Aiming for 'Earth Satisfaction' by Providing a Selection of Goods and Information -- Cataloghouse Co., Ltd.

JFS Newsletter No.90 (February 2010)
"Towards a Sustainable Japan -- Corporations at Work" (No. 88)
http://www.cataloghouse.co.jp/company/english/

Shopping online is a common practice today. However, the mail-order catalog "Tsuuhan Seikatsu (Catalog Shopping Life)" issued by Catalog House is supported by many customers who prefer turning the pages of paper catalogs. Despite a price of 180 yen (about U.S.$2) per issue, this catalog boasts the biggest circulation among shopping catalogs in Japan - 1.4 million issues - including 1 million regular subscriptions and sales in bookstores.

Established in 1976, the company started a mail order business for indoor running machines and now sells a variety of goods such as home electrical appliances, clothes, general merchandise, cosmetics and food. While more and more people are using its online shopping site opened in 2006, the triannual Tsuuhan Seikatsu catalog still attracts many readers. Its popularity is partly due to its appeal as worthy reading material, as it contains not only product descriptions but also many articles on social and environmental issues.

For instance, the spring issue published in January 2010 featured several interesting topics: the introduction of systems that oblige citizens to engage in agriculture; the nuclear threat from North Korea and pros and cons of revising Article 9 of the Constitution of Japan; a debate over the policy of the Democratic Party of Japan that aims to diminish poverty among Japanese children; and a consideration of how to manage your home towards the end of your life so as to avoid regret.

Catalog House's environmental policy is described in its constitution formulated in 2001:

[Article 1] We shall do our best to sell products that will not harm the earth, its plant life or animals.
[Article 2] We shall do our best to sell products designed to last; that can be fixed instead of being thrown away.
[Article 3] We shall do our best to extend the life of our products as long as possible by finding second users for them after the original owners have no further use for them.
[Article 4] We shall do our best to recycle products that are no longer useful.
[Article 5] The company shall do its utmost to limit its own production of waste and CO2.
[Article 6] We shall do our best to increase sales of products made in Japan.
[Article 9] We shall not sell items such as nuclear missiles, nuclear submarines, fighter aircraft, tanks, artillery or armaments of any kind.

The company's manager of Public Relations Department Mr. Yutaka Kurabayashi said, "We always consider how we can make customers more interested and our goods more approachable." For this article, we asked him about company policy focusing on Articles 5 and 6 of its constitution (limiting waste and CO2, and selling made-in-Japan products).

Using Green Power to Reduce CO2 Emissions

One of the initiatives to realize the goal of Article 5 - to limit its own production of waste and CO2 - Catalog House purchases green power to offset CO2 produced by the electricity consumed in their headquarters, all their stores, and their logistics center. Green power purchase involves buying the environmental value of renewable energy generated from wind, water, solar, geothermal power and biomass through the Green Power Certification Program. In 2009, the company purchased 2,023,415kWh of green power, equivalent to the company's total power consumption; the green power was produced by a biomass power station at the Tanigawa Plant owned by Hyogo Pulp Co. in Hyogo Prefecture, the Kuju Geothermal Power Station in Oita Prefecture, and a citizen's windmill, Akita Future Energy, in Akita Prefecture. The company was thus able to reduce CO2 emissions by about 860 tons.

Aiming to expand use of the Green Power Certification Program to their consumers, the company did a test that tied the certification program to the electric appliances they sold in 2009. For example, for every 10 appliances (heaters, dehumidifiers, rice cookers, etc.) that would together consume over 100 kWh a year when purchased and used by customers, the company purchased 100 kWh of green power certificates. The green power for this test came from the Miyanojo Power Station owned by the Minami-Kyusyu Biomass Ltd. in Kagoshima Prefecture, which generates a maximum of 15.44 million kWh per year (as of 2008) from poultry manure collected from poultry farms in the prefecture. Treating poultry manure was once a problem for the area, but now it serves as a resource for large-scale electricity generation.

The test ended up involving total sales of 34,192 units of the 10 designated items, and the purchase of green power amounting to 3,419,200 kWh. Kurabayashi says, "It was somewhat difficult for customers to understand the advantages of this program, but it did in fact result in CO2 emissions reduction. In future, we would like to promote this certification program to individuals, but it is not exactly easy for individual customers to use the program. At present, Energygreen Co., an intermediary service provider for the program, does not deal with green power purchases of less than 1,000 kWh. We are also planning to use green power at events held by our company."

Seventy Percent of Items Made in Japan

During the last few years, Catalog House has focused on Article 6 "We will do our best to increase sales of products made in Japan." In fiscal 2009, the number of domestically produced items was 547 (69.9 percent) out of 782 items listed in its catalogs.

Since 2009, the catalog "Tsuuhan Seikatsu" has featured the following sentence: "We would like to reduce unemployment through the promotion of products made in Japan." If people purchase items only because they are cheap, manufacturers tend to move their manufacturing site to low-labor-cost developing countries. The effort to make products as cheaply as possible results in job losses in Japan. According to a survey of manufacturing institutions and establishments by the Ministry of Internal Affairs and Communications, in the peak year of 1991, there were 337,578 manufacturing companies in Japan, but by 2006 this number fell to 258,648.

Among its various categories of products, the company has been offering more domestic products in the food category. Japan has experienced many food safety problems in recent years, and consumers are paying more attention to where their food is produced. Based on Article 1 of the company's Constitution, which says "We will do our best to sell products that will not harm the earth or its plant and animal life," the company established separate rules for individual categories such as food, cosmetics and detergents, and has since fiscal 2009 been selling these through an additional catalog, Thoreau. In the case of food products, only primary and secondary ingredients are normally listed as ingredient information. The Thoreau catalog, however, provides more detailed information to customers by indicating tertiary ingredients as well as primary and secondary ingredients.

Catalog Marketing in a "Fully Fed" Society

As part of its corporate philosophy and policy, the company deals with fewer brands per product. This means that the company, as a retailer, can conduct secure product tests and recommends only selected items to consumers. Consumers, on the other hand, can enjoy shopping without worrying about selecting the right item from a large variety of products. As stated in Articles 2 to 4 of its constitution, Catalog House takes thorough care of its relationship with the products it sells. For example, it has a repair section called "Mottainai-Ka" to extend the service life of its products. When users no longer need the items they bought, they can sell them back to the company's on-line shop "Onko Chihin," which resells them as secondhand products for reuse. Finally, end-of-life products are collected and recycled.

The company started focusing on environmental policy and environmental issues at an early stage. The time has now come when every company has to tackle the difficult challenge of achieving a balance between the global environment and business. Kurabayashi says, "A retailer should show enthusiasm for its products and tell customers why it offers these particular products. This creates a relationship of trust with customers." He also adds, "Small, privately owned shops are disappearing due to an increase in large-scale retail stores, and creating trust is getting more difficult. Although Catalog House is a mail-order company, it sees itself very much as a privately owned shop. Unlike consumers in the bubble economy, people today have less of a desire to simply buy things. That's why we have to consider now the challenges retailers will face in future."

The expression "catalog marketing in a 'fully fed' society" appears in the company's corporate philosophy. Catalog House intends to promote "Earth Satisfaction" as a guide for consumers, while also expressing concern about whether it is right to further encourage consumption in our "fully fed society," in which most necessities are already available. The retail industry and even the entire society may change depending on what we as consumers choose from a massive amount of goods and information. The logical approach offered by Catalog House may be more in demand in future.

Written by Taeko Ohno