For sale: Only the trendiest fare
Eclectic Japanese retailer RanKing RanQueen helps shoppers find the latest and greatest by stocking only the most popular products.
By Tim Hornyak, Business 2.0 Magazine

(Business 2.0 Magazine) -- At rush hour in Tokyo's Shinjuku Station, the world's busiest train stop, a tiny shop near the east exit is crammed with commuters. They're browsing the latest CDs, magazines, and novels, as well as teeth whiteners, nose hair removers, and mineral waters. Just steps away are Japan's three best-selling ear cleaners.

Welcome to the bizarre but brilliant world of RanKing RanQueen, where hundreds of products in more than 250 categories pack the interior of what at first glance is little more than a glorified convenience store.

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RanKing culls data from marketing firms and other stores to spot best-sellers and kill underperformers.

Yet beneath the shop's neon glow, RanKing has taken trendwatching to new heights by giving a simple marketing concept a new twist: The retailer's eight stores stock only the latest goods and assign each item a ranking based on its current popularity in Japan.

Owned by Tokyu, a $12 billion conglomerate that runs railways, department stores, and supermarkets, RanKing was launched in 2001 to add some spice to the sea of newsstands and noodle shops its parent company typically leases out or operates at high-volume hubs.

A convenience store with a twist

Tokyu manager Kazuyuki Tada hit upon the idea of a shop that would reflect current fads - a place, he says, where social trends could be grasped in three minutes. It also didn't hurt that Japan was crazy for o-susume, or recommending, finding all sorts of ways to organize an ever-expanding menu of choices.

But at a deeper level, the approach is a particularly clever way to exploit consumers' need to feel that they're part of the latest trend - even if it's just a toothbrush, says Masahiro Yotsumoto, a director at the Dentsu Center for Consumer Studies. It's no surprise that when an item is ranked tops, its sales tend to double.

To develop ratings for such a wide variety of categories, RanKing relies on data from firms inside and outside the Tokyu group, particularly its own Tokyu Hands, a hip retailer of lifestyle products. RanKing also updates its ratings on a weekly or monthly basis, ensuring frequent visits from its clientele of mostly 20-something women.

While it won't release exact sales figures, it says its monthly per-store revenue is up 10 to 20 percent over the past year, and its flagship store in Tokyo's Shibuya district now draws nearly 20,000 customers on weekends.

Although total sales at Tokyu's retail operations are expected to remain flat at $6 billion this year, the company plans to expand the RanKing chain to 15 stores by 2008.

By then we should know where it ranks on Japan's trendiness scale.  Top of page

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Market indexes are shown in real time, except for the DJIA, which is delayed by two minutes. All times are ET. Disclaimer LIBOR Warning: Neither BBA Enterprises Limited, nor the BBA LIBOR Contributor Banks, nor Reuters, can be held liable for any irregularity or inaccuracy of BBA LIBOR. Disclaimer. Morningstar: © 2014 Morningstar, Inc. All Rights Reserved. Disclaimer The Dow Jones IndexesSM are proprietary to and distributed by Dow Jones & Company, Inc. and have been licensed for use. All content of the Dow Jones IndexesSM © 2014 is proprietary to Dow Jones & Company, Inc. Chicago Mercantile Association. The market data is the property of Chicago Mercantile Exchange Inc. and its licensors. All rights reserved. FactSet Research Systems Inc. 2014. All rights reserved. Most stock quote data provided by BATS.