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11.26.2011

Redefining Luxury in a Mature Market

This month's SPUR (fashion trend setting glossy monthly; circulation 113,000) has a whole section dedicated to redefining luxury. 





As I am now dealing with a brand who claims to own the "affordable luxury" space in fine jewelry (no, it is not an oxymoron according to the brand)
and we are mapping out the marketing and media plan for 2012, 
I have a very keen interest in this topic, 
not to mention that I believe it will become a core element defining consumer attitudes and the market in Japan in 2012.


Already two years ago, when WWD Japan ran a feature asking key trend making, influential people in the fashion industry 
"What would you buy if you won the lottery today?"
it was rather interesting to read that most of the people said, 
"I already own pretty much of what I wan that money can buy. What I really want today cannot be measured in monetary values."


For the longest time it feels like we have been saying that consumers today are cash rich and time poor. 


Especially in Japan, that has led to convenience being a key consumption driver. 


Leading underwear maker Gunze told me that their peak consumption time is around midnight in convenience stores - consumers realize just as they are going to bed that they have run out of clean underwear for the following day and rush to their neighborhood convenience stores to purchase a pair of underwear at full price. 


If you thought underwear sold best in discounted packs of seven - one for each day of the week - then think again. 


In SPUR, new luxury is defined as an attitude and a way of life.


Yes, being a fashion brand, it features brands like Loewe and trend makers like Tilda Swinton wearing Raf Simons in "Io sono l'amore," as well as Karl Lagerfeld's latest short film.


The headlines in the feature say,
"what we really want now is high quality daily clothing" or
"wearable art - fine jewelry" and
there is also a write up on Carine Roitfeld's book, irreverent and how she defines luxury as an attitude, which sums up the whole feature theme. 





When she speaks of luxury, she talks about time and travel. 
"to know what is valuable; knowing that some things like wine and crocodile skin are made of material that become better with time and to have that time to wait."
Personally, she says luxury for her is to be able to travel whenever she wants, so what she wants is a private jet!


Ordinary consumers will probably not go quite that far.


But with the scars from the 3.11 earthquake being still rather raw,
and the fear of radioactive contamination of food and water gripping many citizens,
luxury is about safety and knowing that the things one consume are safe. 


Where perhaps the affluent western consumer today buys organic food in hopes to enjoy a better quality of life as a result of eating better, 
the Japanese consumer will pay for safe food produced as far away from the nuclear reactor as possible. 


The shock of the massive disaster that came out of nowhere still has people valuing their loved ones and strengthening that bond with their loved ones. 


From spring through to autumn, bridal jewelry has been selling extremely well. 
And especially sales of engagement rings have picked up, where until the disaster, the market was dominated by couples going straight for the wedding rings and skipping the diamond (to save money as a reaction to the Lehman Shock).


Another luxury item seems to be time - and time spent with loved ones. 


I like asking my team point blank what motivates them, 
and more than a handful have said "spending time with family" or close friends. 


I believe that in 2012, any brand that is vulgar enough to push logos and icons will lose market share in Japan. 
Those who will rise are the brands that take the time to build a rapport with the customers and to offer them a sense of luxury not just in the quality of service (that is a given in Japan), the material, or the store, but also in the time they spend at the store be it online or off line. 


The Japanese consumer today is very sophisticated.


So brands won't be able to push products onto them just because they are branded. 
They can do that in neighboring China, where there are about 10 times more consumers who will be happy to devour such items. 


In this market, brands are going to have to work much harder to get a share of the wallet. 
And they must be mindful that the consumer here values intangible things as true luxury now - time, bonding with family and loved ones, and the experience. 

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