Long-term Vision And Medium-term Management Plan 2023/9/13 UPDATE
Smaregi aims to be the top in Japan
Dynamic stores bring about dynamic towns.
Dynamic towns bring about dynamic societies.
By supporting stores, we aim to revitalize society as a whole.
Smaregi aims to be the market leader in Japan. Based on our management philosophy of “OPEN DATA, OPEN SCIENCE!,”
we aim to carve out an “era of data access and utilization for everyone.”
To become the top company in the POS market,
we first aim to be the top in the mid-size business category in Japan.
Share in the mid-size category
The target has been enlarged from the core midsize business category to include big businesses and small businesses.
Number of active stores
Market share in JP
Medium-term Management Plan
FY4/24 - FY4/26
Second EditionSep. 13, 2023
Considering the significant increase in the likelihood of achieving the KPI of "ARR 5 billion yen" set out in our First Medium-term Management Plan (FY4/22 - FY4/24) with a view toward the achievement of VISION 2031, we will move to the Second Medium-term Management Plan (FY4/24 - FY4/26) with newly revised upward target of ARR.
(About revising the Medium-term Management Plan ahead of schedule.)
Aim to achieve growth exceeding
CAGR 30% over the three-year period from FY4/24
Plan for ARR Growth
ARR：Annual Recurring Revenue , CAGR：Compound Annual Growth Rate
Basic Strategy for the Second Medium-term Management Plan
Increase the number of contracts
Marketing, Sales strategy
- Strengthen targets through market segmentation strategy NEW
- Approach EC businesses NEW
- Continue with S&M investment Continue
Increase customer unit price
Customer success, Upselling/cross-selling measures
- Enhance payment services Continue
- Strengthen App Market Continue
- Strengthen Smaregi TimeCard Continue
Increase the number of contracts Market segmentation strategy
Strengthen targets through market segmentation and enhance marketing efficiency
Break down the broad target segments of “retail stores” and “restaurants” by “type of industry/business” and “scale,” and strengthen the approach to specific industries.
Strive to enhance sales and market efficiency through the detailed segmentation of targets.
Through the App Market, provide niche functions that the target industries/businesses demand.
Increase the number of contracts Approach EC Businesses
Enabling use of Smaregi by EC stores through EC-EC linkage and EC-store linkage
EC functions were updated in August 2022. This made it possible for EC businesses that do not have physical stores to make use of all Smaregi functions.
Inventory linkage had been the greatest issue for EC businesses. However, by using Smaregi, it is now possible to link inventory in physical stores and EC stores easily. We will promote the use of Smaregi among EC businesses as a store tool for the EC era that moves beyond the POS register mechanism.
*We plan to update the functions successively, such as compatibility with mall EC carts, etc.
Increase the number of contracts Continue with S&M Investment
Contribute to service usage through marketing activities that engage with the leads from the awareness acquisition phase.
- Advertising and publicity (Programs and commercials on mass media, social media advertising, specialized magazines, food fair sponsorship, etc.)
- Online marketing (Listing, affiliates, owned media, etc.)
- Holding events such as exhibitions, seminars, etc.
Inside sales, field sales
- Lead acquisition and advertising from POS register comparison sites, contents for various industries with cash register demand, SaaS comparison sites, etc. (F&B, retail, medical care industry, etc.)
- Showroom expansion/extension
- Increasing the number of online business meeting points
Increase customer unit price App Market
- Aim to increase customer unit price and improve customer experience (CX) by providing industry-specific niche functions.
- Aim to strengthen collaboration with development partners and increase the number of apps.
- Strengthen EC cart and social media tie-up for retailers. Enhance the OMO/omni-channel domains.
Increase customer unit price Payment services
Expand revenue model
- Build a revenue model with GMV as its source.
- Continue to improve the business (PMI and rebuilding) of ROYAL GATE INC. which Smaregi absorbed through a merger.
- Expand cross-selling with Smaregi, centred on sales as a package with POS services.
- Take up the challenge of the online payment domain. (advance booking, advance orders, table orders, etc.)
Increase customer unit price Smaregi TimeCard
Strengthen functionality for stores and strengthen HR
- Develop functionality for retail, apparel, and F&B businesses, which is Smaregiʼs strength.
- Strengthen employee management and overall work attendance and salary management as a means of acquiring CV regardless of industry and preventing cancellations resulting from scaling up.
- Air commercials, participate in exhibitions, and reinforce upselling efforts to existing customers.
Update History / Past Materials 2023/9/13 UPDATE
Second Medium-term Management Plan released.
Reviewed 4 specific measures and added "enhancement of payment services”.
ARR plan revised upward.
First edition released.
Q&A 2023/3/29 UPDATE
Why was a new Medium-term Management Plan announced in the third quarter?
By announcing it in the third quarter, we can make a fresh start at the same time as the start of the next fiscal year. Additionally, by communicating it internally at an earlier timing, we believe that we can start preparations earlier.
Was there any change in the external environment between the First and Second Medium-term Management Plans?
Looking back, we think there was not a relation between cause and effect with external factors. The announcement of the "First Medium-term Management Plan" was made during the COVID-19 pandemic (disclosed on March 12, 2021). Although there was a period of uncertainty at the beginning of the pandemic, we were able to maintain a certain level of demand without any interruption in inquiries. We found that even during the pandemic, there were people planning new store openings or considering switching existing systems for cost reduction purposes, so we made bold investments in advertising and promotion to aggressively pursue customer acquisition.
In the future, we can expect the rise in demand because of the resumption of inbound tourism, and new store openings due to store turnover, so we will continue to focus on further customer acquisition.
Can you please provide a breakdown of the 9.1 billion yen ARR* target in the Second Medium-term Management Plan? In my thought, the effect of price revisions has already peaked and we expect ARR growth to temporarily slow down, what growth strategies do you have in mind for the future?
We are expanding cross-selling of our payment services and HR services, Smaregi TimeCard, centered around Smaregi (POS), and we do not expect a significant change in the current composition ratio. In particular, we will focus on expanding the payment service that have a high affinity with POS systems.
*Upward revision of ARR growth forecast. (Disclosed on September 13, 2023)
Please let me share more details about the market segmentation strategy.
Our market segmentation strategy aims to unify the direction of target areas that were previously fragmented by each departments. The goal is to have the entire company focus on a specific industry, thoroughly research the required functions, and develop and implement them, as well as to explore effective sales methods and marketing approaches. We will disclose specific actions and target industries as soon as these are determined.
How does the market segmentation strategy relate to Smaregi app market?
Smaregi App Market allows to approach for a wide range of industries. We do not specify industries or other such details, instead our third-party development partners seek out demand and develop accordingly. We are expecting that hit apps will continue to emerge as various apps are released.
Additionally, we can also develop and release apps, so we hope to pursue both approaches strategically.
Can you tell me about the current ratio of EC-only businesses and the strategies for acquiring EC business users in the future?
There are currently no users who only use our services for EC.
We have received requests for EC integration continuously from our users. While we have partially responded to these requests, we plan to actively develop and establish a comprehensive management system for both real stores and EC stores in the future. Initially, we plan to approach business operators who manage both real stores and EC.
Let me share about the growth strategy for the payment service and how do you plan to differentiate itselves in the future?
Since it is difficult to sell just a payment service alone, it is essential to propose together with Smaregi. For instance, Smaregi PAYGATE has a SIM card slot and can be used even in outdoor areas where it is difficult to connect to the internet. We will promote these advantages and strive not to be engulfed by price competition.
The expansion of payment revenue is an essential factor in achieving the goal of 9.1 billion yen ARR* stated in the Second Medium-term Management Plan, and we aim to build it up aggressively.
*Upward revision of ARR growth forecast. (Disclosed on September 13, 2023)