23/10/2021

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7-Eleven’s 20,000 Japan shops to add delivery services in 2026

Around 3,000 items will be available for delivery when 7-Eleven starts its new service in five years. (Photo by Akikazu Isii)

Nikkei staff writers | Japan

TOKYO — Convenience store operator Seven & i Holdings will launch delivery services across Japan as early as 2026, Nikkei has learned.

The operator expects to be able to deliver food and dairy products to homes in around 30 minutes from its 20,000 7-Eleven stores. It intends to start offering the service in fiscal 2026 and compete with e-commerce giants such as Amazon.com.

The move comes amid a slump in Japan’s convenience store market. According to a Nikkei survey, industrywide sales fell 6.1% to around 11.8 trillion yen in 2020, marking the first decline since 1981.

At the same time, Japan’s e-commerce market grew 22%, to around 12.2 trillion yen, partly thanks to the rise of stay-at-home consumption. E-commerce sales surpassed those of convenience chains for the first time in 2020.

Seven expects deliveries to catalyze growth. The company currently offers delivery services from around 550 stores, in Tokyo, Hokkaido and Hiroshima Prefecture. It will start offering deliveries from almost all of its 21,000 convenience stores across Japan.

By using stores that are close to consumers as delivery bases, Seven will offer “last mile” deliveries in as few as 30 minutes.

“Stores are not only a place to buy products but also a place to store inventory,” President Ryuichi Isaka told Nikkei. “The service can be expanded in a short time without capital investment.”

Consumers can order via a website or an app. Around 3,000 food items and daily products will be available. Every purchase should be worth more than 1,000 yen ($9), with an additional delivery fee of 330 yen. The service will be available until 11 p.m.

Each store is expected to have a delivery radius of about 500 meters, though this might be expanded, depending on demand.

Seven, which will outsource delivery to local providers, has already established partnerships with about 10 logistics companies. It says the quality of such services and the availability of delivery personnel are superior to outsourcing to private deliverymen, as services like Uber Eats do.

Seven has developed an AI-based logistics platform to optimize routes and coordinate among drivers. This enables its partner companies to deliver Seven products with a minimum of cars and drivers while also catering to other customers’ needs.

Expectations are that the delivery service will raise each store’s sales.

Of the stores that currently offer the service, each makes a few deliveries per day. The chain operator intends to raise this to 15 or more by expanding the service nationwide and marketing it so more people know about it.

Rival chain Lawson currently offers deliveries from 2,000 stores across 32 prefectures via Uber Eats. Plans are to raise the number to 3,000 stores by fiscal 2022.

In the U.S., average 7-Eleven customer spending on delivery orders is $14.50, 1.7 times that of over-the-counter sales.

There, Canadian e-commerce platform provider Shopify has been growing rapidly as competition among online retailers intensifies. Seven will try to catch up in the U.S. by introducing delivery services to around 3,900 Speedway convenience stores. It plans to raise the number to 6,500 by 2025.

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