Expansion of Profit Opportunities Through Data Utilization and DX

Promoting DX Aware of Customer Contact Points and the Downstream Value Chain

Some companies develop cutting-edge technologies and new products that can bring about technological revolutions in society. In contrast, general trading companies need to build new business models aligned with customer values and undertake initiatives in the value chain. ITOCHU promotes DX as an effective method that leads to the achievement of this goal.

DX relates to our “earn, cut, prevent” principles. In each case, we determine whether the utilization of DX is a measure connected to “earn” (contributing to the evolution of business models and the expansion of sales), or is a measure connected to “cut, prevent” (contributing to cost reductions, more efficient operations, and customer management). We aim to further enhance profitability after upgrading the systems that support these measures.

From an “earn” perspective, we are especially focused on “enhancing customer contact points” to accelerate the provision of new value downstream, which currently acts as the central focus of the value chain. First, we promote initiatives ahead of others at Group companies that have customer contact points. Some examples of this include FamilyMart’s expanding advertising business and financial services(→ Creating New Revenue Sources by Making Stores a Form of Media), HOKEN NO MADOGUCHI’s online customer service, and conducting customer behavior analysis using AI cameras in the retail-related business. We aim to expand initiatives that are proven highly effective through collaboration with the existing seven Division Companies using the cross-divisional functionality of The 8th Company. The same goes for customer data. We organize and analyze data in response to changes in the business environment and consumer behavior in each industry of each Group company. While we prioritize optimization for each individual company, our policy is to share data systems organized at Group companies, synchronize the data, and continue building a Groupwide customer base. By utilizing data for the marketing of each Group company, we intend to continue realizing overall optimization at the Group in line with the sales expansion of each company.

In addition, from a “cut” perspective, we especially focus on “supply chain optimization” to encourage cost improvement and social issue solutions in the supply chain. Because supply chains are different for each industry, the initiatives of each Group company are pivotal. For example, FamilyMart optimizes transport routes and orders, reducing opportunity loss, and minimizing food loss through DX. In addition, NIPPON ACCESS, INC. automates ordering to increase efficiency and reduce inventory. (→ Optimizing the Supply Chain Using Downstream Data) Also, other Group companies utilize DX to reduce distribution costs, increase the efficiency of warehouse operations, and enhance productivity.

Furthermore, we are systematically expanding support for DX by steadily collaborating with DX partners and building an internal support system. In November 2020, we concluded a capital and business alliance agreement with BrainPad Inc., an expert in utilizing data. In such ways, we are expanding functions of the DX business for customers and partners. Through collaboration with reputable partners, we are also working to upgrade internal environments supporting the Group’s DX and sustainable internal production system. In addition, we reformed the original IT Planning Division into the IT & Digital Strategy Division in April 2021 and are strengthening DX support for specific issues on the front lines.

Under the basic policy of “Realizing business transformation by shifting to a market-oriented perspective,” ITOCHU expands the field of practical application for DX within the Group. This will rapidly lead to higher profitability and the evolution of business models. We aim to further strengthen our robust business foundation in the downstream value chain by promoting the utilization of DX that grasps the needs of customers and partners.