Last week, Trial Holdings, a discount supermarket chain, had its initial public offering (IPO), raising $258 million and becoming Japan’s largest IPO of the year. The company’s founder, Hisao Nagata, saw his net worth soar to $1.2 billion as shares of the retailer jumped 41% since their debut on the Tokyo stock exchange’s Growth bourse. The Fukuoka-headquartered company operates over 300 supermarkets across Japan that offer a variety of products at low prices, including food, clothing, and household goods. Its sales and net profit both increased significantly in the year ending June 2023, showcasing its growth and success in the retail industry.
Nagata, who is 67 years old, has been a pioneer in utilizing artificial intelligence (AI) in the retail sector. He has led efforts to analyze customer shopping patterns and optimize inventory management using AI technology. Trial Holdings, under its subsidiary Retail AI, develops Internet of Things (IoT) software and devices, such as AI-cameras and smart shopping carts, to enhance the shopping experience for customers. Nearly two-thirds of Trial’s supermarkets have been converted into technology-embedded “Smart Stores,” showcasing Nagata’s commitment to innovation and digital transformation in the retail industry.
In a rare interview in 2019, Nagata emphasized the importance of AI in retail, stating that not utilizing AI is no longer an option for businesses. He expressed his belief that Japan’s future in retail depends on embracing AI technology. Following this vision, Trial Holdings announced a collaboration with NEC Corp to pilot an AI-powered facial recognition system at checkout counters, allowing customers to link their payment details with a digital image of their face. The company is also exploring the integration of generative AI into its staff communication platform at stores, further showcasing its commitment to AI innovation.
Nagata’s background in retail dates back to 1974 when his father opened a thrift store in Fukuoka, which Nagata later took charge of in 1981. In 1984, he founded Trial Company and a software development company focusing on retail digital transformation technology. The first Trial discount store opened in 1992, and in 2018, Trial introduced Japan’s first unmanned 24-hour supermarket called “Trial Quick.” Nagata’s philosophy of doing business for the customers’ benefit, rather than personal gain, has guided his success in the retail industry and led to the expansion of Trial Holdings into sectors such as real estate, restaurants, and resorts.
While Nagata is known for being media-shy, he has authored books on retail AI and digitization, including one published in 2022 titled “How to Win the Retail Digital Transformation,” which traces Trial Holdings’ history and success in the industry. Japan has seen an increase in new billionaires thanks to its booming stock market, with individuals like Takaya Awata, founder and CEO of Toridoll Holdings, and Shunsaku Sagami, founder and CEO of M&A Research Institute Holdings, joining the ranks of the wealthy. The success of Trial Holdings and Nagata’s leadership showcase the potential for growth and innovation in the Japanese retail sector.
