August 24th, 2009
Tokyo Café Targets Trend Makers
By Miho Inada
The Wall Street Journal
TOKYO—At first glance, the Lcafe appears no different than any of the dozens of cozy cafés in Tokyo’s Shibuya district, where trend-conscious young people flock to sip coffee and nibble on cakes and sandwiches.
But look closely at the froth of the cappuccino or a coaster resting beneath a drink or the artwork hanging on the wall and it reveals the café’s side business: pitching new products to affluent and influential young Japanese women.
It’s called a marketing café, a first of its kind in Japan. Sample Lab Ltd. opened the Lcafe last month as a way to reach Japanese women in their 20s and 30s with information about new products.
“Women take an initiative in shopping, they spark a trend,” said Kouhei Nishida, a manager of business development of Sample Lab. “Those young women can serve as influencer.”
At Lcafe, customers must register via mobile phone and provide personal information including age, birthday and marital status in order to become a member. They can, however, use a nickname and needn’t give their exact address.
Once registered, the customers get tokens based on the amount of food or drink they ordered. Those tokens are then brought to a brightly lit “sample bar” where customers redeem the tokens for samples. After being open less than two months, the café has more than 2,000 registered members.
At Lcafe on a recent day there were eight companies offering samples of products. Among them were Refresh Time, a vitamin-infused drink by House Wellness Foods Corp.; pretzel sticks with flavors such as cheese, apple or tomato; and assorted skincare products.
Faced with pressure to reduce costs amid an economic downturn, Japanese advertisers are increasingly questioning the effectiveness of mass advertising and are turning to targeted promotions like samples as more affordable than television ads or glossy magazine spreads.
“There is a fresh interest in distributing samples, as technologies using the Internet and mobile phones, which were not available in the past, allow companies to see the impact of sample promotion,” said Yuhi Hori, in the event promotion division of Dentsu Inc., Japan’s largest advertising agency.
A monthly marketing industry trade magazine called Hansoku Kaigi ran a 21-page feature on samples in its latest issue. It offered tips on how to best use samples to draw crowds and maximize the impact from give-aways.
Harimayahonten Co., a major Japanese maker of rice crackers, set up a café in the corner of its Tokyo store and offered customers a plate of rice crackers with a coffee. Sales have risen 30% and profit from the increased traffic has more than offset the cost of operating the café, the store manager said.
Misako Minami, a 22-year-old college senior stopping in at the Lcafe one afternoon with her boyfriend, said, “It’s simple [to register]. I feel value for money because I can get samples of new products while having a meal.”
Registered members get a bar code that shows up on their mobile phone, which serves as a membership ID and helps Sample Lab track who got what sample. Sample Lab later sends out questions to see how a member liked a particular item. Those who answer the electronic survey get extra tokens for more samples.
Last month, KDDI, Japan’s second largest mobile operator, ran a one-month promotion at the Lcafe for “biblio,” a new e-reader handset from Toshiba for its “au” mobile service. The Lcafe printed icons of phones and books on tables, napkins and even the uniform of the staff. A special menu was created and the phones were placed on all the tables.
“We could convey to our customers how biblio works through actual experience, which is not possible through a TV commercial,” said Chieko Yoshida, a manager of the promotion division at KDDI.
Sample Lab estimates it costs about 150,000 yen ($1,590) for displaying samples at the sample bar and distributing up to 1,500 items for two weeks. Collecting feedback on samples and analyzing it costs about 625,000 yen.
The café, which serves liquor, is open from 10 a.m. until 4:30 a.m. The café clearly caters to women—men are prohibited in the after-midnight hours, dubbed “Cinderella Time.” The ratio of female to male customers is 9 to 1, Lcafe said.
Not all marketers are convinced about the benefits of Lcafe. Hideyuki Suehiro, in the brand design division of Hakuhodo , a major Japanese ad agency, says the Lcafe lacks a system to encourage customers to spread their café experience through word of mouth on the Internet.
Responding to that criticism, Mr. Nishida says the company has such a goal when it opens more outlets. Sample Lab plans to expand Lcafe to other major Japanese cities, including Yokohama, Nagoya and Osaka, in the next couple of years, and eventually overseas, hoping to become a promotion and marketing research firm focused on young women.