■Netyear Group <3622> Business Overview
2. Business Description and Strengths
Digital marketing, which the company's business domain is, indicates a marketing method that strengthens relationships between companies and end users by linking with existing media, sales, call centers, stores, etc. in corporate activities to improve experience value at each customer contact point. It is a service that derives results such as improving brand value, sales growth, and promoting business transformation that clients target by proposing and implementing new digital marketing strategies to clients such as companies and local governments.
The digital marketing area is classified into the following 4 media depending on the means of contact with customers. The first is “paid media (paid media),” which posts internet advertisements; the second is “earned media (earned media),” which performs influencer marketing, etc.; the third is “social media (social media),” where consumers post reviews on SNS, etc.; and the fourth is “owned media (owned media),” where various communication measures are carried out on the company's website or application It's”. Among them, the company has strengths in digital service development and planning, development, and operation of digital marketing policies centered on “owned media.”
The company's strength is that it has been working on projects starting from CX improvements for 25 years since its establishment, and it has many drawers to achieve the desired CX (= high consulting ability). CX is literally translated as customer experience, but it indicates “a series of experiences where customers have interest and interest in services and products provided by companies through various points of contact such as storefronts, advertisements, websites, applications, etc.,” and the ultimate goal is to increase CX leading to product purchases, or to have them become fans of that company or brand. By running a series of processes such as CX design, construction, operation/improvement, etc. with PDCA, it is made better, and business growth of client companies is supported. Also, the company's strength is that human resources other than UX designers as specialists can understand the value of UX design and promote projects. As an activity to raise the level of internal UX design, we operate a system that certifies employees who meet certain skills, etc., and 156 people and about 80% of all employees have taken the UX training*, and 12 of them are certified (as of the end of 2024/5).
※ In addition to learning basic knowledge about UX, this is a 6-month course where you actually do UX design in a workshop.
Since methods to effectively improve CX differ depending on the client's business details, it is a custom project where “goals to aim for” are set based on the essential issues faced by the client for each project. Generally, the project period is about 3 months, and the longest one is about 1 year. Also, services are provided to accompany clients in order to continue producing results even after that. As for the system development part, the system is configured flexibly, including external partners, in order to combine necessary technology according to the goal being aimed at. The unit price of an order varies depending on the project, but there is a tendency for projects to become more complicated and larger, as it is required to drive the progress of the entire project by performing active connections, such as complex cooperation with existing systems owned by the client and cross-cutting adjustments within the client company. This is also because there is a growing trend where what CX/DX projects aim for is “transformation of clients themselves.” Furthermore, digital marketing technology continues to evolve day by day, such as incorporating AI technology, and recently client requests have become more specialized and sophisticated. In such a market environment, advanced system development, which was an issue for the company, is being resolved by collaborating with NTT DATA, and synergy effects have begun to appear, such as the company's performance leaving a sluggish period due to an increase in collaborative projects.
Other than custom projects, we also support the introduction of products developed in-house and by other companies. The client industries are wide-ranging, such as retail/restaurant businesses, service industries, manufacturing industries, and finance, and the customer scale is centered around large companies representing Japan. Above all, there are many clients developing the BtoC area where the importance of digital marketing through owned media is high, and projects such as Starbucks Corp Coffee Japan Co., Ltd. (hereafter, Starbucks Corp) and Mos Food Service (8153) are among the large-scale projects they have worked on recently.
In terms of the sales structure ratio by customer for the 3 period up to the 2024/3 fiscal year, the NTT Group centered on NTT DATA is the highest at 30 to 40 percent, followed by the retail/restaurant business at 20 to 30 percent, and the service industry in the 10 percent range. NTT DATA is 30.9% and Starbucks Corp is 12.3% in the sales structure ratio for the 2024/3 fiscal year, and both companies continue to account for 40% or more of sales. There are many collaborative projects for NTT DATA for the telecommunications industry, finance, and local governments, and it is expected that the sales scale will expand in the medium term by strengthening collaborative relationships in the future.
(Author: FISCO Visiting Analyst Joe Sato)