Of ballpoint pens & digital transformations: Lessons your brand can learn from Muji’s collapse

What your brand can learn from my hunt for my favourite pen

Everyone has a favourite something from that specific favourite somewhere – their daily cuppa or their t-shirts. For me, it was my favourite ballpoint pen from Muji. Nice, smooth, brandless, and the perfect complement to my spiral Muji notebook. An effective and very necessary combo for me – considering that my continuous scribbles are how I process my thoughts during meetings.

Why am I telling you this? Just so you’d understand my panicky situation when I noticed my pen run out of ink as Singapore was getting into a lockdown. Malls and physical stores would be closed, and I hadn’t stocked up for a scenario like this! Believe me, I’m super particular about my Muji pen. So yes, the panic was real, because I didn't know how else was I going to get any work done!

At this point, I really should introduce myself – I’m Quinn and I help brands through digital transformations. And this is the story of my quest to find a way to buy my favourite pen, the trials, tribulations and lessons I learned along the way. All of which I hope can help can teach a thing or two to brands in their own journey to the digital realm.

Opportunities are never too early

Of course, it being 2020, the obvious first step was to visit Muji’s official website. Now I’d visited it several times before and I already knew what to expect – just a typical brand website with a non-comprehensive listing of products – no e-commerce, no way to keep a wishlist of my favourite products. But a girl can hope, right? But still to no avail. I’d always thought that they were missing out big time by not having their own e-commerce channel. After all, e-commerce has all but overtaken traditional commerce. But as physical stores were shuttered and traditional commerce grinded to a sudden halt, the missed opportunity could have bridged the gap created by the massive drop in retail revenue caused by Covid-19, (reported to be at a 52.1 % drop in Singapore). Representing 100% of the revenue they could have made with an online shop during the lockdown months.

Is something really better than nothing?

Although it must be said that Muji did try with a poor attempt to help die-hard fans get their products no matter what. That’s how I found myself staring at a Google Form on the Muji website. Which asked me to manually fill in the product code of the item to be purchased, and a promise of “free delivery above purchases of $500”.

It became painfully clear that Muji was not at all ready, or did not see the need to prepare for a future where consumers are shopping from home more than at the store. With 2019 showing the highest number of store closures in a decade prior and the whisperings of an oncoming recession – everyone knew that something big was coming. No one could have anticipated the current pandemic, but the current economic situation is just the acceleration of a trend that had already begun.

So for companies who think, “we don’t need e-commerce yet”, “we don’t have the budget” or even that “e-commerce isn’t our priority and wouldn’t really contribute much” – It’s not enough to stand still because that’s how you get swept up by the tide. A famous example of simply maintaining the status quo is how photo film companies and stores were out-innovated by changing customer behaviours. The lesson – it’s never too early to start. The digital transformation journey is one that would pay dividends for brands no matter the situation.   It’s never too late to start. 

3 months into the pandemic, the headlines declared that Muji had filed for bankruptcy, with plans to shut down stores in some international markets and “refocus on key regional markets and e-commerce”. I wish I could say I was surprised.

Given their lethargy in transitioning online, Muji was bound to learn their lesson the hard way. The pandemic made quick work of bringing them and several other retail-focused businesses to their knees. After all, shopping is the most obvious digital necessity in a time when everything already has – working, learning, dating etc.

Though late, Muji waking up to this change with its increased focus on e-commerce is nothing but a good sign. Moving to e-commerce is just the very first step of digital transformation – brands must also then quickly pivot to transform their company into a more digital and data-driven organization. They have to redesign the way they do digital marketing, advertising and measurement, to the way they observe and optimize consumer experience from digital channels.

Start small. Start smarter.

One common myth we’ve come across in advising clients embarking on their digital transformation journey is that it would require a huge budget for a non-stop waterfall plan that takes months or even years and migration of a big chunk of the current infrastructure.

But in truth, successful digital transformations are best done incrementally – start small, achieve quick wins, learn from the failure and re-iterate. It’s also important to ride the wave of customer trends – to know how to reach the customer best.

With choices of marketplaces or direct to consumer, it’s important to understand how the customer interacts with your brand. What makes all of this easier though is, that you do not always have to do it all in-house. Which is why I was delighted to find Muji finally listing their products on Shopee, the emerging mobile-driven e-commerce marketplace that’s taking SEA by storm.

By listing on Shopee, Muji would gain quick access to Shopee’s already strong user base and could begin learning about their consumer preferences and digital habits before investing in their own e-commerce capabilities. But that’s really just the half of it.

What Marketplaces don’t tell you

Partnering with a third-party marketplace like Shopee, Lazada or even Qoo10 is the convenient answer; but it’s hardly the sustainable one. These marketplaces, while allowing brands to leverage on their vast access to consumers, can be a double-edged sword as brands will have much less direct access to first-party customer data which could give them insights into their own consumers’ habits and preferences.

Time and again, we’ve of course mentioned how first-party data is set to become the most valuable commodity for brands, especially with crackdowns on ineffective and intrusive 3rd Party Data by the tech giants. A lack of access to data was in fact, one of the main reasons for Nike to break up with e-commerce giant Amazon last year after a two-year e-commerce pivot, in search of better control over their customer data and experience.

Conclusion 

We’ve all seen the effects of Covid-19 and how it became an unprecedented catalyst for brands to start or accelerate their digital transformation journey. As with Muji, some organisations that were slow to start have directly and immensely suffered very apparent losses in their bottom lines. However, it’s better late than never. Brands could consider this the wake-up call they didn’t realise they needed – a great opportunity to reassess their strategies and direct their focus on what truly matters. In short, don’t wait to be another Muji. Make an active migration to digital, instead of being a hapless refugee. (P.S. Also to conclude my adventure, at least I finally know where I can get my Muji ballpoint fix from online.)