Makoto Okumura Visits, Ise City, Mie Prefecture: "Ebiyaya"

This project features reports from Dentsu Inc. communication planners active on the front lines, sharing "currently intriguing locations or spots" that caught their attention.

Planner: Masahiro Okumura (Dentsu Inc.)

"The Challenge of AI × Local × Established Business"

Ebiyaya, a restaurant and souvenir shop near Ise Shrine in Mie Prefecture, boasts over 100 years of history. After Haruki Odashima joined the company in 2012, profits increased significantly through the use of proprietary AI, while simultaneously dramatically improving employee work practices. We explore the reality behind this success, which is attracting attention across various business sectors.

Points that caught Okumura's attention

❶ A local, long-established business is achieving remarkable results by utilizing AI technology that astonishes the world. What kind of marketing perspective did President Odashima, who made this happen, possess?
❷ Transforming a century-old company so dramatically in just a few years must have required considerable courage and drive. What philosophy guided this, and what challenges were faced?
❸ Furthermore, they are promoting a "restaurant-originated solution package" based on this success story, aiming to invigorate all of Japan. What management strategy and vision do they possess?

Interview with President Haruki Odashima

(From left) President Haruki Odashima (Ebiyya), Mr. Masahiro Okumura

[Q1]

How did you introduce and utilize AI?

Until 2012, Ebiyā was a quintessential old-school diner using meal tickets and an abacus. With declining sales, there was talk of closing after 100 years and shifting to real estate management. Believing we needed to challenge ourselves, I decided to try "data-driven customer flow forecasting."

Back then, Ebiyā wasn't collecting any data, so we started by manually numbering meal tickets with pencils and entering the number of tickets issued to customers into Excel.

About three years later, I independently developed a machine learning AI to analyze correlations between the accumulated data, weather information, and shrine visitor counts. Then in 2017, I introduced image analysis AI. It automatically tracks not only the number of passersby in front of the shop and the number who enter, but also their age, gender, and even the number of smiles.

Today, the system automatically forecasts tomorrow's customer count and menu demand. Its accuracy rate stands at 91.3%. It also analyzes how a 1-degree temperature rise boosts soda sales and how storefront displays affect entry rates and revenue.

As a result, profits have increased tenfold since 2012, and our Tabelog rating has risen from 2.8 to 3.5. Our attached souvenir shop now sells products developed based on AI analysis.
This summer, Ebiyas case study was featured as the grand finale at Microsoft's conference in Las Vegas (Ebiyas AI utilizes Microsoft Cognitive Services), drawing global attention.

I've rarely seen such high-precision customer analysis, even among major corporations. The speed at which they integrate marketing data into the field is also incredible! (Okumura)

 

The office on the second floor of the store has an atmosphere unlike that of a traditional shop.

【Q2】

How do you perceive the value of AI in the service industry?

Even in service industries, using AI for efficiency... At its core lies my belief that eliminating all waste enhances two things: "the quality of hospitality for customers" and "the satisfaction of employees and producers involved in the work."

Regarding hospitality, for example, our cafeteria anticipates daily menu orders, ensuring meals are served within 10 minutes. Given the time constraints of visiting Ise Shrine, this precious "time" is a crucial element of hospitality for tourists.

Furthermore, this allows staff to shift their focus from routine tasks to interpersonal communication. On hot days, we can offer ice-cold towels or present origami, providing value that money can't buy. Ultimately, I envision a world where staff can say, "Since we have time, let me show you around Ise Shrine."

Regarding "employee and producer satisfaction," accurate visitor forecasts enable precise staffing, creating a situation where we can increase staff time off while raising wages. Our next goal is to establish a system where every employee can take one month of vacation annually.

Furthermore, reduced waste risk cuts procurement budget waste, allowing us to maintain good relationships with Mie's food producers without haggling over prices. This leads to better ingredients, which delights customers and boosts ratings... creating a virtuous cycle. We're also experimenting with an automated ordering system that doesn't burden producers. Creating smiles for everyone involved is what we believe to be the true value of AI.

For rural areas, the big question going forward will be "What can we offer tourists to take home?" The experiences that can be created through Local × IT could provide valuable insights for many regions. (Okumura)

 

Employee Voice / Shinobu Akiyoshi

The more efficiency gains we achieve through AI, the easier our work becomes. But beyond that, it gives us time to think about what we can do with that extra time and how we can demonstrate our own value. We can try new things, which boosts our motivation to work. That's why we staff feel we can provide genuine hospitality with smiles!

【Q3】

What is your vision for the future use of AI in business?

We recently launched a company called "EBILAB" to provide solutions developed through Ebiyo's operations to the retail and food service industries. Our key feature is providing "solutions born from the field perspective" at "low prices." For example, our BI tool costs ¥25,000 per month, and our image analysis tool costs ¥10,000 per month. This stems from our own frustrating experience when we tried to adopt AI—the systems we wanted cost over ¥10 million, making them prohibitively expensive.

Currently, the retail and food service industries in regional areas are struggling with declining customer numbers and labor shortages. We want to share Ebiyo's story to inspire them: "Don't give up just because you're in a regional area."

That said, we don't aspire to rapid business expansion. We want to be a company that prioritizes density – the happiness of our employees and everyone connected to us. Simply put, we love the comfort of Ise and don't want to spend more time away. There are no crowded trains, and we have surfable seas. Ultimately, the purpose of AI adoption isn't just to boost sales, but to enhance the company's quality, thereby increasing satisfaction for both customers and employees.

Finally... (by Okumura)

I first learned about Ebiyaya from a Facebook timeline post. I wanted to understand the source of the innovation happening at this local, long-established eatery, which led me to visit for an interview. I deeply resonated with Mr. Odashima's philosophy: AI is merely a tool, and the value of Ebiyaya lies in transforming the efficiency gained through AI into enhanced hospitality quality for employees. Simultaneously, the fact that AI doesn't take away jobs but rather divides tasks, thereby increasing employee satisfaction at the same time, is truly a wonderful corporate culture. It was truly surprising to learn that employees can use their freed-up time to acquire AI and IT skills and even develop things themselves.