shortages and an increasing number of stores. Consequently, there's a challenge of not fully capitalizing on potential sales opportunities, thus not maximizing sales. Furthermore, some stores cannot acquire detailed sales data for each sales floor, and these constraints make it difficult to advance data-driven optimization of product assortments and ordering, leading to frequent stockouts and excess inventory. This initiative aims to address these challenges by leveraging the data analysis expertise of JMDC Inc., an Omron group company, to understand the characteristics and sales trends of each store, and based on these results, optimize data-driven store operations by designing product assortments and operational rules.

Initiative Details This initiative aims to establish a system that allows for the continuous implementation of measures leading to sales expansion, even in environments where sales data acquisition is limited.

- Through data analysis, stores are categorized into types based on characteristics such as location and customer demographics, organizing representative patterns like stores near residential areas or those frequently used for commuting/school.

- For each store type, guidelines for product assortments that lead to sales expansion are established. Product assortments and operational rules are organized and continuously reviewed without relying on detailed sales data. This will enable merchandising that leverages the sales characteristics of each store, even in sales floors with constraints on sales data acquisition, aiming for sales improvement.

Roles of Each Company Watts Co., Ltd. - Provide business knowledge related to in-store merchandising and product assortment. - Provide practical categorization based on store types and concretize product assortment and operational rules. - Implement and verify at the store level and improve from a sales perspective.

Omron Corporation - Design analytical methods applicable even in environments with limited sales data and design store type classification logic. - Design product assortments and operational rules that lead to sales expansion, and support the creation of replicable operational methods at the store level. - Support operational design with a view to continuous improvement and company-wide deployment.

Future Outlook This initiative serves as a concrete implementation case for optimizing store operations through data utilization in the retail industry. Moving forward, both companies will further promote the sophistication of product assortments and merchandising based on the data and insights gained through this initiative, while also considering the potential for expansion to other store types and formats.

Company Information ＜About Watts Co., Ltd.＞ Watts Co., Ltd. is a company headquartered in Chuo-ku, Osaka City, Osaka Prefecture, operating 100-yen shops "Watts," "meets.," "Silk," and "Flets," fashion accessory stores "BuonaVita" and "Tokino:ne," and discount stores "Real" nationwide. Their corporate slogan is "Always a smile, Watts."

＜About Omron Corporation＞ Omron Corporation is a leading company in automation centered on its proprietary "Sensing & Control + Think" technology, developing businesses in control equipment, healthcare, social systems, electronic components, and data solutions utilizing the diverse data acquired through these businesses. Founded in 1933, Omron currently has approximately 27,000 employees worldwide and provides products and services in over 130 countries, contributing to the creation of a better society. For more details, please visit https://www.omron.com/jp/ja/.

＜Related Links＞ Mid-term Roadmap SF 2nd Stage https://www.omron.com/jp/ja/vision/sf2ndstage/ Omron Smart M&S Business Division https://datasolutions.omron.com/jp/ja/business/sms/ Watts Co., Ltd. https://www.watts-jp.com/ Watts Homepage https://www.watts-jp.com/

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