On a snowy Friday several months ago I was invited to a meeting in a tower high above the spaghetti (ramen?) network of tracks scattering out from the heart of Tokyo’s Shinjuku district. As the freakish late winter storm drifted past the windows, the small conference room was warmed by a table covered with photos of well-lit concourses lined with tiny shops and renderings of concepts for new developments still in the planning stage. On one board there were photographs of small bakeries and dinky bookstores; on another were portraits of smiling young men and women in caramel aprons and matching kerchiefs.
The collection of presentations could have been sales collateral for an architecture firm focused on food-retail projects or it might have been part of a road show for a luxury-goods company’s move into property development but, as the elegant woman decked out in Junya Watanabe explained, was in fact a compilation of various retail extensions her company had developed at train stations around Japan.
“We’re now looking at what we can do elsewhere around Tokyo to bring our shopping and food concepts to both travellers on our rail network and people in the local community,” she said. “We have an opportunity and responsibility to bring good design to help improve neighbourhoods and make travelling by rail more enjoyable.”
Talk to most people charged with urban-mobility initiatives and they’ll likely tell you how their city or region is working on bringing integrated transport to all. Such “IT” projects usually involve getting people from their residence to a nearby station on a bike, then onto a tram (with a proper place to house their bike), then onto a high-speed commuter train, then off at a station and then onto their bike again to pedal to the office. In some parts of the world this sounds much better on paper then the reality, as all of these elements might be reasonably well connected but the interchanges leave much to be desired. Indeed, try this in many a North American city and you’ll find little glue holding the whole thing together – and certainly little in the way of buffers to make the transitions from road to tram to high-speed rails more pleasant.
More often than not, suburban rail stations are sprawling parking lots with a few glass-and-metal huts to keep the rain or snow off. Good luck finding a toilet (see page 120 for more on this topic), let alone a place for a decent coffee or something to read. On this side of the Atlantic, and in the UK in particular, many quaint station buildings have been shuttered with only platforms in operation. The trains that pull in and out of the towns that dot the commuter belt are crammed and operating at full capacity, and passengers have to endure sharp annual fare increases for a shoddy product.
It doesn’t take too much daydreaming or the mind of a brilliant consultant to recognise that many rail companies are still operating under a rather outdated model. It sees them relying far too much on ticket sales when they should be looking for revenue streams from other parts of their operations. In the tower high above Shinjuku, the smartly dressed women around the table at JR East have become experts at not only figuring out how to improve the shopping and service experience for travellers but also how to bolster their company’s bottom line through constant innovation at sprawling main stations, tiny suburban stops and all the platforms in between.
Whether this translates into developing owned and operated brands selling newspapers, soft drinks and snacks or building multi-storey shopping complexes housing scores of carefully selected independent vendors, the approach of JR East and most of its peers is to ensure that they control and profit from the integrated transport experience every step of the way. Where too many a management consultant has advised rail operators (and airlines) to focus on their core business and move out of operations that aren’t directly related to sending trains down tracks and pushing steel-and-aluminium tubes through the heavens, companies are now trying to scratch together new plans to figure out where they can find ancillary revenue.
Many are also wondering why they spun off various businesses in the first place; they would have been far better off holding onto airside retail, duty free, mileage reward programmes and valuable property. Indeed, look at the revenue charts for many Japanese rail companies and it’s clear that the money is in providing goods and services to passengers rather than ticket sales. Thankfully, many rail operators have looked to Japan (and Switzerland) and are seeing the benefits of providing better shopping environments, adding more space for hair salons, doctors and financial-service players and generally upping the offer end to end. With monocle also expanding its retail and café operations, we too are toying with how we might start becoming part of the mix at a rail station or airport near you. If you’d like to find out more, please drop me a note at email@example.com. As ever, thank you for your support.
For more from our editor in chief, read his column in the ‘FT Weekend’.