Recognized as the second-largest retail market in Asia, Japan has always been a popular shopping destination. The retail market attracts visitors from all over the world with popular Japanese brands offering unique products across multiple categories including pop culture, beauty and skincare, electronics, fashion, and more.
Considered a complex market like China, consumerism in Japan is heavily influenced by pop culture and trends. TV advertising is still considered one of the most important methods of increasing brand awareness. entertainment and shopping districts. With such a promising market, retailers wanted to invest heavily in Tokyo before the Tokyo Olympics 2020. A large-scale event like the Olympics would have been ideal for retailers and advertisers to try to gain market share or attract visitors. But due to Covid-19 and the Olympics being held with lockdown-like restrictions, there was an adverse impact on footfall to stores and reduced spending due to the ban on foreign visitors.
The pandemic has significantly changed consumer behaviour across the globe. But what does it mean for a traditional market like Japan? We studied how consumer behaviour has changed in Tokyo from before the pandemic to during the pandemic.
Shifts in Consumer Behaviour
We tried to answer key questions, such as:
- Which brands in each category performed well
- What were the consumer demographics of the visitors to these stores during the emergency period
- Whether the Olympics led to increased spending or footfalls
Graph: The graph illustrates the increase/decrease in footfall to stores in Tokyo during the emergency period (July 23, 2021 - Aug 8, 2021) compared to before the emergency period (June 29, 2021 - July 15, 2021)
Below are the top three brands from each category:
- Fast Food: KFC, Wendy’s and Domino’s Pizza
- Retail Stores: My Basket, Uniqlo, and ABC- Mart Inc
- Bars & Pubs: UoTami, Torikozoku and Yataizushi
- Shopping Malls: Ecute Tokyo, Ecute Akabane, Wing Takanawa East
- Sports Arenas/Stadiums: Komazawa Olympic Park Sports Ground, Machida Central Park, Fujitsu Stadium Kawasaki
- Travel and Public Transport: Tochomae Subway Station, Nishinippori Eki, Tohoku / Joetsu
Looking at the brands that attracted visitors despite the restrictions, consumers in Tokyo seem to prefer large and spacious stores that were conducive to social distancing requirements. While the absence of foreign tourists and visitors to the Olympics did impact spending, the Covid-19 restrictions created a unique opportunity for Japan to push for online sales in a market that has traditionally focused on attracting visitors to stores.
The constantly changing conditions mean that businesses and consumers need to be able to pivot quickly. Retailers have to attract visitors to stores as cities reopen but also push for online shopping when Covid-19 cases see a surge.
We studied the demographics of consumers who visited Asics stores in Japan before and during the state of emergency and the data confirms that older age groups were more likely to prefer offline shopping compared to younger age groups. Since Asics was the official sponsor in Japan for the Olympics, there was significant advertising and marketing promoting the brand.
Graph: The sum of the percentage increase in visitors from the 35+ and above age groups to Asics stores during the emergency period was a significant 7% more than that for younger age groups. Footfall from the Students and Professionals groups increased significantly compared to others.
From the trends we have seen influencing buying behaviors, we can conclude that the following are the key influences that businesses need to consider in strategic decision making:
- Covid Restrictions
- Adaptability to pivot to online/offline
- Age Group
- Product category i.e., essential vs general merchandise
- Store location
The Way Forward
The pandemic has completely changed the way consumers shop, whether for food or for clothes. We are seeing an increase in purposeful buying as people prepare for uncertainties with economic instabilities and a fluctuating job market. Shoppers are more mindful of safety and this means consumers prefer stores providing a wide range of product categories so that they can limit the number of visits they have to make. But at the same time, consumers do not seem to be eager to visit malls which might provide multiple brands under one roof due to safety worries. When it comes to fitness too, home gyms and open spaces like parks have become more popular.
The need of the hour for businesses is to partner with a data company that can provide actionable insights based on real-time shifts and changes in consumer behaviour. Businesses need to be able to pivot as fast consumers are able to. With the general consensus being one of cautious optimism for the future as vaccination rates increase but new strains of the Covid-19 virus continue to cause disruptions, actionable insights can help businesses to faster adapt to changing situations.