Business Model

Our value of “the foundation of prosperous home living” is created through manufacturing, logistics and retail sales.

It is imperative to achieve outstanding quality and functionality at an affordable price to create “comfortable, luxurious home living.”
To help accomplish our business strategy – “Manufacturing and Retail Sales” – we have implemented a logistics strategy that begins with Product Planning and Raw Material Procurement to Manufacturing and Logistics and Sales, while reducing the intermediate cost.

Offering and providing value in the form of “the foundation of prosperity” to the global community.

Functions and Merchandising Activities of NITORI Group

Manufacturing Function: Research and Procurement

Procuring raw materials based on market research across the world, seeking better cost with appropriate quality.

NITORI’s global sourcing beyond the border.

The procurement of raw materials is the first step in manufacturing low-cost and high-functionional products that match our customers’ needs.
If we depended on trading companies to handle the procurement process, it would be impossible to reduce prices by one-half while ensuring quality and functionality. Therefore, at NITORI, our buyers check new products and materials at overseas exhibitions.
In addition to confirming quality and functionality, buyers calculate backward from the price demanded by customers (overwhelming low cost) to thoroughly investigate whether cost conditions are fulfilled. We negotiate with overseas manufacturers and procure from all over the world.
NITORI began sourcing overseas in Singapore in 1989.
After establishing new facilities, consolidation and elimination, we currently operate procurement centers in China, Malaysia and Thailand. We have streamlined suppliers from areas throughout the world. In the future, we will continue to gather a variety of regional information by visiting local sites in an effort to seek stable suppliers.

Manufacturing Function: Production and Quality Control

Manufacturing low-cost, highly-functional products in overseas factories. Procuring more than 80% of the products NITORI handles from overseas.

In addition to overseas production and quality control, NITORI is working on improving distribution efficiency as well.

Raw materials procured throughout the world are shipped directly to factories that have met NITORI’s quality standards. Currently, more than 80% of products are procured overseas.
NITORI Group began operation out of an Indonesian factory in 1994 and a Vietnamese factory in 2004 which were both managed by NITORI Furniture Company Limited.
Our Indonesian factory and Vietnamese factory are key locations among the groups where we develop and manufacture furniture such as dressers, kitchen cabinets and sideboards. We continuously expand the production capacity to be prepared for the future. Even when we manufacture at factories not owned by NITORI Group, we do not outsource the entire process. Instead, the process is monitored by our own employees working at each regional office. In addition to quality survey of products, we also supervise their manufacturing processes. NITORI is making every effort to maintain and improve the quality of our products and manufacturing process.
One of the main objectives to realize overwhelmingly low price is to reduce the cost of logistics to nationalize merchandise from overseas. Operations at our Huizhou Logistics Center began in May 2007, and in December of 2009 at our Shanghai Process Center. In addition to enhancing distribution efficiency, we have also established offices in Asian countries in order to support trade with Japan.

Continuously improving quality in order to achieve “Offering the Unexpected”, Safety and Quality

The most important thing is to remain focused on appropriate quality. That is why we continue to improve quality control systems based on in-house (including overseas) qualification schemes.

We established the Quality Improvement Division in 2006 in an effort to improve the quality at NITORI. Since then, we have introduced quality control techniques from automotive manufacturers, and made countless improvements and innovations. Rather than focusing solely on products, we make improvements in quality control across five stages: development, manufacturing, logistics, retail and customer service.
To put this approach to quality control into practice, it is crucial to have mechanisms in place to train and develop human resources. In addition to having trained employees in quality control departments, it is important that general and part-time employees also have a high level of awareness and expertise when it comes to quality.
At NITORI, we have set up in-house qualification schemes for positions such as “Quality Examiner” and “Quality Control Engineer.” Outside Japan, we also provide instruction in quality control at plants operated by overseas suppliers.

• Product safety/quality control
• Awards for product safety

Distribution Function

Development of distribution systems and IT systems for efficient product shipping and cost reduction.

Japan’s largest distribution center and an advanced distribution system.

NITORI Group owns its own distribution centers in order to efficiently and quickly ship products to stores throughout Japan, as well as to reduce the cost of storing products.
Our Kanto Distribution Center and Kansai Distribution Center are among the largest in Japan. Moreover, our distribution system development doesn’t stop at hardware.
In terms of software, beginning with implementation of the industry’s first automated multi-tier warehouse in 1980, we have developed our own unique systems for inventory control and stable supply of products. From collections overseas and transportation systems to small-lot delivery systems for Japanese stores, all systems have been developed by the NITORI Group.
Because of the shift to a holding company system, all domestic distribution functions are handled by Home Logistics Co., Ltd. In the future, in order to further reduce distribution cost, we expect reform of total group-wide mechanisms from inventory management to shipping.

Through independently developed systems, enabling further increases in efficiency and cost reductions.

In order to reduce distribution costs, NITORI develops its own IT systems.
In 1995, we began development of systems using personal computers.
In 1997, we achieved downsizing of our core systems.
In 2016, we introduced an automated warehouse picking system called AutoStore.
In particular, our invoice issuance system automatically allocates inventory and makes shipping reservations simply by registering orders from customers. Furthermore, through a link with an electronic map, it is possible to issue various kinds of invoices.
Through these kinds of systems, we have increased efficiency and cost reduction. We are accumulating unique know-how of NITORI in this way. All of these elements help us to realize an overwhelmingly low cost which cannot be imitated by other companies.

Sales Function: Stores

Product proposals which are easy for customers to view and understand is the true value of NITORI stores.

The total number of stores exceeds 400, which brings NITORI stores even closer to customers.

Because NITORI seeks to provide “comfortable, luxurious home living” to people all over the world, it is important that NITORI stores be in close proximity to customers.
As of 2016, NITORI has 430 stores (including overseas stores: 24 in Taiwan, 5 in U.S. and 8 in China). Furthermore, we are working to create stores that respond to a variety of location conditions and are promoting the formation of a dominant area through adjacent positioning for the sales area of existing stores. We hope that increasing our number of stores will enable more people to experience the enjoyment of shopping.

Special sale displays which fully convey the appeal of products.

NITORI places great focus on sale displays at each store. For NITORI, sale displays are an opportunity to present products to customers. In order to fully convey the appeal of products to customers, we insist on special methods for displaying and arranging products. We repeatedly refine our methods to realize even better sale displays and then implement these methods at all stores. In addition to methods for showing a single product, this also applies to how the entire sale display is shown, such as the positioning of sale displays, width of aisles, lighting, product explanation cards and POP advertising.
A major feature of NITORI’s sale displays is displaying coordination for lifestyle scenes, such as living rooms and bed rooms. This enables customers to form an image of the ideal home which matches their own lifestyle. NITORI also exhibits model rooms where customers can see coordination for an entire home.
In addition to a wide line-up of products at reasonable prices, this lifestyle proposal is the greatest advantage of NITORI.

NITORI enables customers to coordinate colors, patterns and materials in rooms throughout their homes.

Perfect coordination— NITORI believes that this is the most important element for customers to enjoy a “comfortable, luxurious home living.”
It can be said that a “comfortable, luxurious home living” is only realized when there is harmony between various furniture, fabric and daily goods in each room of a house. In addition to enabling customers to choose from a wide range of colors, patterns and materials that match their lifestyle, all of NITORI’s products feature a beautifully unified design and coloring. This planning makes it easy for customers to coordinate their home.
Diversity that enables customers to select tastes that match their lifestyle from among numerous products is crucial. Unification which enables easy perfect coordination.
This is the ultimate value that NITORI provides to our customers, surpassing even price, function and quality.

Advertising Function

Applying the principle of “self-sufficiency” to advertising for efficient and effective appeals.

Using the best method for conveying NITORI’s message to customers based on their point of view.

Instead of viewing advertising media as simply a sales method, NITORI considers advertising as a communication method for conveying a rich lifestyle to customers.
From newspaper inserts and catalogs to mass advertising such as TV commercials, we hold repeated consultation with the divisions involved in product planning and store management as we seek the best expression for conveying NITORI’s message to customers.
The NITORI brand has achieved sufficient recognition through the slogan “offering the unexpected.” In the future, we will continue to increase recognition through the slogan “perfect coordination NITORI.”