Seria
Corporate History & Strategy

In the 1990s, as prolonged recession depressed household spending and supermarkets and department stores struggled with declining sales, the 100-yen shop industry was experiencing rapid growth. Approximately 20 companies were operating chains, and the market size exceeded 100 billion yen in fiscal 1998. The industry giant Daiso had reached 75 billion yen in revenue, followed by Can Do at 12 billion yen. With manufacturers and wholesalers holding large inventories during the recession and factories accepting near-cost transactions to boost utilization rates, favorable conditions aligned on the retail side: the 100-yen price point stimulated impulse purchases, and stores could open at favorable terms in spaces vacated by specialty shops and other retailers.

It was in this 100-yen shop industry that Hiromitsu Kawai founded Sanyo Agency, the company that would later become Seria. In 1985, Kawai started a mobile vending business as a sole proprietor, selling household sundries such as clothespins at supermarket event spaces. At the time, many 100-yen shop chains followed a typical growth path from event vendors to daily goods wholesalers, then to operating their own permanent directly-managed stores, and eventually to franchise expansion. Kawai's start followed this industry's typical point of departure.

In 1987, Hiromitsu Kawai established Sanyo Agency Co., Ltd. with a capital of 10 million yen, incorporating the business. The following year, in 1988, he built a new headquarters and distribution center in Ogaki City, Gifu Prefecture, establishing the operational foundation. The defining characteristic of 100-yen shops at the time was mass store openings and bulk purchasing—as floor space increased, bulk purchasing became possible, enabling significant discounts on procurement costs through economies of scale. Understanding this structure, Kawai first secured a logistics base and prepared to expand the store network with the Tokai region as his foothold.

In 1994, Seria opened its first permanent store at Nagasakiya Gifu, completing the transition from mobile vending to permanent retail. Kawai adopted the concept of 'a stylish sundry shop,' seeking differentiation from competitors. While the 'cheap but cluttered' image was deeply rooted in the 100-yen shop industry, Kawai pursued a shift in thinking—'selling items worth more than 100 yen for 100 yen'—aiming to establish an unshakeable position in consumers' daily lives. By fiscal 1998, Seria had achieved estimated revenue of 7 billion yen with 238 stores, growing into the industry's third-largest company.

In the 1990s, the 100-yen shop industry was driven by growth through mass store openings and bulk purchasing. Major players led by Daiso ordered products directly from manufacturers—bypassing wholesalers—at factories in China and Southeast Asia, placing orders of 200,000 to 300,000 units and sometimes up to 1 million units to keep costs down. However, bulk purchasing had its drawbacks. Depending on factory and logistics conditions, intervals between deliveries could lengthen, creating a risk of unnecessary inventory buildup. Even when stockouts or inventory losses occurred, the industry compensated through low purchase prices enabled by bulk buying. Systems to accurately track what was selling at individual stores were largely undeveloped across the industry as a whole.

Seria was not immune to this challenge. By the late 1990s, Seria had expanded its store count primarily in the Tokai region, growing to revenues of 7 billion yen and 238 stores by fiscal 1998. However, as the number of stores increased, inventory management and ordering accuracy at each store emerged as pressing management issues. Despite being an industry with low product turnover rates, the breadth of product assortment was key to attracting customers. The industry's characteristic was that displaying not only best sellers but also slow-moving items on shelves created the surprise of 'How can this be just 100 yen?' and stimulated impulse purchases, making it far from easy to optimize inventory while maintaining the appeal of product selection.

In 1997, Seria's founder Hiromitsu Kawai decided to introduce a proprietary ordering system. At the time, the prevailing belief in the 100-yen shop industry was that increasing the number of items would grow sales, and the concept of managing orders based on data was not common. Given the small gross margin per product at the 100-yen price point, investment in POS and ordering systems was considered not cost-effective. However, Kawai judged that ordering based on intuition and experience could not cope with the complexity that came with expanding store numbers, and he committed to the system investment.

This system employed mobile ordering terminals with color displays and pen input capabilities, and was designed and developed entirely by local companies. Kawai's objective was to identify best-selling products and support purchasing and product rotation decisions with data. This 1997 ordering system introduction became the starting point of Seria's IT-driven management, leading to the company-wide real-time POS rollout in 2004 and the order support system introduction in 2006. Kawai, anticipating the shift in consumer behavior 'from impulse buying to purposeful buying,' began steering management toward competing on product assortment optimization rather than sheer product volume.

As of 2004, POS system adoption had barely progressed in the 100-yen shop industry. Neither the largest player Daiso nor the second-largest Can Do had introduced POS, nor did they have plans to do so. The uniform pricing of all products at 100 yen eliminated the need for complex accounting, many small sundries were difficult to barcode, and the cost of POS deployment and operation would compress profits—these factors collectively inhibited adoption across the industry. With the small gross margin per product at the 100-yen price point, the prevailing industry wisdom was that the cost-effectiveness of system investment simply did not add up.

Meanwhile, a different problem was intensifying on the shop floor. At Seria, 700 to 800 product lines were rotated monthly, and errors such as ordering products that had already been discontinued occurred routinely. Lost sales opportunities due to stockouts, accumulation of unnecessary inventory, and delays in recalling defective products—the consequences of management without data were expanding alongside the growing store count. For Seria, where part-time employees constituted approximately 90% of the workforce, building a system that enabled even inexperienced staff to order accurately was an urgent management priority.

Seria's founder Hiromitsu Kawai had been sensing the limits of ordering based on intuition and experience since the early 2000s. The number of products handled was expanding rapidly, and even store managers could no longer grasp what was selling and in what quantities. Furthermore, by the mid-2000s, supermarkets and drugstores had armed themselves with POS and IT to strengthen their price competitiveness, and the pricing advantage of 100-yen shops was declining in relative terms. As the novelty of the format faded, a sense of crisis that the business could not survive without differentiating through product assortment accuracy was shared among management.

In March 2004, Seria began introducing a real-time POS system at select stores, completing the rollout to all 509 directly-managed stores by the end of September that year. What was notable in the industry was that Seria adopted not the conventional method of aggregating sales data daily, but a real-time system where headquarters could access transaction data the instant a checkout was completed at any register. Even NEC, which undertook the development, was hesitant about the technically demanding real-time POS, but Yasushi Iwama, the head of the business development department, refused to compromise. The bulk of funds raised from the stock listing the previous year in 2003 was allocated to this capital investment.

Cost-reduction innovations were also thorough. While many retailers installed store computers at each location for POS system operations, Seria adopted a method where POS registers communicated directly with headquarters servers, reducing the initial investment to approximately half the typical amount. Additionally, the company introduced mobile information terminals called 'Touch One' for ordering, enabling store ordering staff to reference product change information and sales data from the most recent four to five weeks in real time. Promotional information from headquarters was also instantly delivered to register displays, making it possible to mount agile responses such as moving products featured on television programs to prominent display positions that same day.

Simultaneously, Seria revised its product strategy. Of the company's approximately 25,000 product lines, about 6,000 were designated as 'basic items' that all stores were required to carry, while the remainder were classified as 'discretionary items' that each store could freely order. Basic items were set for each of over 400 product categories, ensuring comprehensive coverage so that customers could reliably find the products they came for. Anticipating the shift in consumer behavior from impulse buying to purposeful buying, the company designed a two-tier structure that prevented stockouts of staple items like batteries and cotton swabs while maintaining the freshness of the sales floor through discretionary items.

The sales data obtained through real-time POS validated Seria's hypothesis. The shift in consumer purchasing behavior from impulse buying to purposeful buying was clearly visible at the individual product level. Based on this insight, the company introduced a more advanced 'order support system' in September 2006. This replaced the conventional approach where store staff determined their own order items and quantities with a system where headquarters recommended specific items and quantities to each store. The introduction initially met fierce resistance from the field, but Iwama spent over two years visiting stores, demonstrating effectiveness through actual performance data, and earning the trust of frontline staff.

Seria called this system the 'self-directed hypothesis-testing model.' It calculated customer acceptance rates for individual products using the proprietary SPI (Seria Purchase Index) metric, then cross-referenced store-level rankings with company-wide rankings to automatically generate optimal order lists. Because all products were priced uniformly at 100 yen, the fact that a customer chose one item from among 20,000 could be trusted directly as a demand indicator. Having voluntarily relinquished price fluctuation as a variable, the format was uniquely positioned to capture demand movements with precision.

When order support system utilization reached 100% in April 2009, same-store sales began trending positive year over year. In fiscal March 2009, Seria overtook Can Do in revenue to claim second place in the industry, and in fiscal March 2011, operating profit surged 53% year over year to approximately 5 billion yen in a V-shaped recovery. Recording one of the highest operating profit margins among daily goods retailers, the decision to invest IPO proceeds in POS had fundamentally changed Seria's competitive structure. The sequence of IT investments from real-time POS to the order support system became a case study in which a third-ranked company, inferior in scale, rewrote the industry's competitive landscape through data.

By the mid-2000s, signs of change were emerging in the 100-yen shop industry that had grown rapidly on the strength of low prices. With Daiso dominating the market through an overwhelming number of stores and products, the later-entrant Seria could not compete on product variety, and with all companies sharing the uniform 100-yen pricing, there was no room for price-based differentiation. Although Seria had introduced POS systems across all stores in 2004 and launched the order support system in 2006, building the foundation for data-driven product assortment optimization, the company had yet to implement measures that would transform the in-store customer experience itself.

The prevailing consumer impression of 100-yen shops as 'cheap but cluttered' remained deeply ingrained, and the structural vulnerability of a format where visits were driven solely by price was a concern. Seria's product mix had a relatively high proportion of confectionery and food items, and the low gross margins of these categories were a factor compressing profitability. With the average transaction value fixed at the 100-yen uniform price, improving profit margins required increasing the proportion of higher-margin sundries. At the same time, selling sundries required creating a shopping environment that made customers think 'I want to buy sundries at this store,' necessitating a fundamental renewal of the store brand image.

In November 2007, Seria opened the first store of its new brand 'Color the days' in Yachiyo City, Chiba Prefecture. Under the concept of 'coloring everyday life,' it presented a store format distinctly different from the conventional 'Seria Seikatsu Ryohin.' Moving away from the traditional 100-yen shop image of providing daily necessities cheaply, the store centered its product lineup on design-oriented sundries including interior goods, kitchenware, and craft supplies. Store interiors and display methods were also revamped, aiming to establish a new format that delivered a sundry shop shopping experience at the 100-yen price point.

Expansion proceeded through both new store openings and renovations of existing locations. In March 2009, the company opened a standalone Color the days store in Hashima City, Gifu Prefecture, establishing the new brand's store format. Seria was also simultaneously pursuing an increase in its directly-managed store ratio, converting franchise stores and opening new directly-managed locations under the Color the days format, thereby advancing brand transformation and the shift to direct management in tandem. While Color the days had only 22 stores at the end of fiscal March 2009, expansion accelerated dramatically from that point forward.

The Color the days rollout progressed rapidly. Store count grew from 22 in March 2009 to 81 in March 2010, 167 in March 2011, and 240 by March 2012. The proportion of Color the days stores among all directly-managed locations rose to approximately 25% at the end of fiscal March 2012, with the majority of new openings adopting the Color the days format. The sundries sales ratio climbed from approximately 75% around 2007 to 92.6% in fiscal March 2012, and the gross profit margin improved to 41.7%. The transformation toward a product mix resembling a specialty sundry shop, despite being a 100-yen shop, drove the improvement in profit structure.

In terms of financial performance, Seria's growth accelerated after the Color the days launch. The company overtook Can Do in revenue in fiscal March 2009 to claim second place in the industry, and achieved four consecutive fiscal years of revenue and profit growth starting from fiscal March 2010. In fiscal March 2012, revenue reached 93.6 billion yen, operating profit 7.7 billion yen, and the operating profit margin 8.2%, with operating profit increasing 52% year over year. Same-store sales also showed strong growth at 105% of the previous year. The alignment of data-driven management through the order support system and brand renewal through Color the days enabled Seria to establish a unique position of competing on quality rather than scale.

Eiji Kawai was born in 1967 in Gifu Prefecture. After studying theoretical economics and empirical analysis at the Faculty of Economics, Doshisha University, he joined Ogaki Kyoritsu Bank in 1990. In the credit department, he was involved in developing a system that automatically determined loan approval and amounts, acquiring expertise in quantifying corporate credit risk using statistical mathematical models. In May 2003, at the invitation of founder Hiromitsu Kawai, his uncle, he joined Seria and was appointed managing director the following month in June. He had demanded stock listing as a condition of joining, and guided the company to its JASDAQ listing in December 2004. Thereafter, he promoted the construction of a data-driven management foundation while serving as head of the corporate planning office handling IR activities.

After joining Seria, Eiji Kawai applied the loan assessment approach from his banking career to the retail ordering function. He led the rollout of real-time POS across all stores in September 2004 alongside Yasushi Iwama, the head of the business development department, and in 2006 launched the order support system based on a proprietary mathematical model. Operating on the premise that foot traffic and scale varied by store, he designed a system that predicted demand using conditional probability, achieving product assortment optimization independent of staff intuition and experience. In fiscal March 2009, Seria overtook Can Do in revenue to vault to second place in the industry, and in fiscal March 2014, revenue surpassed the 100 billion yen milestone for the first time.

In June 2014, founder Hiromitsu Kawai stepped down as president, and Eiji Kawai assumed the role of second-generation president. What is notable is that Hiromitsu Kawai withdrew completely from Seria's management without remaining in a chairman or other executive role. Upon taking office, Eiji Kawai articulated his management policies as promoting a free and open corporate culture and enhancing the value of the store brand 'Color the days.' Prior to his appointment as president, he had doubled the number of deputy branch managers at sales offices nationwide to ensure robust support could be provided when store-level issues arose. He also made clear his emphasis on dialogue with investors, declaring the transformation from a company driven personally by its founder to one that could sustain growth as an organization.

After assuming the presidency, Eiji Kawai continued to deepen IT-driven management. Beyond improving the accuracy of the order support system, in 2013 he introduced a personnel allocation verification model using multiple regression analysis that could calculate optimal staffing compositions based on each store's revenue and employee tenure in months. By expanding the scope of data utilization from ordering to the human resources domain, he pursued a management approach that simultaneously improved frontline productivity, including part-time employees, and fostered a comfortable working environment. With the founder's departure, Seria moved decisively from a personally-driven management style to an organizational management approach centered on data and systems.