East Asian technological innovations have long outpaced those in the West. Products that sound like recent or even future innovations to most Westerners have been available for decades in Asia, particularly in Japan. These include:
· A handheld device that enables customers to order food and drinks from their karaoke room.
· A button attached to the table that customers push to alert a waitress.
· A slew of vending machines that sell everything you can imagine: alcohol, ramen, underwear, umbrellas, rice, newspapers, cell phones.
· Love hotels where guests can check in discreetly without interacting with other human beings.
Tourists visiting Japan for the first time often feel compelled to take a photo of the ubiquitous high-tech washlet toilets. These fixtures are hardly new; they have been on the market since 1980 and have more than 80 percent market penetration. Years before the Internet of Things became a phenomenon in the West, Japanese people were using their mobile phones to run their baths remotely while in a cab. They were also using a single card on their phones to buy groceries from a store, get green tea from a vending machine, and pay the fare for trains and buses.
Evidence from cross-national academic research suggests that the speed of innovation adoption has historically been significantly faster in Japan, South Korea, and Taiwan than in the U.S. Aside from various market conditions and economic factors, why have Japanese people historically been more comfortable than Westerners with the new and the strange?
Japanese Culture and Technology
Japanese culture is built on a unique amalgam of beliefs and values that stem from Shintoism (Japan’s native and oldest religion), Confucianism, Taoism, Zen Buddhism, and a variety of folk religions. While delving into the principles of each philosophy is beyond the current scope, it is impossible to truly comprehend the Japanese predisposition for adopting novelty without touching on the attitudes and morals that originate from these teachings.
Members of a collectivistic society, such as Japan, are expected to pay attention to social cues and focus on the greater good of the group. In Japan, first-generation emojis were introduced by J-Phone (November 1997), and then in black and white (February 1999) and in color (December 1999) by DoCoMo. Emojis gave Japanese people, who are not culturally inclined to engage directly and explicitly, a perfect tool to communicate in a more expressive but safely ambiguous, inoffensive manner.
Japanese people often welcome the opportunity to interact with automated machines that cannot get upset and do not require an apology.
Similarly, vending machines have provided Japanese people with the convenience and comfort of avoiding human interaction while purchasing products. The question of necessity aside, it is remarkable that Japan has the highest density of vending machines in the world, with approximately one vending machine for every 23 people — generating more than $60 billion in total annual sales.
Social interactions in Japan are governed by unwritten but specific rules that people must follow in order to avoid conflict with others at all costs. Individuals are expected to constantly monitor their own behavior and its consequences in the name of social harmony. This can be psychologically taxing, so Japanese people often welcome the opportunity to interact with automated machines that cannot get upset and do not require an apology.
This tendency to avoid conflict is also reflected in how the Japanese approach religious customs and traditions. Japanese people have no issues ringing in a Shinto New Year, celebrating Christmas, and having Buddhist funerals. The dichotomizing us-vs.-them mentality that shows up in many aspects of Western—particularly American—culture (think: Hollywood movies, especially humans vs. aliens, humans vs. avatars, and blacks vs. whites) is not part of the cultural fabric, as that would go against the ultimate societal objective to maintain social harmony. When the Japanese are confronted by potentially dichotomizing situations, the mentality is more separation (us and them) than opposition (us vs. them).
Further, unlike the Western analytic style of thinking that is rooted in Greek rationality and linear logic, the Eastern dialectic style of thinking welcomes contradictions and ambiguity. While Westerners tend to prefer clear dichotomies, East Asians are able to mentally reconcile contradictions by introducing contextual factors that may have influenced the situation. As a result, the Japanese imagine a more blurred line between humans and other objects and beings.
The Embrace of Innovation
Japanese businesses have contributed to the greater good of society by developing problem-solving innovations through an emphasis on kaizen, or improving and perfecting what already exists. Many of these innovations are technologies that aid (SoftBank Robotics’ helper robots Pepper and Nao) or elevate (the Sony Walkman) consumers’ everyday lives. Japanese people tend to perceive innovation and technology as positive and amiable. In contrast, investment in innovation and technological advancement in the West, particularly in the U.S., has often been associated with military applications.
Moreover, Hollywood films have overwhelmingly depicted AI technologies as something that humans should fear. Common themes include robots and machines that gain superior intelligence and take control of the world, Big Brother governments that use technology to watch over and control people, and cybersecurity breaches that jeopardize privacy and safety. Technology appears less friendly, and often intimidating and ominous, to Westerners.
Ever since the European Court of Justice ordered internet search engines to honor people’s “right to be forgotten,” Google has received more than 650,000 requests to remove certain websites from the internet. From this perspective, it is no surprise that Japanese people display less resistance to interacting with inanimate objects and unconventional beings including machines, virtual beings (such as avatars and virtual girlfriends), and robots.
Kami and Animism
The other, perhaps more intriguing, reason stems from the Shinto belief in kami—which can be loosely translated as god, spirit, divinity, or deity—and animism, or the notion that everything, including manmade things, has a spirit and should be respected. This belief is ingrained in various aspects of life in Japan, and is arguably a core foundation of the Japanese mentality. Kami are thought to exist everywhere — natural, weather-related phenomena such as rain and thunder, living things such as trees and animals, earthly formations such as mountains and rivers, or things in space such as the sun and the moon.
Japanese children are taught from a very young age to treat everything well and with care, including teddy bears, rocks, and even trash. One is expected to empathize with all things in life and never kick, throw, step on, or handle them roughly. This empathy extends to Japanese people’s relationship with land. Before any new construction is built, a Shinto priest conducts a groundbreaking ceremony, or Jichinsai, to pay respects to the land and its local guardians.
Another notable and more modern representation of this animistic faith is the uniquely Japanese proclivity for anthropomorphism, or the tendency to personify inanimate objects. It is not uncommon for Japanese workers to name machinery in a manufacturing facility. For example, one manufacturer called one of its robots Nobunaga, the name of a famous Japanese feudal lord. Similarly, mascots are often an integral part of a business entity’s brand and marketing efforts. The Japan Post has an entire community of teddy bear characters with names such as Posu-Kuma, Posu-Milk, and Posu-Toast who, as the story goes, happily work together at a post office in the forest.
Interacting with robots and imaginary beings is arguably perceived as an extension of existing animistic behaviors and beliefs.
Again, in this cultural context, interacting with robots and imaginary beings is not so unusual, and is arguably perceived as an extension of existing animistic behaviors and beliefs. LovePlus, a Nintendo DS game first released by Konami in 2009, enabled lonely single males in Japan to travel on a so-called real couple’s vacation with their virtual girlfriends. Henna Hotel is a tech-forward hotel concept focused on optimizing business efficiency. The hotel uses a multilingual dinosaur robot to help guests check into their rooms. Robot arms store guests’ belongings, and there is a virtual-reality karaoke room where guests can sing their hearts out while surrounded by 50,000 virtual fans. Recently, as part of an effort to alleviate the growing strains on Japan’s aging society and resulting rising demand in Buddhist priests for funerals, a Buddhist funeral robot was introduced at an industry fair.
It is a gross oversimplification to put all Asian cultures into a single bucket. However, certain commonalities in beliefs and values among East Asian cultures are rooted in its intertwined history and philosophical schools of thought. Just as there are myriad kami in Japan, various forms of kami exist in Chinese and Korean culture. Moreover, the teachings of East Asian philosophies such as Taoism, Confucianism, and Buddhism focus on how one should live life on Earth, and thus tend to have a more practical rather than otherworldly emphasis.
One key tenet of East Asian philosophy is to live in harmony with nature and all things in life. One is expected to be flexible and adaptable, and to evolve with the flow of time and nature’s forces; to resist the inevitable changes in life is perceived as impractical and at odds with nature. Thus, to an East Asian consumer, adopting new and strange technologies and incorporating them into daily life is not so different from adding a trendy pair of shoes to a wardrobe or making a trek to the newest café around the corner.
The Rapid Ascent of China
For decades, Japan has been the dominant soft power of the East, wielding influence in Asia and around the world with cuteness (Hello Kitty), cars (Lexus and Toyota), and technology and entertainment (Sony, Nintendo, and Pokemon). Many of its neighbors, including China, have often looked to Japan for current and future market trends and the newest gadgets. Recently, however, the power dynamics have started to shift. The developed markets in Japan and the U.S. evolved more gradually, but consumer adoption of new technologies in China is beginning to accelerate.
Until recently, the Chinese market had insufficient infrastructure and resources to develop a ubiquitous consumer-centric digital landscape, and the average consumer could not afford consumer technologies. The masses did not have an opportunity to transition from large desktop computers to laptops, tablets, and cell phones.
Today, China has the world’s largest e-commerce market. The government’s strong push to develop China into a digitally native country was a key contributing factor to its rapid evolution. As mobile devices became more affordable and digital connectivity and online platforms improved, Chinese consumers turned more and more to their smartphones for goods and services.
The market context was also conducive to fast adoption, as no legacy infrastructures, processes, and businesses were tethered to the older ways. Furthermore, Alibaba and Taobao’s sheer dominance of the market resulted in huge network effects in user adoption of their platforms. Their scale has driven innovation effectively, accelerating the leapfrog effect. In 2017, mobile payments in China, dominated by Alibaba’s Alipay and Tencent’s WeChat Pay, exceeded that of the U.S. by more than 40 times, amounting to an astonishing $15.4 trillion.
The marked difference in land area between China and Japan makes for drastically different logistic and distribution networks. In China, e-commerce and drone delivery technology developed at such a rapid pace somewhat by necessity. For example, it is quickly becoming the norm for people living in remote rural villages to regularly have drones drop off products they ordered on JD.com.
On the other hand, although Japanese people are comfortable engaging with technology, they have not exactly jumped onto the e-commerce bandwagon. E-commerce and mobile technology infrastructure is well developed in Japan, but consumers still tend to prefer the experience of actually visiting and purchasing in physical stores. Japanese consumers are sticklers for quality, and therefore feel the need to meticulously inspect a product in person before making a purchase. In fact, a recent survey by CBRE found that 80 percent of Japanese retailers had not experienced the showroom effect. Moreover, given the advanced public transportation system and the density and proliferation of retail across the country, Japanese consumers are able to access stores easily.
The groundwork has been laid for China to continue to innovate. As companies like Alibaba bridge the digital and physical worlds of retail through their focus on developing immersive, seamless technologies, China is poised to become one of the most dynamic, tech-forward markets in the world. Soon, it may be just as beneficial for Western companies to look to China for inspiration as it is for them to mimic or import Japanese innovations.
The Future of U.S. Retail
The U.S. and Asia have vastly different cultures and attitudes toward new technologies. Lately, however, U.S. consumer interest and engagement with technological devices has been evolving. American consumers are increasingly comfortable interacting with robots and machines, as is apparent from the significant market penetration rate of smart speakers. In fact, more than a third of U.S. consumers currently own smart speakers, and this figure is expected to rise to nearly 50 percent. Furthermore, consumers are now using voice assistants in more engaging ways and for more tasks than before.
As consumers’ demands change, many American businesses are falling behind. More innovative and tech-forward consumer-centric businesses are performing well, while many traditional retail businesses—such as Sears and JC Penney—are struggling. Digitally native companies, as well as other upstarts that are not tethered to legacy infrastructure or business models, are rapidly disrupting various retail models.
In an effort to connect their physical and digital stores, Nike launched a retail concept called Nike Live in Los Angeles that carries limited edition merchandise and offers a drive-thru service where customers can pick up merchandise they ordered remotely. Carvana, an innovative car retailer, uses its towering coin-operated vending machines to change the ways U.S. consumers buy cars. Carvana’s model is designed to capitalize on the fact that Millennials and Gen Zers are quite comfortable making purchases — even major ones — without interacting with another person. Using streaming technology, the fitness bike brand Peloton enables consumers to virtually join fitness classes in the comfort and convenience of their homes.
Interestingly, it appears that the purchasing habits and preferences of younger U.S. consumers are becoming more similar to those of Asian consumers than to those of older U.S. consumers. Specifically, younger American consumers are more comfortable with technology, and care more about the brand story and their shopping experiences than do their older counterparts; furthermore, younger consumers’ spending continues to grow. Given this consumer evolution, it is unfortunate that companies like Carvana and Peloton still represent only a small fraction of total U.S. retail sales.
The time is now for retailers to create a more technologically driven, experiential retail environment, and they can start by simply watching and learning from the East. They do not have to reinvent the wheel to be innovative and cater to younger consumers. In fact, to build success smartly, they can — and will likely have to — adopt some of the innovations that have existed in the East for decades. However, they must also keep in mind that there are real cultural differences between Asian and Western consumers when it comes to comfort with humanized technology. Western businesses must strike the delicate balance between humanizing technology enough to ease consumers’ minds, and not humanizing it so much that the interaction causes apprehension. At the same time, U.S. consumers need to overcome their intimacy issues with technology if they don’t want to be left out of the future retail loop.