With its reputation for an intriguing mix of tradition and modernity, Japan has long held a strong allure around the world. That's arguably never been truer than now, with tourism witnessing explosive growth in the last few years.
In 2015, just under 20 million visitors, 17 million of them tourists, went to Japan, according to the Japan National Tourism Organization, an increase of 47 percent on the year before. Leading that wave has been Asian visitors, particularly those from China, with the former constituting 84 percent and the latter 25 percent of the total last year. And growth has continued briskly in 2016, albeit at a slower rate, with provisional figures from January to May showing an increase of 28 percent in the number of visitors.
The money that those tourists bring into the country has become an important economic contributor, especially as growth and consumer spending remain sluggish. Indeed, the term bakugai, which literally means 'explosive shopping' and typically refers to the rampant spending by Chinese tour groups, shared joint honours as Japan's buzzword of the year for 2015.
But tourist shopping habits are changing as those different demographics become increasingly complicated in their desires. As a result, the days when tour groups busy themselves stocking up on Japanese cosmetics, medicine and rice cookers, at least at their current scale, won't last forever, particularly as cross-border ecommerce becomes more prevalent. In June, Japan's Ministry of Economy, Trade and Industry estimated that by 2019 ecommerce of Japanese products in China would reach ¥2.34 trillion ($22.8 billion). And a stronger yen means the products are not as affordable as they once were, making mass-market goods less desirable.
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Already this is beginning to manifest itself. Figures from the Japan Tourism Agency show that in 2015 average expenditure on shopping by Chinese tourists was ¥171,870 ($1,700), but by April to June of this year that had fallen to ¥130,185 ($1,300).
"What Chinese people wish to experience in Japan are such things as nature and picturesque scenery, and Japanese cuisine, which rate ahead of shopping," says Dentsu's Team Cool Japan via email. "We expect to see an accelerated shift from interest in material things to interest in experiences and activities."
To an extent that is moving them towards their US and European counterparts, and as they and their fellow Asian tourists make the transition to prioritizing experiences over shopping, brands will have to become smarter in order to guarantee their piece of the action. While existing initiatives to appeal to Chinese tourists—such as hiring Mandarin-speaking staff, offering tax-free purchases and adding support for Tencent's WeChat Pay—aren't going to become irrelevant, marketers can't rest on their laurels and expect the same easy flow of cash that tourists to Japan have become known for.
For brands, that might well mean helping to shape and guide that experience, perhaps in a similar vein to what Louis Vuitton has done with its city guides.
"The guidebooks are like...a personal invitation from the brand to experience the city in a completely different light," says Aria Aoyama, international PR manager for the Osaka Convention and Tourism Bureau, noting that this is something that government agencies such as her own could potentially assist with.
"I think [offering local information is] one of the keys of Airbnb's success for example," says Marc Wesseling, director of UltraSuperNew, a Harajuku-based creative agency. "You're staying with locals and they can help you with the local restaurants or where the local bars or pubs are. There's an opportunity there [for brands] to be like the concierge, to provide information and help."
This kind of advice and insight is arguably all the more pressing for tourists given that part of the appeal of the country, and also one of its frustrations, is how its shops, bars and restaurants can be tucked down small lanes and alleys, or once found are hidden, sometimes intimidatingly so, behind opaque sliding doors and the noren fabric that covers the doorway. For Wesseling, this could be in the form of a beer brand's guide to bars, clubs and events, and which inevitably would push towards those establishments that stock the beer in question.
But brands should nonetheless need to give proper consideration to their category and their positioning, in some cases being mindful not to lay everything out on a plate. After all, if destinations become too obvious, it will run counter to the kind of exclusivity that is going to appeal to the kinds of independently minded travellers who are increasingly making their way to Japan's shores.
"Part of the enjoyment of travel, and shopping as part of that, is discovery, and even the research and effort that goes into that," says Chris Francis, managing director of Flamingo Tokyo. "Particularly for younger travellers, status is increasingly about rarity rather than price."
But brands can also play a more direct role in offering tourists unique experiences, for example, the factory, brewery and distillery tours offered by Mazda, Asahi and Yamazaki whisky, respectively. Such brand experiences also have the advantage of playing on Japan's reputation for quality by educating consumers about the heritage and production process of the brand.
"We believe that this is a very effective way to bolster positive perceptions of a brand and builds consumer engagement," says Dentsu's Team Cool Japan.
These brand experiences might also take the form of enabling slightly more general experiences. In June and July, Heineken ran a series of 'Shape Your City' events in UltraSuperNew's gallery, providing not only a brand experience to Tokyo residents but tourists too. Through this, visitors were able to sample the city's youth culture, art and music, something that might be easier said than done, and come away with one of the beer brand's limited Tokyo city edition bottles.
As Dentsu's Team Cool Japan puts it: "The customer can retain an object that encapsulates a memory."
That plays into a wider point about how brands can profit from positive perceptions of Japan and the desire for tourists to come away with products specific to the country. In some cases, that can be about playing up the authenticity of the brand and its wares.
"There is a big boom now about Japan and Japanese quality and Japan is cool, that they can say that they're real, like take for example Japanese denim," says Wesseling.
But beyond authenticity, there are also opportunities for Japan-only goods too.
"The idea of some form of Japanese-derived exclusivity is still gold dust to many travellers. That could be made-in-Japan iterations of brands from other countries (like Converse); it could be limited editions, or things that are initially sold only in Japan, or available here first," says Francis. "That’s not new news, but the cultural cachet of Japan is on the up and up—perhaps some domestic brands are not quite as aware of that."
That might involve playing up something even more specific than national identity, from connections to cities and prefectures, all the way down to specific neighbourhoods, for example Tokyo's fashionable Harajuku and Nakameguro districts. And beyond giving the products in question a certain cachet for tourists, it also potentially opens the door to teaming up with government agencies.
"If they do create a product line that is associated or unique to Osaka, then we would be able to use that because it does promote the city in a way and [it does] create a much more targeted approach to, for example, Chinese tourists or Korean tourists that are coming through our website, which has a lot of traction and, two, it's considered a reliable source of information," says Aoyama.
But for Aoyama these sorts of collaborations can go beyond a brand raising awareness of a destination, and vice versa, instead working together to generate a particular perception of the locality. She cites the work of London & Partners (an organisation with the aim of promoting London) as both illustrating what can be achieved by such collaborations, but also the spirit in which they need to be approached.
"You have this association that it's not just that it's located there, but they did some conscious work together to expose the [the place to] tourists. It's not just 'let's come shopping', there's a very specific image associated to it," she says.
The sheer variety of tourists and the companies looking to reach them means that there can be no broad solutions. But for brands, finding ways to root themselves in the tourist experience of Japan, both in terms of the image and the experience of the country, will become particularly important as tourist tastes evolve.