For Japan and its corporations to grow, both the consideration of “people,” such as creating a society and workplace environments that are easy for women to work in and participation in society by the elderly, and, as the other side of the same coin, the use of “technology” such as robots and AI, will be necessary.

Last year, we held an Environment and CSR Strategy Meeting, attended by our corporate officers, to consider ASKUL’s strategies about important social issues. With the people from the front lines of our business and the executive team working as one, the Meeting produced concrete outcomes such as the LOHACO scheduled services and making about 1,000 ASKUL LOGIST staff permanent employees.
In particular, we have long been conscious that the “people” perspective and issues concerning personnel have been the single greatest challenge that this company needs to address, and we have continued to address them.

Meanwhile, the fire at our Saitama logistics center (ASKUL Logi PARK Metropolitan Area) in February 2017 caused great concern and inconvenience to the local community, society, our individual customers and suppliers, and all of our stakeholders, and I would like to reiterate my heartfelt apologies.

We must be thankful that all of the approximately 450 employees working at the center when the fire broke out were able to evacuate safely, but the fire did highlight a variety of problems concerning large-scale warehouses. In March, we launched a Recurrence Prevention Committee, and a number of actions have already been taken, such as inspection of the fireproof shutters and confirmation of operations. The question now, however, will be how to prevent disasters and to manage large-scale logistics centers and other sites. On the premise of upholding legislation and other regulations, based on the outcomes of the investigation by the Commissioner of the Fire and Disaster Management Agency and other considerations, we will take proper action, including acting on the new standards for fire-fighting capacity commensurate with inventory and warehouse capacity, and considering measures that go further than the legislative requirements.

Further, in addition to the fire prevention and disaster prevention aspects, we felt keenly once more the importance of corporate operation and management that is in compliance with regulations. Compliance is the “premise” and “foundation” of a company’s CSR and business management. If that foundation were to collapse, the company’s very existence and initiatives, everything, could falter.
We intend to review our governance and internal controls and address the issues, such as establishing the necessary systems and measures for preventing a recurrence, squarely.

In terms of our approaches to the environment, I felt that it was important to keep you all informed about the harsh future realities and challenges that we face, and for us all to think about solutions together. For this reason, last year, we held the ASKUL Environmental Forum 2016, inviting our suppliers as well. At the same time, we are pursuing CO2 reduction initiatives, such as the use of electric vehicles and solar power generation. There are some areas in which we are not making progress and there is a limit to what we can do by ourselves, but we hope that what we are doing will provide some impetus or assistance to bring about a major move in society.
For example, even in the face of “inconvenient truths,” having a proper knowledge of those truths is the first step. The next step is to convey them to other people. This will bring about a change in behavior.
Having recognized the importance of the truth and the situation, even if our actions at the beginning are not quite right, we also need to launch some kind of action, even by trial and error. This is something that I firmly believe.

Last year, we declared our “2030 Zero CO2 Challenge.” However, we still face major challenges, such as logistics centers that, while engaged in energy conservation, still consume large quantities of electricity, and CO2 emissions created in the delivery of goods to our customers. Nevertheless, there are some glimmerings of hope for the future. In LOHACO’s Happy on Time delivery service, customers can specify their delivery time for a certain hour between 6:00 in the morning and 12:00 at night. By advising customers beforehand when goods are to be delivered, we can reduce the rate of re-deliveries from around 20% to about 2%. This is good not only for the customers, but it also helps to lessen the burden on the delivery drivers.
I do feel that this is a good example of using technology to solve our customers’ problems, which enables us to make a contribution both to the environment and to society in areas such as the working load at our sites.

When we think about the next five or ten years, I believe that the key to ASKUL’s growth will depend on just how well we can leverage the evolution of technology.
In terms of both the environment and society, there are many things that can be solved by technology.
In the transition phase of the use of leading-edge technology, just like the industrial revolution, aspects of both “light and shadow”, that is positive and negative impacts, may emerge. Nevertheless, I hope that we can be of service to society from the perspective of harnessing the power of technology to solve issues that have been unsolvable until now.

For example, advances will be made in the optimization of deliveries by accumulating and using logistics Big Data from delivery drivers’ activities. Also, in future, AI will support the front lines as our partner, buddy, and advisor, and as a reliable colleague in solving problems together. These kinds of initiatives will lead to improvements in the working environment on the front lines.
Also, linking the use of voice recognition and AI with the goods delivery systems, they are bound to evolve into new services that will be highly convenient to the elderly, disadvantaged shoppers who are isolated from shopping areas, and their families.

For the past four years, we have been pursuing open innovation through the use of the LOHACO EC Marketing Lab. What began with 12 participating companies has now expanded to about 120 companies. Makers have been able to analyze customer information, something that had been previously unavailable to them, and use the results to make new value propositions for their customers. As many more makers support this venture and join in, a trend of “co-creation” is naturally emerging.
I take pride in the fact that this is the real AKSUL style, and it has led to confidence that this “open” philosophy was the right decision.

However, I do have a sense of crisis in the “shadow”, or negative aspect of “information disparity.”
In fact, there is also concern that Japan’s data is already “hollowing out.” With much of the lifestyle data obtained through various terminals and services being sucked up into overseas servers, I believe that this could serve to encourage even greater disparity. While giving due consideration to personal information, unless data is made open and used for the sake of consumers, this will become a major issue. The adverse effects and destructive power of monopolization of information would be immeasurable. The evolution of technology and evolution of big data have the potential to create a distorted society.

I want for us to be one example of the use of big data for the sake of society’s evolution.

It is our desire to make all of our associated stakeholders happy.
This is linked to our treasured corporate philosophy of the “social optimum.”

We will offer value to our customers by opening up big data to makers and encouraging open innovation.
In terms of delivery, for example, if we benefit from AI, even young delivery drivers may be able to earn as much as veterans. In this kind of way, we may be able to bring improvements to the working environment on the front lines.

In the logistics centers, we have worked to improve staff retention and productivity through initiatives such as providing free meals for staff. This is because we want to provide the staff with an environment in which they can work with hope for the future.

Instead of big data and technology creating disparities and negative impacts, we want to use them to create a society that can work together and create together.
We want to be a platform that will bring happiness to all of our stakeholders and everyone associated with us.