A Web Tale of Two Countries

The Internet is becoming an important tool for the major Japanese watch brands, both in Japan and in the United States. But the big three—Seiko, Citizen, and Casio—are driving in very different lanes on the information highway.

The major watchmakers are using the Internet to sell watches—albeit in a limited way, for now—and to collect market data. For the past five years, Citizen Watch has had a Web site (in Japanese only) called “My Creation.” Japanese consumers can custom-design watches online and order them directly from Citizen. More than 50,000 people have used the program since it began. (Though Citizen officials say it’s limited to Japan, at least one German Web surfer recently ordered a watch.)

In the process, Citizen has gathered useful data on Japanese consumers’ likes and dislikes in watch design as well as their tastes and ages. “It is a good customer database,” says Katsuaki Noji, president of Citizen Trading Co., sales agent for Citizen watches worldwide. The Citizen Web site also provides new product information, collects consumer survey data, and refers consumers to authorized dealers.

Casio is doing something similar in Japan with its “Customized-G” online test program, which was launched on Dec. 1, 2000. Consumers can order the color and case of the Casio G-Shock watch they want and either pick it up at the nearest Casio dealer or have it shipped directly to them.

Getting ‘Wired.’ Last year, Seiko Japan began selling its new Wired watch online (two models not available in retail stores) in collaboration with 7-Eleven Japan. The watches are available only through the 1,000 7-Eleven convenience stores in Japan, through a joint e-commerce venture between 7-Eleven and Seiko Watch Sales Co., a Seiko Corp. wholesale division in Japan. Consumers can order a Wired watch through the Japanese-language-only 7-Eleven or Seiko Web sites and pick it up at their nearest 7-Eleven store. Seiko sends the watches to 7-Eleven/Japan’s inventory center, which delivers them to the appropriate stores via 7-Eleven’s distribution system.

According to Chushichi Inoue, president of Seiko Corp., “The Internet joint venture is just one more way for Seiko to promote its business [in Japan].” Some 2,000 Wired watches were sold during the program’s first two months in mid-2000. The watches are sold at full retail price (11,000 yen, or about $105) with no discounts allowed. “We want to use the Internet in the proper way and show the trade that [e-commerce] can be a decent, honest way of [doing] business,” Inoue says.

Seiko is also using the Internet to sell a high-end digital watch for runners, called PulseGraph. The online consumer sales data it receives makes production more efficient, “because we can plan according to actual sell-through information as opposed to information which comes to us through many different hands,” says Hiroshi Harigaya, executive vice president of sales and marketing for Seiko Corp.

Curiously, there has been no reaction from Japan’s jewelers and watch retailers to these online sales, either positive or negative. That may be because Seiko is “very careful to support our retail customers’ interests, not interfere with them,” says Inoue. Still, the watchmaker is studying Japanese consumers’ reactions to the online programs and “how the business accommodates the Internet,” says Harigaya. Direct online sales, he notes, could have “a significant impact on our production, because we could obtain firsthand information directly on how our products are sold through to the consumer.”

Only in Japan. All the watchmakers say their Japanese online programs are only for Japan, but—in theory, at least—they don’t rule out the possibility of someday exporting them. “Each country is different, and so we are studying them one by one,” says Casio’s Steve Kimura. Seiko’s Wired/7-Eleven program is “a test only in Japan, and only in Japanese,” says Inoue. “We have no intention of expanding it drastically.” He suggests, though, that “this kind of harmonized joint venture between wholesaler and retailer could be taken to any market, if the retailer involved is big enough to have its own inventory centers and a very sophisticated delivery system.”

Both Citizen and Seiko officials in Japan, though, cite problems in applying their online sales programs elsewhere. “We are concerned about efficiency and whether we could handle selection and delivery with the same quality as we have now through traditional distribution channels,” says Harigaya. And Akihiko Suzuki, general manager of Citizen Trading Co.’s overseas trade division, notes that the problem is “production facilities, not taking orders for watches. We can’t simply transfer this idea of customized watches to anywhere in the world, because we don’t have production facilities there. We can produce ideas [in Japan] for customized watches, which come from Japanese consumers, because we have production facilities here to do it. But without such production facilities, this can’t be done.” And the cost to ship customized watches to consumers elsewhere in the world “would be more than the cost of the watches themselves!”

To sell or not to sell. The U.S. sales agents of Seiko, Citizen, and Casio all maintain Web sites, but neither Seiko nor Citizen plan to sell their products online to consumers, even as an experiment. (In fact, a few officials expressed surprise that their parent firms do it in Japan.) As Laurence R. Grunstein, president of Citizen Watch of America, puts it, “We have no interest in selling any product on the Internet. That is the prerogative of my customers, and I have no intention of interfering with that. We’re wholesalers. That’s what we do best.”

The Citizen and Seiko Web sites here are primarily informational, promoting and describing the companies’ watches. They direct online consumers to the authorized dealer nearest to them, based on a user’s address or zip code. However, both companies are revamping their Web sites to make them more efficient marketing tools, adding business-to-business channels for their retail customers and more efficiently collecting consumer data.

Seiko Corp. of America (www.seikousa.com) is consolidating all its watch and clock Web sites into one site, providing more online support to its retail customers and developing business-to-business features to make it easier for authorized Seiko retailers to obtain information about (and order) products.

The company also is adapting its site to collect general data about its Web visitors—who they are, what watches interest them, how they use the site, and what their opinions are—through online polls. That database will give SCA “greater insight into consumers’ needs and interests and be useful in planning new product lines as we go forward,” says Gloria Maccaroni, SCA vice president of marketing.

Meanwhile, Citizen Watch of America (www.citizenwatch.com) is “constantly looking to see how we can improve our Web site and make it more user-friendly for our retail customers and for consumers,” says Grunstein. For example, he notes, Citizen recently added “better explanations of our highly technical watches and how to use them.” The company also has modified its mainframe computer in California so consumers can always get the most updated listings of current authorized dealers and maps showing their locations.

In addition, CWA has spent much of the past year developing its own business-to-business “portal” to let its retailer clients perform a variety of online functions, such as checking accounts or ordering products. “It is designed to be a time saver for them,” says Grunstein.” CWA also is tracking some broad-based market data via its site.

Watches on the Web. Casio, on the other hand, is using the Internet for direct watch sales in the United States. Its watch Web site is part of the official Internet home for all Casio Inc. products, such as calculators, cameras, computers, TVs, and printers as well as watches. The site is more like Amazon.com’s (with “shopping carts,” specials,” and “how to order” advice) than Seiko’s or Citizen’s.

But according to John Clough, executive vice president of Casio Inc.’s Timepiece Division, the two-year-old watch section of the Casio Web site is “primarily informational” and is “used 99% to tell people about Casio watches.” While Casio watches are sold online, he notes, buyers pay full retail price as well as shipping and handling costs. Clough says the Casio watches sold online “only represent a minuscule amount in terms of our revenue [less than 2% according to Casio Inc. figures] because consumers can buy the same watches at better prices at their [hometown] Casio retailers.”