No. 7 ― Through the Eyes of the Consul General

A Visit to Amazon and Costco

In a consumer society like Japan or the U.S., upon entering the 21st century, the majority of people’s shopping methods seem to involve a combination of the following three types: The first method is e-commerce, where items are bought online and then delivered to an individual address. The second method involves shopping at a large-scale supermarket on the weekends and buying a whole week’s worth of goods. The last method is one where the consumer chooses and buys items through interacting with the attending clerks, regardless of whether it is a department store or an independent boutique. Amazon, an example of the first method, is headquartered here in Seattle. Another company that developed from Seattle’s suburbs, Costco, has grown to be considered a key representative of the second model. In August, I personally visited these two organizations’ respective headquarters.
 

Amazon

Many people originally remember Amazon as an online store that primarily sold books. During my visit at the headquarters, the company’s representatives showed me photos that captured Amazon’s early beginnings in Jeff Bezos’s garage in Bellevue during the mid-1990s. The variety of goods for purchase has gradually expanded, and we have now come to an age where if there is a need for a product, everyone turns to Amazon to have the goods delivered right to their doorstep. Amazon has recently acquired Whole Foods, a major U.S. organic supermarket chain, and has prepared a fresh produce delivery system. There will soon come a day when fresh vegetables will also be available online for home delivery.
 
Amazon Campus © Amazon.com, Inc.

Amazon is also at the world’s forefront in the field of cloud-computing. According to Ms. Monique Meche, Amazon’s Vice President of International Public Policy, Amazon, along with Google and Microsoft, provides a huge data-processing capacity for start-up companies to use at a low cost. These functions, if developed independently, would cost them millions of dollars. Therefore, for a small to mid-size high-tech company, this information process tool is a necessary part of the infrastructure.

Furthermore, major internet-based enterprises like Amazon are competing with each other over the development of voice-operated technologies. On my tour of Amazon, they introduced me to one such operating technology named Alexa. When an Amazon employee said, “Alexa, what is the weather like in Tokyo right now?” Alexa responded with a human-like voice, “Cloudy with a high of 70 degrees (21 degrees Celsius).” Most recently, Amazon’s Jeff Bezos and Microsoft’s Satya Nadella have announced that an agreement was reached to make Alexa and Cortana mutually operable. Bezos continues to find new avenues of innovation. Notably, he has established a separate company to earnestly bring a manned Mars mission to reality.
 

Costco

Costco is a large supermarket, known for selling goods in large quantities at low prices. Costco’s massive warehouses are located in the suburbs, and therefore are suitable for bulk-buying in a society where car ownership is widespread. In terms of the variety of goods, Costco offers unique high-quality products under the brand Kirkland, alongside other brands. Currently, Costco’s primary markets are that of high-income countries. Japan has 26 stores, including the recently opened branch in Hamamatsu, coming right after the United Kingdom’s 28. However, with plans for future development, Executive Vice President Murphy said that Japan may surpass the UK in the number of Costco stores.
 
Costco

One of the factors that enable the high quality of Costco’s products is the ingenuity of its product line. At Japan’s major supermarkets, for example, there are often about 150,000 items available, but at Costco, they limit the number to 3,500. Because of this smaller quantity, the rotation of the distribution of goods becomes faster and thus they are able to provide fresh and high-quality products at a low cost. Vice President Murphy said that though at first glance, today’s supermarkets don’t seem so different from the world’s first supermarket that opened in 1917, when looking behind the scenes, you can find that in order to outweigh the competition, consistent efforts towards improving various technical and management aspects were being made to realize optimal distribution. For the company to achieve high performance, it is also necessary that employees are skillful and feel that they are rewarded for their hard work. For this to happen, Costco makes sure that employees’ working conditions are the best in the industry.

So, what will happen in the future to the third shopping method? According to Vice President Murphy, department stores and town shopping districts will continue to play a role. However, in order for those stores to thrive, they will have to make continuous efforts so that customers can still find enjoyment and satisfaction through the act of shopping. Seattle is one such city to offer unique and enjoyable experiences with this third shopping method. Please come and explore; there is something for everyone.