Japan is renowned as the mecca for luxury goods. But now, Japanese consumers are now feeling the pinch thanks to new tastes and a super strong yen. Due to this, sales in traditional flagship & department stores are declining. Online shopping for luxury goods has, however, increased. Along with this, shopping at U.S.-style outlet malls in Japan is also soaring.
According to a recent survey by McKinsey & Company, premium outlets in Japan today account for 23 percent to 29 percent of purchase frequency in luxury fashion apparel and leather goods/accessories. Steep cuts in highway tolls have helped further. Mostly, Japanese consumers are tired of paying high prices in traditional shopping districts when the same products can be purchased online at discounted rates.
With the yen now hovering at 83.9 against the dollar, Japanese consumers are increasingly discovering that it does not appeal to them to pay the “Japan premium” for goods that can be found inexpensively online and overseas.
Some examples: a pair of fierce Jimmy Choo Feline elaphe snakeskin trim sandals cost 131,250 yen in Tokyo, or $1,572 at the current exchange rate. The same pair in the U.S. costs $1,095. Prada’s leather bow pumps are 73,500 yen in Japan, or $880, compared with $650 in the U.S. Abercrombie & Fitch’s men’s McLenathan Bay sweater sells for 25,000 yen, or $296.42 at the current exchange rate. In the U.S., the same sweater costs $170.
The Japanese shopper is tired of being ripped off and now feels that buying online or shopping in the U.S is a better proposition for them.
