Expert on Japan Retail and Consumer Markets, JapanConsuming

Michael Causton

Expert on Japan Retail and Consumer Markets

Real Insight on Japanese Consumer Markets

JapanConsuming

JapanConsuming is a specialist research firm producing intelligence on Japanese retail and consumer markets. Founded in 2000, JapanConsuming has become the leading provider of insights on Japanese retailers and consumer trends to retailers, brands, government agencies and investors. As well as a highly regarded monthly report on the market, JapanConsuming produces in-depth reports on retail sectors, seminars on key trends and telephone consulting to investors on trends and retailers.

JapanConsuming was founded by Michael Causton and Roy Larke. 

Thematic (Sector/Industry)

<ul>
<li>Some Japanese department stores enjoyed record sales in FY2022 but the gap in performance accelerated between city centre stores and the rest. </li>
<li>While numerous regional properties continue to struggle, the best exemplars of urban department store retailing are flourishing as they become true luxury emporiums for the wealthy.</li>
<li>Department stores have rarely provided growth in either sales or OP but there is now a chance that the better chains will emerge as quite profitable entities.</li>
</ul>


Some Japanese department stores enjoyed record sales in FY2022 but the gap in performance accelerated between city centre stores and the rest. 
While numerous regional properties continue to struggle, the best exemplars of urban department store retailing are flourishing as they become true luxury emporiums for the wealthy.
Department stores have rarely provided growth in either sales or OP but there is now a chance that the better chains will emerge as quite profitable entities.


The Great Divide: Isetan and Hankyu Break Records as Regional Department Stores Close

<ul>
<li>After the accelerated transition to digital channels during Covid, the fashion sector had a calmer year in 2022 although GTVs still grew around 10%. </li>
<li>Most retailers spent the time investing in more seamless and coherent omnichannel models, and in making the best use of stores and staff in online promotions.</li>
<li>This shift to omnichannel is also leading to changing merchandising, including pre-selling inventory, while others are turning their online stores into malls. </li>
</ul>


After the accelerated transition to digital channels during Covid, the fashion sector had a calmer year in 2022 although GTVs still grew around 10%. 
Most retailers spent the time investing in more seamless and coherent omnichannel models, and in making the best use of stores and staff in online promotions.
This shift to omnichannel is also leading to changing merchandising, including pre-selling inventory, while others are turning their online stores into malls. 


Japan's Fashion E-Commerce Evolving into Dynamic and Seamless Omnichannel, Winners Will Take All

<ul>
<li>Wealthy Japanese staying in Japan, more people acquiring wealth, a return of inbound tourists and better merchandising and store investment. </li>
<li>All combined to help department stores rebound strongly in 2022 but there has been a sharp shift in where department stores make their money.</li>
<li>Further growth is expected but only for some, and in some product categories much more than others.</li>
</ul>


Wealthy Japanese staying in Japan, more people acquiring wealth, a return of inbound tourists and better merchandising and store investment. 
All combined to help department stores rebound strongly in 2022 but there has been a sharp shift in where department stores make their money.
Further growth is expected but only for some, and in some product categories much more than others.


Japan Department Stores: Transformation Amidst a Recovery

Equity Bottom-Up

Isetan Mitsukoshi Holdings Ltd / Equity Bottom-Up

<ul>
<li>Isetan Shinjuku has always outperformed competitors by a large distance but the store’s management is intent on widening this gap further. </li>
<li>The key will be a focus on premium customers with ever more granular data sets to personalise marketing. 68% of sales now come from cardholders, compared to 50% in 2018.</li>
<li>While dependence on just a few stores makes <a href="https://www.smartkarma.com/entities/isetan-mitsukoshi-holdings-ltd" target="_blank" data-smartkarma-citation="entities:18871:1" rel="noopener">Isetan Mitsukoshi Holdings Ltd (3099 JP)</a> vulnerable to downturns – such as the loss of tourist traffic – these stores are also resilient.</li>
</ul>


Isetan Shinjuku has always outperformed competitors by a large distance but the store’s management is intent on widening this gap further. 
The key will be a focus on premium customers with ever more granular data sets to personalise marketing. 68% of sales now come from cardholders, compared to 50% in 2018.
While dependence on just a few stores makes Isetan Mitsukoshi Holdings Ltd (3099 JP) vulnerable to downturns – such as the loss of tourist traffic – these stores are also resilient.


Isetan-Mitsukoshi: ¥300 Billion from Just One Store

<ul>
<li>Like all department stores, Iwataya in Fukuoka is keen to grow services for its wealthiest customers. </li>
<li>It already has special lounges for high spending customers and has now opened a new, invitation-only lounge for its top 300 clients, many of whom are under 40.</li>
<li>Capturing more share of the wealth market is the only real hope department stores have to grow.</li>
</ul>


Like all department stores, Iwataya in Fukuoka is keen to grow services for its wealthiest customers. 
It already has special lounges for high spending customers and has now opened a new, invitation-only lounge for its top 300 clients, many of whom are under 40.
Capturing more share of the wealth market is the only real hope department stores have to grow.


Iwataya Opens Lounge S - A New Space for the Truly Wealthy

Japan

Isetan Mitsukoshi Holdings Ltd. is a holding company established through a merger of Mitsukoshi and Isetan. The group operates department stores nationwide, selling clothing, foods, household goods, cosmetics and general merchandise.

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Isetan Mitsukoshi Holdings Ltd (3099 JP)

The Great Divide: Isetan and Hankyu Break Records as Regional Department Stores Close

Japan's department stores have rarely provided good returns due to anaemic profit margins. This is changing with Japan's best chains and stores now...

Michael Causton

Japan's Fashion E-Commerce Evolving into Dynamic and Seamless Omnichannel, Winners Will Take All

Japan's fashion e-commerce sector offers major growth stories among both online malls and physical retailers making a successful transition to...

Michael Causton

Japan Department Stores: Transformation Amidst a Recovery

Department stores in Japan have rebounded to close to 2019 levels but the sector as a whole will return to genteel contraction once reached. Within...

Michael Causton

Isetan-Mitsukoshi: ¥300 Billion from Just One Store

Department stores have seen a remarkable recovery since Covid and the leading store, Isetan Shinjuku, more than most. Sales are expected to exceed...

Michael Causton

Iwataya Opens Lounge S - A New Space for the Truly Wealthy

Department stores in Japan are investing heavily in lounges and services to better attract wealthy customers. With the HNWI market one of the few...

Michael Causton

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52-week Range

Market Cap (USDm)

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