When Kenji Yamamoto opened the first convenience store in Japan 50 years ago, he didn't even know what to stock on the shelves. 

“Back then, everything was challenging,” he said.

The first items he put in the storefront were canned foods and detergents, which were top-selling items at supermarkets.

A convenience store was initially seen as an extension of a grocery store that sells a limited lineup of goods, but is open until late in the evening. 

A TV news show that featured his new store even called it a “late hour supermarket” as it was open from 7 a.m. to 11 p.m.

But in the half century since, Yamamoto has witnessed firsthand how convenience stores have evolved into a one-stop shop offering a variety of services where customers can pay utility bills, resident taxes and many other fees.

In addition, the stores allow customers to withdraw cash from an ATM, as well as offer food products and other daily necessities.

Yamamoto, then 24, opened his store in Tokyo’s Toyosu district in May 1974 after renovating his family’s liquor shop.

His was a franchisee of what is now Seven-Eleven Japan Co., the country’s first operator of a convenience store chain that adopted the modern franchise system.

The convenience store business model was imported from the United States.

Soon after opening, Yamamoto noticed that there were differences between customers doing their shopping at a grocery store and his store.

Most of his customers were young and they preferred products in compact sizes.

“We sold both large and small boxes of detergent, but our customers tended to pick the smaller ones,” he said.

Seven-Eleven Japan has also developed a range of food products to stock its outlets. It became the first convenience store that sold rice balls in 1978, a hit product. Until then, rice balls were considered something that are cooked only at home. 

The most effective service the convenience store provided in setting itself apart from conventional supermarkets is allowing customers to pay their utility bills there.

That service, launched in 1987, marked the turning point for convenience stores as a place accommodating the various needs of their customers, not to mention the foods, snacks, drinks and other necessities on offer. 

As a store owner, Yamamoto has made proposals to the headquarters of Seven-Eleven Japan with respect to merchandise and services that should be offered.

One was installing an ATM, a service that Seven-Eleven Japan launched in 2001.

Some convenience stores operated by a different chain also offered automated teller machines, but the number of such shops was limited.

Yamamoto keenly felt the need to bring an ATM to a convenience store as he long considered banks closing their over-the-counter services at 3 p.m. “outrageous.”

While convenience stores have sought to respond to customers' varying needs since they started dotting the landscape, it is clear that they cannot compete with supermarkets when it comes to merchandise prices.

Still, Yamamoto believes there is a road map for survival.

“It is crucial for shop owners to turn customers into big fans of their outlets,” he said. “Customers will come and shop at only stores that are working hard to offer what they want.”

Leading operators of convenience store chains have vied to open new outlets.

But the overall number of stores has plateaued in Japan for the past five years or so, suggesting that the market is nearly saturated.

Still, operators are searching for a source of additional growth by taking advantage of the latest digital technologies.

FamilyMart Co. has introduced unmanned outlets since 2021 where there are only self-checkout counters.

Gates are set up at the entrance and exit so that a system utilizing cameras in the ceiling and weight sensors on the shelves recognizes which products a shopper picks up. 

Store workers are assigned to make the rounds for restocking goods.

“This way, we can cut personnel costs and weather a time of chronic shortages of manpower,” said a FamilyMart public relations official.

Such an operation makes it easier to open in a setting where a conventional store would unlikely be profitable. 

FamilyMart operates 39 such outlets at train station buildings and on college campuses.

Lawson Inc. has introduced a technology that enables remote workers to serve customers using animated avatars.

The company was formerly a subsidiary of Mitsubishi Corp., a leading trading house.

But major mobile carrier KDDI Corp. came aboard to split Lawson’s stakes in half with Mitsubishi.

Lawson hopes to cash in on KDDI’s technology to expand its customer base.

The three operators also set their sights on overseas markets.

Seven-Eleven Japan boasts 63,000 outlets in 19 countries and territories, including more than 10,000 each in Thailand, the United States and South Korea.

It aims to bring the total to 100,000 outlets in 30 countries and territories, including Japan, by 2030.

Shinji Abe, chairman of 7-Eleven International LLC, which is in charge of overseas operations, told investors at a briefing in April that the operator will open new outlets at an accelerated pace not seen in the past.

FamilyMart offers 7,800 stores in Asia, including more than 4,000 in Taiwan.

Lawson operates about 7,300 shops overseas. Of these, nearly 90 percent are located in China. 

Lawson plans to add more to total 10,000 outlets in the Chinese market by fiscal 2025.