September 8 2020

Discretionary consumption bounces back in Japan

Highlights from JapanConsuming monthly report

News and Analysis on Japanese retailing and consumers

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July-August 2020 Issue

Essentials strong in May but in June discretionary bounces back

Retail sales slumped again in May, but only because people are not buying clothes, visiting department stores and shopping centres, or buying their lunches at convenience stores. Although this led to another major drop in total sales, several sectors did very well and in June there was a surge in spending at some specialty chains and a return to some semblance of normality for many.

Editorial: It’s not as bad as some think…

Aeon ends The Body Shop franchise

Aeon has spent the last five years divesting itself of its foreign franchises outside the food category. The latest and last of these is The Body Shop which Aeon has franchised for 30 years. The move is a further sign of Aeon’s far-reaching rationalisation of its business, creating a more focused retail conglomerate. For The Body Shop, the switch to direct operations is a major opportunity to rebuild the brand in Japan.

Muji expands channels with Lawson and major online malls 

Muji has had a busy few weeks. It is now trialling the sale of Muji product at three Lawson stores after ditching Familymart, its long-term partner, last year. Muji and Lawson will collaborate on the exact range and marketing but Lawson presents a major opportunity for Muji to expand its volume. Muji also opened online accounts with Amazon, Rakuten and Lohaco in the last two months.

IKEA Harajuku: made for Japan

IKEA’s first permanent small format store opened in Harajuku in early June and has been an immediate hit. Offering a wide array of small, take-home items, as well as a home-delivery ordering service, the store also introduces a ‘conbini’ and a new cafe. The small footprint is ideal for roll out across Japan and the second store is already preparing to open in just a few months time in Shibuya. Watch out Nitori.

Government fuels cashless payments war

In June, the government’s rebate scheme that simultaneously aimed to reduce the burden of its October 2019 tax increase while also promoting cashless payments, came to an end. But there’s more to come. The initial scheme will be replaced in September by an entirely new one, this time to promote the My Number citizen registration system alongside, again, cashless payments. It will also push payment providers to compete with ever more ferocity and, by this time next year, we are likely to see just one or two winners and a whole bunch of losers.

Zozo launches DtoC platform

Zozo’s plan to create a direct-to-consumer (DtoC) e-commerce platform and fund the brands sold on it is much more than just a major fashion retailer piling into the latest trend. Given the control Zozo will have over the brands, it is, in effect, revisiting its old ambition to launch private brands, creating both diversity to target different segments and a much less risky private brand venture.

Mitsui launches new SC brand

Mitsui is one of the best known shopping centre developers in Japan and its Lalaport brand one of the strongest. Mitsui also has a history of striking lucrative deals with city councils to exploit public spaces and has now launched a new brand called Rayard which will be used for malls that are built as part of a wider redevelopment of parks and other public facilities.

United Arrows comes out fighting with plans for major new chain

United Arrows has thrown off the trammels of Covid and issued a bold new medium-term plan that calls for numerous new initiatives. Despite issues with its online store late last year, the select shop retailer seems to have a clear vision of how to keep growing in a tough trading environment and, if it works, plans a major new mass market chain designed for global audiences that will take United Arrows close to the top of the apparel rankings.

Lawson relaunches private brand

Lawson has begun rollout of a completely updated private brand, along with new ranges of regional gourmet foods.

Konaka absorbs Samantha Thavasa

A dowdy suits retailer and a celebrity-endorsed bag and accessories brand with more than a hint of tackiness seemed like an odd pairing when the former bought a stake in the latter last year, but now the old man in the suit has wedded the young fashionista and hopes the marriage will be much more than the sum of its parts.

Failed e-commerce delivery rates cut by half during crisis

Delivering parcels from online stores has got a whole lot easier for Japan’s ever-valiant courier drivers. In the past six months, the rate of parcels needing to be redelivered has dropped by half. This figure will no doubt rise again once the crisis abates and people return to work, but the figure is falling longer-term as couriers and vendors all work on new solutions to alleviate the problem. The simplest is to avoid the issue altogether by just dropping parcels off regardless of whether there is anyone at home.

The Big Retail Review

Retail Ranking 2019: almost a great year

At least until the Covid-19 crisis hit Japan in January, the majority of retailers were gearing up to announce yet another really good year of financial results. Even with the crisis, results are generally better than for FY2018 – although there are big variations by sector. Those differences are more or less what we’ve come to expect, with traditional formats like department stores continuing to struggle, while those formats that have adopted modern management are doing well.

Retail Data: Tokyo department stores down 72% in May


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Kith opens in Japan

Philip Morris given record ¥552 million fine

Travis Mathew in Japan

Baycrews on Amazon, introduces live styling

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Costco plans three stores in 2021

Sleeping bra sales jump 5-fold for Wacoal

Takashimaya absorbs Okayama store, expects ¥18 billion loss

Amazon & Life expand netsuper

Matsumotokiyoshi continues to struggle

Retail masks

Ralph Lauren launches official online store

Loft opens 2nd dedicated cosmetics store

Charges introduced for plastic bags

Loro Piana opens new flagship in Ginza

Mori SC in Toranomon

Otsuka Kagu contributes to Yamada furniture sales 

TSI closes Natural Beauty Chain

Gas exits Japan

Matsuya borrows in response to crisis

More temporary employees working from home

New store uses facial recognition payments

Arcland Sakamoto swallows Viva Home chain

More stimulus with less cash, more home work


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