Can a Japanese app drive adoption in America with a toy store?

Discussion
Photo: Line Friends
Aug 22, 2017
Matthew Stern

Building a new user base for a messaging app is no easy task. But popular Japanese messaging app Line’s attempt to get people in the U.S. on board is one of the more creative — and probably more expensive — ways to try.

Line has opened a Times Square toy store called Line Friends, according to an article in Ad Age. The store is filled with plush toys, slippers, coffee mugs and other swag pertaining to a suite of characters, the “Line Friends” from which the store gets its name. The characters, such as a rabbit named Cony and an alien named Moon, have their own backstories and shared universe. Line has 44 other retail locations globally — mostly throughout Asia — but this is the first in the U.S.

The unparalleled foot traffic in Times Square may make it a better place than most to attract curious, tech-savvy potential users and build brand recognition in volume. Line’s new location is a full store, not a pop-up, and comes with a big up-front investment. Times Square rents have gotten high enough in recent years to drive out established, big-name retailers, most notably Toys “R” Us, which closed its Times Square flagship in 2015.

It is unclear how Line intends to use the store to push app adoption among customers and turn them into users. But the Line Friends retail outlet does not represent the company’s first try at getting U.S. users interested in the characters and, perhaps more importantly, its messaging service. Line previously dipped its toe in Times Square with a pop-up and ran a contest to get U.S. users designing virtual in-app stickers, according to the Ad Age article.

There is already some stiff competition in the U.S. messaging app space. Facebook Messenger was the second most downloaded iPhone app nationwide in 2016 and, as of this year, boasts 1.2 billion monthly users.

And while Line is a huge force in Japan, it’s not even certain if Amazon.com, which has planned the release of a messaging app called “Anytime By Amazon,” can get users to jump to a new messaging app — let alone a complete newcomer to the U.S. market.

DISCUSSION QUESTIONS: How would you assess Line’s strategy of setting up a costly Time Square store to draw new users to its app and messaging service? Are there better ways for online-only offerings to leverage physical retail to generate interest?

Braintrust
"Someone with rose colored glasses, and who is clearly a tremendous salesperson, has convinced someone to finance this very expensive boondoggle."
"Anything new in Times Square typically attracts attention upon its launch. Long-term success is quite another challenge..."
"The happiest person in this scenario is likely to be the rental agent."

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10 Comments on "Can a Japanese app drive adoption in America with a toy store?"

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Nir Manor
BrainTrust

A brand store with a great customer experience in a high traffic location is a good approach to attract users to a new app that is positioned as cool and trendy. Physical touch will drive better conversion than online promotions. However, it still needs to be economically viable and Line should measure the cost of acquisition vs. customer LTV (lifetime value). The argument that it also helps build the brand in addition to generating users is right. However, the measurement should still be done by cost per acquisition.

Adrian Weidmann
BrainTrust

Someone with rose colored glasses, and who is clearly a tremendous salesperson, has convinced someone to finance this very expensive boondoggle. This is a very expensive PR stunt and shows that there is no understanding of the limited exposure this will actually get next week. Leveraging existing physical store infrastructure is a great strategy but it’s all about the tactical execution.

Ricardo Belmar
BrainTrust

Times Square is an expensive endeavor just to convince more people to use a messaging app they’ve likely not heard of before. I assume they picked the location because of its high traffic and diverse audience (many native New Yorkers will just avoid Times Square as a tourist-only location). Other than the novelty of it, I don’t see what will motivate people who are unfamiliar with the app to enter the store and then leave with a strong desire to download the app and use it regularly — who will they be messaging with?

Scott Norris
Guest

I assumed this was entirely about selling merchandise and burnishing brand loyalty to their fanatically-devoted Asian customer base. Make enough SKUs and downloads “available in NYC only” and you have a tailor-made tour bus stop.

Ricardo Belmar
BrainTrust

I agree, great tour bus stop — but it seems like an expensive option!

Ralph Jacobson
BrainTrust

Anything new in Times Square typically attracts attention upon its launch. Long-term success is quite another challenge, as can be confirmed by the number of stores that have pulled out of that area recently. Something that has traditionally been online-only also attracts curiosity when it is manifested in physical form. So initial traffic may be heavy, however there has to be at least one compelling reason for people to return there as opposed to simply going to the merchant’s site online.

Ed Dunn
Guest
3 months 20 days ago

Line Friends is a major logo brand throughout Asia and among Millennials, and I own a few t-shirts myself to wear at Starbucks for a conversation starter.

I believe for retailers, Line is the new UnionPay where “digital lifestyle apps” such as China-based WeChat and AliPay are expanding worldwide among Asian-affluent customers and markets around the globe. Line marketing at Times Square is a signal Asian digital lifestyle apps are pushing to make inroads into the USA.

Retailers may want to take notice at this new trend of mobile apps coming out Asia as a global trend is emerging on not only how payments are made, but the platform users will engage on to interact with retailers in the near future.

Steve Montgomery
BrainTrust

The total cost of acquisition is a term is often use when talking about buying goods for retail. In this case it might well apply to Line’s attempt to gain customers by opening a retail store in Time Square. Would be interesting to see what type of customer growth they attribute to this site.

Bottom line — I agree with Adrian’s assessment. The happiest person in this scenario is likely to be the rental agent.

James Tenser
BrainTrust

With 169 million global users (1/7 the size of FB Messenger) Line trails significantly but has already made a dent without tackling the U.S. market.

Erecting a costly physical store in the “crossroads of the world” in Times Square may not be a profitable venture on its own, but if viewed as a marketing and branding investment, the calculus may be shrewd nonetheless.

Developing a line of licensed characters to represent the brand seems like a whole ‘nother business, but it’s worth considering that it comes from the land of Hello Kitty, an arguable rival to Mickey Mouse in many Asian countries.

The billion-dollar question, of course, is will Americans sign up?

Carlos Arambula
BrainTrust

A Times Square location is expensive, but it will be a worthwhile investment. It is the app of choice for Zillennials and will only continue to grow to other consumer segments.

There are other ways for an app to generate interest, on the surface some better some worse, but Line has a distinct personality that might benefit from a Times Square location.

wpDiscuz
Braintrust
"Someone with rose colored glasses, and who is clearly a tremendous salesperson, has convinced someone to finance this very expensive boondoggle."
"Anything new in Times Square typically attracts attention upon its launch. Long-term success is quite another challenge..."
"The happiest person in this scenario is likely to be the rental agent."

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