Green consumer demand applies to luxury brands as well
By: Debbie Howard
Since Japanese consumers drive 40% of global sales revenue for luxury branded goods, it is easy to see why luxury brand marketers put great stock in what these important customers are thinking and how they are behaving.
As mentioned in previous columns, the era of the “individual” is upon us in Japan, and this trend is changing the manner in which luxury brands approach and communicate with current and potential customers.
Parasite singles and affluent women will continue to drive category revenue. However, luxury brands that keep their pulse on developing trends may find that new segments and sub-segments can be nurtured beyond consumers who fall within previously captivated “luxury loyalist” customers as well as among those consumers whose interest in luxury branded goods may be declining.
Changes that are already impacting Japan’s luxury branded goods landscape include (1) decreasing importance placed on brand name per se, (2) stronger demands from luxury loyalists for deeper experience and service delivery from the brands they buy, (3) increased mixing of “high” and “low” priced fashion, and (4) strengthened demand for “authenticity” and rejection of Made in China manufacturing.
A fifth — and up until this time perhaps less evident — trend that we are hearing from consumers is what we are calling “the Emerald effect.” Japanese consumers are increasingly expressing and forming their individual identities through the brand experiences and products they choose, and as they further reflect on their consumption choices, they are inevitably demanding more. In short, many Japanese consumers are looking more toward “eco-intelligent” luxury.
As citizens of the world embrace the environment at all levels, Japanese consumers are also looking to decrease their carbon footprints. This is already occurring and is further fueled by Hollywood and the causes de celebre of global celebrities, all making an undeniable impact on global consumer trends. Today, celebrities and the super-wealthy are making statements as they trade in their luxury cars for the latest hybrid versions — predominately embracing Toyota, the Japanese manufacturer leading the hybrid technology revolution.
In Japan, the distant signals of green luxury are apparent as home builder Sekisui House marries quality, comfortably designed homes with ecologically sound communities — all at a premium price. Another early indicator that luxury branded goods are moving toward embracing the green message is evident in LVMH’s September 2007 global advertising campaign featuring former Soviet Union President and Nobel Peace Prize recipient Mikhail Gorbachev. Underscoring the campaign’s environmental protection message, Mr. Gorbachev waived modeling fees and LVMH instead made a donation to his environmental organization, Green Cross International.
Japanese consumers already demand traceability with imported food products, and it is expected that this transparency will further extend to increased consumer demand for ecologically sustainable and ethically sound labor practices to be woven into the brand stories of luxury branded goods.
Current global trends in eco-intelligent, “emerald” luxury will continue to influence Japanese consumers, leading to the natural institution by luxury brands of corporate social responsibility measures that address consumer sensitivities.
Debbie Howard is President of Japan Market Resource Network and Chairman of the American Chamber of Commerce in Japan.
Originally Published in Nikkei Weekly, 6th November 2007
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