By: Debbie Howard
When I first came to Japan twenty-two years ago, the Japanese consumer was obsessed primarily with two things — “brand” and “country of origin.” The brand had to be traditional and most likely high prestige as well. And the country of origin preferred was overwhelmingly Japan — unless the product was a high-end luxury brand, in which case, the more European the better (preferably French or Italian). However, shifts in society and the way that Japanese consumers view themselves are now working their way into tastes and preferences for brands as well.
There has already been an adjustment in the definition of “value for money” among Japanese consumers — and this adjustment will most certainly continue and become even more pronounced. Specifically, Japanese consumers have become more interested in “value for money” when they consider buying things. As part of the global trend towards polarization of purchases at the high and low end, Japanese consumers are beginning to embrace the mixing of “high” and “low” in their lifestyles — i.e., high high quality, and low low price — including fashion items.
“Value” has become the driver that decides what is ultimately purchased. The popularity of “99 Yen Shops” and mass market (yet still fashionable) retailers such as Uniqlo are but two examples of this.
As a result of this overall adjustment in attitudes towards value for money, images toward “luxury brands” are also shifting. Today’s more confident consumers are less likely to try to impress others with the purchase of a particular brand, so for many, “brands” are becoming less aspirational than in the past. More importantly, expectations are quite high among those consumers who do decide to focus on a particular brand — not only for product quality, but also for the “experience” of purchasing, ownership and aftercare.
What does this mean for companies marketing high-end luxury brand goods to Japanese consumers? In short, “luxury brand” marketers are having to work harder to attract and maintain the attention of Japanese consumers, as consumers become more self-confident and less likely to need to “prove their worth” with ownership of a particular brand.
We can see this trend in the proliferation of “bigger and better” marquis brand shops not only on the Ginza, but also in Harajuku and Maranouchi as well as other key trendy consumer gathering spots.
We can also see this trend in the aggressive expansion of brand shops into restaurants, tea shops, spas and other “brand experience” activities that are meant to create more meaningful relationships with consumers on behalf of the brand. Clearly, brand marketers must establish and secure relationships with consumers here in Japan so that when Japanese consumers travel overseas, they will want to visit their shops in other locations.
Importantly, this trend is already relatively well-entrenched, seen not only among obvious leaders such as Japanese beloved brands Louis Vuitton and Chanel, but also among any brand that wishes to capture Japanese consumer attention both in Japan and abroad — such as Gucci, Prada, Ralph Lauren, Coach and others.
Debbie Howard is Chairman of CarterJMRN and President Emeritus of the American Chamber of Commerce in Japan.
Originally Published in Nikkei Weekly, 27th August 2007
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