Luxury in Japan: Top sales strategies

It’s a Friday afternoon in Tokyo’s Ginza district, and the Grand Seiko clock that towers over the main Chuo Dori shopping avenue chimes 3pm. A large family of Chinese tourists steps out of the Hotel Gracery to wait for a taxi to the airport, shopping bags from Maison Margiela and Dior in tow. It’s a familiar scene in Japan’s luxury shopping district, where record numbers of inbound tourists — attracted by the weak yen, vibrant retail landscape, and exceptional customer service — have come to see, eat, and spend. “The main word in the mouth of the tourists when they come to Japan is ‘cheap,’” says Loic Bizel, a French consultant and seasoned market expert who works with leading international brands in Japan. Amid the broader luxury industry downturn, the Japanese market has remained remarkably stable. Last month, LVMH reported a 11% drop in Q1 revenue in Asia (excluding Japan), while Japan saw a decline of just 1%, underscoring the market’s resilience. “A lot of companies are looking at Japan now,” says Keiko Kihira, a managing director and partner at Boston Consulting Group (BCG) in Tokyo. “The political situation here is also stable compared to other countries, and people’s preferences are not changing dramatically. It’s a good market.” Bizel agrees. “It’s a big time [for Japan]. When companies do business here, they know that the return on investment will be good.” Kazuki Toyoda, managing director of Toyoda Trading Co. Ltd., a 42-year-old family business that serves as a distributor in Japan and mainly works with Italian brands like Stone Island and Lardini, also remarked on the shift. “If Western people want to travel to Asia, for sure Japan is now the most attractive and interesting country,” he says. “Shopping, food, fashion, there are a lot of different reasons to come here.” Mix in the favorable exchange rate, and things feel practically ideal — at least for the tourists. The downsides of overtourism While the influx of wallet-wielding visitors has benefited luxury brands, it has also brought new challenges. Overtourism has become a buzzword in Japan in recent months, with rising frustration fueled by incidents such as tourists harassing geisha in Kyoto or blasting loud music on the Tokyo metro. “Before Covid-19, when inbound tourism was strongly growing, [brands] focused on appealing to tourists,” says Kihira. This led to a hiring push for Chinese- and English-speaking staff, boosting sales from tourists but leaving loyal Japanese customers feeling neglected. As a result, brands have become more cautious. “There’s now a feeling that they shouldn’t shift too much towards the inbound tourists,” she adds. According to Bizel, locals are now venturing away from the main shopping hubs, preferring department stores like Yokohama Sogo or Futagotamagawa Rise that are away from the tourist throngs. “They try to escape a little bit,” he says. In March this year, Toyoda Trading opened one of its Gente di Mare select shops in the well-heeled neighborhood of Aoyama-Itchome. Removed from the main shopping avenue but still conveniently located, it has proven to be the perfect spot to attract affluent locals. “The people living and working there are people with high salaries. [The store] is already doing well, and we see a lot of potential here,” Toyoda notes. In fact, only 5% of the new store’s sales come from inbound customers, compared to 40% at the brand’s Azabudai Hills store, a new luxury mall complex popular with tourists. “We think it is important to see the inbound share as an additional part of the business,” he adds. “A lot of inbound is good for the economy, but I think relying too much on this can be risky.” Winning back Japanese shoppers When it comes to selling to Japanese customers, having staff who are well-versed in the products is essential, as they value omotenashi — the art of thoughtful service and hospitality — as well as craftsmanship. “Japanese people like to have a lot of information [about what they’re buying],” Meg Uchida, CEO of M. Incorporated, a leading PR company whose clients include Kenzo and Marc Jacobs, tells Jing Daily. “We want to know where the shoes were made, what’s the stitching and dyeing and that kind of thing.” For Uchida, standing out in Japan’s competitive market also means being well-informed about the brands she works with. “We have to be very clear in our communication, because we have more competitors here. It’s a more difficult job [than in other countries].” Toyoda has his Japanese staff travel to Italy—not just to visit stores and learn about brands, but to swim in the sea and enjoy gnocchi. The goal is for them to experience a lifestyle they can later share with customers on the shop floor. “Our final customers have a very high standard of living, and it’s important that our shop staff have enough knowledge and enough experience,” he explains. “Educating staff is one of the most important things for us and we are investing a lot into it.” Beyond education and world-building, another way brands can appeal to domestic consumers is by going more digital — an area Japan’s fashion market has struggled with. Gaisho, personal shoppers for VIPs unique to Japan, are a core part of department store strategies. They maintain direct channels of online communication with their highest-spending clients, typically over the messaging app LINE. “These exclusive lines of communication are a way that [stores] can handle both Japanese customers and the inbound tourists,” says Kihira. Strategies for emerging brands For emerging brands aiming to gain a foothold in the market, a long-term strategy is crucial. Gentle Monster, the buzzy Korean eyewear brand, is one of Uchida’s clients — their relationship began almost two years before the brand opened a physical retail store in Tokyo’s Aoyama district. Preparation included seeding sunglasses to influencers and distributing press releases about store openings in South Korea, which helped build brand awareness in the Japanese media. Securing the right stockists is also key to success. Applied Art Forms, an Amsterdam-based brand by Guy Berryman was picked up at a showroom during Paris Men’s Fashion Week by buyers from Dover Street Market Ginza. The utilitarian-minded brand, which produces much of its product in Japan, is a natural fit for the market. Attracting such a high-profile stockist played a pivotal role in establishing trust across the region. (Berryman, who is the bassist for Coldplay, snagged the stockist purely on the merit of his designs). “It’s a very influential store, so a lot of other brands will base their [buying] decisions on what’s happening here,” says Berryman. Over the past few seasons, Applied Art Forms has grown its stockists across Japan to eight — more than in any other region — making up 35% of its overall business, reflecting the strong opportunities within Japan’s retail market. During a product launch event at the DSM Ginza store last month, Berryman showed off a black workwear jacket from the Applied Art Forms’s new artisanal Canal House Line (C.H.L.). Handmade in Amsterdam with patches of antique Dutch fabrics sewn around the pockets, it retails north of $3,500; the creative director hopes it will do well in Japan. “We put a lot of detail into our clothes, and here people will point out a detail and say how beautiful it is, whereas in other countries that just kind of gets lost,” he says.

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How to sell luxury in Japan: From tourism to omotenashi

How Bottega Veneta weaved China’s forever it bag