Convenience stores first developed in the United States. Although they are much smaller than a supermarket, they sell many daily necessities, from food and magazines to stationery and clothing.

The stores were first seen in Japan in 1969, in the heyday of economic growth. They became popular because of the advantages they offered: a wide selection of goods, and excellent hours-from 7 a.m. to 11 p.m., every day of the year. And as lifestyles changed, the stores changed too, with many of them now operating 24 hours a day. So it is not surprising that convenience stores have spread throughout the country.

Most convenience stores in Japan follow the franchise system adopted in the United States. As part of a franchise chain, stores pay membership charges and fees to the franchisor which, in return, distributes products to the stores, sets service guidelines, and so on. In Japan today, almost 60 franchise chains control more than 38,000 convenience stores nationwide. (In addition to these, there are about 12,000 non-franchise convenience stores.) In places where the stores are fairly close to one another, you can walk past three or four of them in just a few minutes.

How can we explain this phenomenal growth? One important factor is the Point of Sales (POS) system, first introduced to Japanese convenience store chains in 1982. The POS system helps stores manage sales-related information. Some of this information, such as the price and the product code, is obtained from the bar code printed on each product, which a special device reads at the cash register. Other information is recorded at the same time, including the approximate age of the customer buying the product. In this way, the chain gathers information on individual store operations, learning which type of people buy which products, how many they buy, and when they buy them.

Information from the POS system tells franchise chain headquarters which products are selling well, and which are not, at each store. Only products that are selling well are ordered for individual stores. This process of elimination continues until each store ends up displaying plenty of items, but only items that typically sell well in that store. The POS data also tells chain headquarters how many items are generally bought at certain times of the day at specific stores, and this makes for an efficient delivery system. Headquarters knows how many and what type of goods to deliver-for example, packaged meals every day at 6 a.m., 11 a.m., and 4 p.m.; beverages six times a week; and confectioneries and frozen foods three times a week. As a result, customers can be almost certain that the neighborhood store will have what they want, when they want it. And since the POS system provides specific, up-to-date information, stores can stock items that are currently in demand in their own locality.

Many convenience stores in Japan have a retail floor area of only about 100 m2, limiting them to a maximum of about 3,000 types of products. Even so, a local convenience store is generally able to sell what we need for daily living. The stores are, true to their name, convenient.

Because Japanese convenience stores use advanced technical systems like POS, they stock what people want, and this explains why sales revenues and store numbers are rising. For consumers in Japan, convenience stores are becoming an essential part of their daily lives.