J. Front Retailing Co., Ltd. Migrates Its Data Analysis Platform to AWS, Securing Data and Strengthening Customer Engagement

J. Front Retailing was established as a joint holding company when Daimaru, Inc. and Matsuzakaya Holdings Co., Ltd. integrated their management in 2007. The holding company covers a wide array of businesses, including not only its department store business, but also other retail, real estate, credit and finance, staffing, wholesale and other businesses. 

As a company looking to grow continuously, J. Front Retailing determined that it could not sustain itself running the core department store business alone in this era of rapidly-changing business. It decided to drastically change its business direction towards “discontinuous growth" and viewed building a digital platform using the cloud as what could supportsuch growth. The company has always used ICT for its business, but, by moving to the cloud, it hopes to advance its digital transformation in order to breathe new life into its business. 

One example of that digital transformation effort is J. Front Retailing's “Lifetime Service Hub” concept. “In the traditional department store/retail business, the main point of contact with customers has always been brick-and-mortar stores. However, since experiences in stores now account for a very limited amount of time in each customer’s life, contacting them in a way that is not restrained by physical location has grown more important,” says Takashi Nakayama, senior general manager of the Group Digital Strategy Division of the Management Strategy Unit at J. Front Retailing. “Lifetime Service Hub gathers both the typical information obtained when providing products and services and also atypical information obtained through conversations and communications with customers. By strengthening engagement with customers that last throughout their lives and building long and deep relationships with them, we will deliver new products and services in line with their lives. ”

When it comes to the success of new strategies—such as providing new customer experiences or improving sales measures—speed is everything. In order to successfully develop diversified new businesses, it was essential for J. Front Retailing to have a mechanism for quickly implementing a less expensive and more secure architecture. Under its new policy of developing and operating systems on the cloud, J. Front Retailing chose Amazon Web Services (AWS) for both migrating its existing, on-premises systems as well as building new services. It built one such new service, the Lifetime Service Hub, on AWS.

Nakayama cited AWS’s track record as the first reason for selecting AWS as a core of J. Front Retailing's IT infrastructure. The number of global customers already using AWS for mission-critical enterprise systems proved the stability and robustness of AWS to J. Front Retailing. The fact that AWS offers a full set of managed services with exceptional flexibility and scalability, with options for choosing the most suitable method for a given use case, was also an important factor in the decision.

In addition to AWS’s technology and services, Nakayama found the strength of the AWS Partner Network to be a driving reason for choosing AWS. “AWS has an overwhelmingly high number of development and operations partners compared to other cloud service providers, and those partners can help meet many different needs in collaboration with the AWS Cloud," Nakayama says. "AWS also provides a wealth of technical information online, so we can search and understand almost anything using the internet. A rich support environment like this is very important to our user companies.” Nakayama notes that being able to have excellent partners introduced to his team and to perform proof of concepts (POCs) quickly helped generate immediate value from the migration. The ability to solidly test the performance—J. Front Retailing's foremost concern—when migrating from its on-premises system to the cloud was a contributing factor for its trouble-free migration and build-out.

As its first step to capitalize on the benefits of AWS, J. Front Retailing refreshed the analytics infrastructure that supports its data utilization. Furthermore, the company employed a method to migrate its existing data warehouse (DWH) for its point-of-sales (POS) data analysis to AWS. The company hopes to overcome the hurdle of existing DWH technologies and licensing with the support of AWS and its partners, looking to utilize Amazon Redshift in the future. All of J. Front Retailing's new systems are being built on AWS, and individual existing databases are being gradually migrated to AWS using a "lift and shift" strategy.

In addition, using Amazon WorkSpaces and Chromebook, the company is working on its “work system reform” initiative by creating an environment in which retail site staff can access the data platform using BI tools. As of 2019, approximately 1,000 employees have been migrated to the new environment, and another 3,000 are scheduled to be migrated in 2020. J. Front Retailing is not only promoting paperless operations but also a BYOD (Bring Your Own Device) approach that guarantees system security, along with a telework environment. Nakayama himself uses Amazon WorkSpaces and recognizes it as a lightweight virtual desktop that provides access to work applications from anywhere at any time with the same exact functionality.

By adopting AWS, it became possible for J. Front Retailing to reduce development time and easily implement mechanisms to improve availability and security measures using standard features. Mr. Nakayama also talks about AWS’s benefits for developing IT professionals and fostering their culture: “For the IT department members who were used to the traditional, on-premises environment, learning about cloud technology was a huge culture shock. But now, they are actively involved in cultivating and acquiring talent who can handle AWS’s cutting-edge technologies. The cloud services that cannot be left solely in the hands of vendors can lead to developing our IT department’s capabilities. Technologies that AWS, as a technology leader, decides to adopt will without a doubt be popular, so users have no choice but to catch up. Our members can always access the latest technologies and grow with them—I think that’s one of the benefits of adopting AWS.” J. Front Retailing looks to break away from traditional software licenses in the future, hoping to increase the number of personnel who can learn and understand the latest technologies, such as containers and serverless architectures, and take advantage of them.

The company is also now considering migrating the enterprise systems that continue to run on-premises to complete a full transition to the cloud. Nakayama says, “Shifting enterprise systems to the cloud is expected to be a very difficult project. We will work to accomplish this task as soon as possible by taking full advantage of AWS Professional Services. I fully expect that AWS will continue to be a vital pieces of our businesses and provide services that result in 'vendor lock-in' in a good way. J. Front Retailing is increasing its mobility as a 'multi-service retailer' through promoting cloud utilization and digital transformation. We cannot take our eyes off of the new services the company is driving forward as a whole group."