When Teddy Roosevelt sent the “Great White Fleet” on its power trip around the world in 1908, Americans began to view this big marble as their plaything, to do with as they wanted.
Since then, the U.S. often had its way whenever it went abroad. But not always. And certainly not always for U.S. retailers. In the 1990s, Wal-Mart badly miscalculated the Mexican market. Too many Mexicans had small refrigerators, no cars and their own particular shopping habits. They preferred daily trips to the marketplace rather than weekly fill-the-trunk expeditions. All the things that had made Wal-Mart successful in the U.S. failed it south of the border – especially the homework it didn't do.
What a lesson to the retail community: If Wal-Mart could misjudge so badly, everybody else better know what they're getting into before they jump. And, in fact, translating the U.S. culture for a foreign marketplace is one of retail's major obstacles. (By the way, it's not only foreign marketplaces overseas. Did you see the recent census figures? More and more of our urban communities are Latino, Asian, Middle Eastern, African and Eastern European.)
But sometimes, retailers learn oh-so-slowly. American warehousers and mass-discounters are currently testing the Japanese market. On one level, it would seem to make sense. Japan has been stalled in chronic recession for more than a decade. Store sales – which account for 60 percent of Japan's GDP – have declined for 45 consecutive months.
So here come Costco and Carrefour and Wal-Mart, offering deep cost-cutting. They're also offering massive packages, towering displays, pure open-sell and less-than-glamorous brands. The stores are vast, the merchandising dense, the aisles wide, the shopping carts cavernous.
But the shoppers they're after are known for hunt-and-peck shopping for prestigious Western labels, no matter the pricetag, and demanding what one analyst called “geisha-like service.” They have smaller homes, eat smaller meals and generally travel by subway. Not exactly conducive to grabbing a 24-box package of mac and cheese off the shelf.
However, the Japanese may also be getting price- and bargain-conscious. “We're not so interested in the packaging or the way things are displayed,” one shopper was quoted as saying. “These days, what is most important is price.” Maybe, maybe not. A Japanese retail consultant said, “The people who give priority to low prices are only one segment of the population.”
Nonetheless, local retailers are joining the trend. Uniqlo, an apparel retailer, doubled its sales last year by under-pricing The Gap. And there's the spread of 100-yen shops (think dollar stores) and early-bird specials at restaurants.
Then is the Japanese consumer really giving in to the bad economy, to prices over Prada? Two words come to mind: cheap chic. If bargain-hunting and price-clubbing become stylish, look for the image-conscious Japanese shopper to drop Gucci and sign up for her price club card!
Setsuko Kiuchi Hansen, Japan's leading visual merchandising consultant, will be a speaker at VM+SD's upcoming International Retail Design Conference, October 28 – 31 in Orlando. She'll provide penetrating insights into the Japanese retail marketplace.