Trends in Japan

As the battle for wallet space heats up, retailers want customers to choose sides

Japanese shoppers don’t get much for their money when it comes to major retail sales, especially compared to their American counterparts who can look forward to days like Black Friday, when retailers compete at dangerously low price levels. In Japan, customers are rarely rewarded if they shop around for a bargain. What they are rewarded for, however, is loyalty. Point card programs can give back 10-20% in store credits or gift offers.

Most Japanese shoppers have at least one point card, if not a wallet full of them, and they vary from the basic stamp type to the more sophisticated contactless radio-frequency identification (RFID). Of the card-carrying public, more than 70% have one from an electronics retailer, by far the most common ahead of drug stores and supermarkets.

As consumers continue to be flooded with new cards, the emerging trend has been to consolidate multiple services into one card. This has led to fierce competition among retailers to snag card holders early on.

Bic Camera has led the pack by integrating its point program into Suica RFID cards, primarily used for train fare payments. Because consumers only need one train pass, once they adopt their chosen point program they’re less likely to switch. As a result, retailers are now competing across the industry for point card placement in prime wallet space.

These new electronic cash cards are also vehicles for introducing credit cards to the traditionally debt-wary Japanese by including a credit option that gives extra point incentives and effectively turns three cards into one.

Away from the hype and aggressive campaigns in the Gyre Building in Omotesando, which hosts Chanel and Bvlgari, a point program has been developed to suit the building’s clientele. Instead of offering discounts on purchases, a move that would damage Gyre’s image, customers earn points that can be converted into cash and donated to charity. Is there any other way to help save the world while buying a new watch? The building’s “Shop and Think” program, where customers touch their FeliCa- equipped phones to in-store terminals, is a more discreet way for the upmarket clientele to be enticed to use point cards.

Soon, all of our points will be stored and managed in our mobile phones, and that’s when the fun really starts.

Wallet

Michael Keferl is a Trend Scout for Cscout Japan, part of the global Cscout market research, Trend Scouting, and Experience/Trend Tour network. With a cross-industry focus on current and emerging trends in the rapidly changing Japanese market, their popular daily blog can be found at www.CscoutJapan.com

Magazine:

business