Japan’s department stores

One of the best examples of Japan’s rapidly changing consumer behavior is the Japanese department store.  Not so long ago, these major establishments were the ultimate symbols of luxury, quality and the very best in Japanese customer service.  It’s where, even today, you can expect to find everything from the finest luxury brand goods to some of the world’s most expensive fruit.  Japanese department stores are well-known for their impeccable amenities as well as their super-polite and service-oriented staff.  Elevator ladies push the buttons for you and sales staffs wrap all your packages like fancy presents.  You can sample some of the finest Japanese and foreign sweets and then make ticket or travel reservations and visit an art exhibition upstairs.

Falling fast

However, sales at Japanese department stores have been falling for years.  The things that once attracted shoppers are now driving them away.  Department stores are seen as overpriced, lacking in variety and merchandise, too focused on women, overly extravagant and out of touch with today’s consumers who want value, availability and convenience.  Japan’s worsening economy, increased competition from lower priced retailers (domestic and foreign), changing views on spending and new ways of shopping are major threats to the department stores who have failed to keep up.  While the stores may be crowded on weekends, most people are looking, not buying.  The basement food floors remain popular, but many visitors never go above ground.

Changes in shopping

Today, Japanese are much more likely to shop online, visit shopping malls outside central Tokyo, and buy from large discount specialty retailers (electronics, men’s suits, furniture, etc).  They are also giving fewer summer and year-end gifts that were traditionally purchased yearly at department stores.  In order to stay in business, department stores have had to come up with new strategies and services including merging with other stores (Daimaru & Matsuzakaya, Isetan & Mitsukoshi); closing European and US stores and concentrating on Asia (particularly China); remodeling flagship and large city stores; targeting new or different customers (shops for men or young people); leasing space to popular, low-priced brands (Forever21 in Matsuzakaya Ginza, Uniqlo in Shinjuku Takashimaya).  Daimaru Matsuzakaya is selling secondhand items from 250 brands on a special website and Seibu sells 7 Premium private-label food products of its parent company, Seven & I Holdings Co..  Will these moves be enough?


Among the many ailing department stores, Isetan seems to be one brand that is fairing a little better than the rest.  Isetan has the reputation of being one of the more fashion-forward and innovative department stores and has worked hard to differentiate itself and widen its appeal.  Their Shinjuku flagship store features a huge selection of the latest, hip Japanese and foreign brands (not just European luxury brands), has an entire building dedicated just to men, and an unrivaled and expansive basement food floor.  They also plan to introduce their own lower-priced brand in regional stores.  (However,even after visiting the Shinjuku store, which is clearly more popular than other nearby and nearly-empty competitors, it is still difficult to differentiate between the dozens of stores or to understand why the Isetan brand does well.)

Saved by the Chinese?

Recently, hundreds of thousands of Chinese have been coming to Japan not to sightsee, but to shop.  With suitcases full of cash, these shoppers are here to purchase expensive brand name goods, electronics and cosmetics in mass quantities.  While it’s difficult to measure if this trend will have any real impact on the industry or Japanese economy, it is definitely welcomed by the struggling stores who are hiring Chinese-speaking staff and accepting the Chinese debit card, China Union Pay to cater to these new customers.

Japanese department stores are clearly in big trouble.  Luxury, tradition and polite service are no longer enough to bring in customers.  These stores have to become more innovative and adaptive to the changing behaviors and attitudes of Japanese shoppers, which although difficult may be exactly what they need.


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