Marketing your products and services
Market entry
In Japan, department stores will usually want to see established sales in Japan before taking on a new designer. Select shows purchase direct from fashion designers, but also from local agents and distributors.
Visual marketing tools are important in the decision making process. Importers/retailers will check websites, look books and samples. Buyers prefer to see look books from several seasons to see the consistency of design. Buyers also like to know the names of, and web links to the retailers the design is being sold, not only in Australia, but also in other export markets.
Buying season is January to March for September (fall/winter) delivery, and August to October for February (spring/summer) delivery.
Australian design is gaining appreciation amongst select shop buyers and whilst some buyers will attend Rosemount Fashion Week, it must be noted that the timing of the show is very late in the Northern Hemisphere buying schedule.
Japanese buyers prefer to travel overseas to major trade shows in Europe and North America to conduct their buying. They prefer to purchase in environments, which allows for comparison with other brands.
International fashion trade shows popular with Japanese buyers are as follows:
January:
Bread and Butter Berlin
Premiere Class (Paris)
February:
Premier Vision (Paris)
Magic (Las Vegas)
Ready to Show (Milan)
London Fashion Week
March:
Premier Class (Paris)
Rendez-vous (Paris)
Tranoi (Paris – designers and accessories)
June:
Tranoi Paris Fashion Show (men’s)
July:
Bread and Butter Barcelona
August:
Magic (Las Vegas)
September:
Premier Vision (Paris)
October:
Tranoi Paris Fashion Show (women’s)
With travel budgets being cut back, Japanese buyers are becoming more specific about the fashion trade shows they attend; however, most agree that fashion shows in Paris will be their preferred venue of for overseas purchasing.
For Australian designers, creating a meeting schedule with buyers in Japan can be challenging due to:
- Buyers travel commitments
- The Australian selling season
- The expense related to borrowing showrooms in Japan
We recommend that Australian designers serious about exporting to Japan consider showing at international fashion trade shows; in this way it is also possible to gain exposure to buyers from around the world.
The following trade shows are conducted in Japan; however, participation is usually limited to Japanese designers. Japan Fashion Week in particular was established to raise the profile of, and expand marketing channels for Japanese designers. This initiative spearheaded by the Ministry of Trade and Industry saw a recent substantial cut in funding as a result of the change in government in Japan in 2009.
Japan Fashion Week: B to B – www.jfw.jp/en/index.html
Tokyo Girls Collection: B to C – http://gw.tv/tgc/
The following trade show is more open to a relatively wide variety of fashion items, including apparel, accessories, bags and footwear.
Rooms: www.roomsroom.com/en/index.html
When participating in trade shows in Japan, it is necessary to understand that Japanese will rarely place an order at the booth and follow-up meetings are necessary to establish a proper relationship and gain sales. Therefore, participation at tradeshows is recommended to designers who have sales agents/distributors in Japan, or, have the capability to conduct follow-up marketing after the show, in Japanese as much as possible.
For baby and kids fashion the following trade shows take place in Japan:
Market entry strategies
In order to target select shops and department stores, market entry strategies to Japan include:
- Appointing a representative (will take orders from retailers, but will not collect money from the retailers. A representative will not warehouse your products).
- Appointing an agent (will take orders from retailers and will collect money from the retailers on your behalf. An agent will not warehouse your products).
- Appointing a distributor (will take orders from retailers, collect money and warehouse your products.)
A Japanese representative will understand how to present your products most efficiently, and how to place the product in the market. This is a skill that is accumulated over time and with long-term exposure to the Japanese market.
Finding the right partner is one of the most challenging issues an Australian exporter will encounter in entering the Japanese market regardless of industry segment. In the fashion industry, the agents and distribution companies tend to be small and have a limit on the number of brands they are able to handle. It is important to check which other brands they represent in order to avoid a conflict of interest.
Most agents work on a 15-20 per cent margin, and the retailer will have significantly more. As a general rule of thumb, the imported Australian product is usually sold at about 3.5 times the ex-factory price. Buyers often make their purchase decision on the above and then comparing it to other similar brands/products already sold in the market.
Japanese companies prefer to receive look books and product samples rather than checking websites or CDs for brand information. Japanese, and of course use the Internet but brochures and look books make a faster impact and can be easily passed around the company and commented upon.
A company brochure should outline the values of your brand. The look book should have full details of all the products of the range. Pricing information should be provided separately.
A designer, whether selling directly to a select shop buyer or agency will have to include the following information in the presentation:
- What will be the value to the retailer of taking on your range?
- How does your range fit into their current offering?Who are the target consumers?
- How are you going to promote the product?
- Are you willing to alter the product to suit the market?
- Will the range be offered exclusively to the buyer’s company?
- Why are you better than your competitors – particularly from Australia?
- What is your competitive strategy?
Designers are recommended to allocate a budget for appointing a PR agency in Japan. Many fashion agencies and distribution companies have PR capabilities; most work on a separate fee base to conduct PR activities.
Getting media attention is crucial to brand building and growing sales in Japan; there are close to 30 magazines alone related to women’s fashion, each with a different concept and target demographic.
Table 1: Import fashion sales ration by distribution channel
|
2005 |
2006 |
2007 |
2008 |
| Department stores |
58 |
56.9 |
56.1 |
55.5 |
| Brand owned stores |
29 |
30.4 |
31.8 |
32.3 |
| Specialty stores |
8.3 |
7.8 |
7.5 |
7.2 |
| Franchise and other |
4.7 |
4.9 |
4.6 |
5 |
| Total |
100 |
100 |
100 |
100 |
(Source: Yano News, July 2009)
In Table 1, select shops are included in the category of specialty stores.
Whilst apparel sales at department stores have continued to contract for the past decade (Table 1), select shops have continued to post growth during this same time (Table 3). As can be seen from Table 1 they are still small in scale compared to departments but are the main entry point for new brands into Japan.
Table 2: Japanese department stores sales
|
No. of stores |
Total sales
(mil ¥) |
y/y% |
Apparel sales
(mil ¥) |
y/y% |
| 2003 |
288 |
8111.7 |
|
3212.2 |
|
| 2004 |
285 |
7878.8 |
97% |
3048.3 |
95% |
| 2005 |
281 |
7841.4 |
100% |
3015.2 |
99% |
| 2006 |
264 |
7770 |
99% |
2968 |
98% |
| 2007 |
278 |
7705 |
99% |
2894.8 |
98% |
| 2008 |
280 |
7381.4 |
96% |
2713.3 |
94% |
| 2009 |
271 |
6584.2 |
89% |
2339.5 |
86% |
(Source: Nihon Senken Shimbun: Fashion Readers 2010)
Table 3: Sales at Top 5 select stores
| Year |
Yen (mil) |
Year |
Yen (mil) |
| 1998 |
79,888 |
2004 |
174,284 |
| 1999 |
97,504 |
2005 |
195,695 |
| 2000 |
107,299 |
2006 |
224,315 |
| 2001 |
140,833 |
2007 |
247,622 |
| 2002 |
152,634 |
2008 |
253,310 |
| 2003 |
165,297 |
|
|
(Source: Yano News July 2009: Top 5 Select Stores are: United Arrows, Beams, Ships, Tomorrowland and Bay Crews)
Select shops are multi-label shops with clear concepts; the ratio of imported items is about 60 per cent, with the remaining 40 per cent are private brands developed by the shop. Select shops are keen to take up new brands and 30-50 per cent of brands replaced a year. Quality control and delivery dates are crucial to maintaining business relations.
Select shops will conduct internal trade shows at least twice a year to show samples to their corporate customers.
The top five main select shops in Japan are United Arrows, Beams, Ships, Tomorrowland and Bay Crews. As the corporate size of each select shop company grown in size (number of shops), the select shops are further segmented in categories such as gender/brand name/demographic.
Department stores prefer not to import directly from overseas and to deal with designers who have established a track record in Japan.
Online and catalogue retailing should be limited to fashion designers who have established their brand in the market. Middle to higher-end fashion items are positioned as quasi-luxury items. Consumers in this market segment still prefer to look and touch a product before making a purchase decision.
Japanese buyers prefer to deal with known agents, distributors and suppliers. Getting attention and responses through cold calls and unsolicited emails is difficult.
Other distribution channels in Japan are:
- General merchandise store
- Specialty store
- SPA = specialty store retailer of private label apparel
- Category killers
- Outlet stores
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