ITOCHU Announces Strategic Business Investment in Dentsu Retail Marketing

May 12, 2020

ITOCHU Corporation (headquartered in Minato-ku, Tokyo; Yoshihisa Suzuki, President & COO; hereinafter “ITOCHU”) announced today that it has made strategic business investment in Dentsu Retail Marketing Inc. (headquartered in Minato-ku, Tokyo; Shinichi Konno, President & Executive Officer; hereinafter “DRM”), which provides data analysis and sales promotion/marketing support services for retailers, by acquiring shares issued by DRM through third-party allotment. ITOCHU now holds a 20% stake in DRM and DRM is an equity-method associated company of ITOCHU.

Around the world, e-commerce markets are expanding, and digital customer experiences are becoming much, much richer. At the same time, digital transformation*1 is also taking place in retail, and diversification in the roles and functions of retailers is expected to pick up pace in the future. With the evolution of stores into media via the provision of contents and promotional advertising through store signage and instore two-dimensional barcodes, and with the evolution of stores into service hubs through the addition of services such as instore mobile phone charging and the installation of pickup lockers for ecommerce products, offline and online data is becoming seamlessly connected, and a next generation of retailers is expected to emerge through more convenient provision of a wide range of customer experiences.
On the other hand, these changes in the environment will be accompanied by an increase in available data, not only data about purchases but also about customer behavior, and more sophisticated marketing which takes advantage of this data and technology will be required. Not only that, increased demand for field support*2 from retailers and manufacturers faced with chronic labor shortages is expected to lead to an increase in the number of companies using BPO*3 services in the instore promotions domain.

As an organization specializing in instore marketing, DMR offers a one-stop shop for BPO services in the instore promotions domain for retailers and manufacturers, ranging from the proposal of marketing strategies based on unique analysis of ID-POS data and other types of data, support for the maximization of selling space through the planning and production of instore promotional tools and shelf allocation proposals, through to field support for instore operations.

ITOCHU has been pursuing business expansion and modernization in the CRM/BPO field since forming a capital alliance with BellSystem24, Japan's largest contact center operations service provider, in 2014. Through this latest capital and business alliance with DRM, ITOCHU will gain entry to the BPO business in the instore promotions domain. ITOCHU will organically combine BellSystem24’s expertise in non-face-to-face business with DRM’s marketing expertise, primarily in an instore face-to-face context and seek to enhance BPO services in the offline and online sales promotion domains. At the same time, ITOCHU will aim to establish new retail marketing business utilizing the data held by both companies.

Under its medium-term business plan “Brand-new Deal 2020,” ITOCHU is committed to improving value across the consumer-related Group value chain and evolving its business model with new technologies, as a next-generation merchant. In the data and marketing domains, ITOCHU formed a capital and business alliance with FreakOut Holdings, Inc., which is involved in the data marketing business, in December 2018. Then, in December 2019, ITOCHU made strategic business investment in WingArc1st Inc., which provides software services to support data utilization by companies. Through this latest investment in DRM, ITOCHU will further accelerate its evolution in a next-generation merchant in the retail domain.

  • *1Digital transformation: When businesses use the various data and digital technologies they possess to transform their services and products and seek to maximize customers’ experience of services and products to gain a competitive edge.
  • *2Field support: When marketing representatives go around stores maintaining and creating selling spaces to improve sales of products and use of services.
  • *3BPO:Business Process Outsourcing. When businesses outsource some of their business processes to specialist service providers.

(Reference) DRM’s Business Domain