Some new research has just been published by McKinsey about the decline in Japanese consumer’s seemingly insatiable appetite for luxury goods. Sorry, the article is subscription only.
Just look at the graphic showing the responses, by age, to the statement: “I prefer spending money on luxury experiences rather than buying luxury accessories, handbags, or apparel."
The manager of a leading luxury hotel in Tokyo told us that the vast majority of his guests are Japanese, including many Tokyo residents: “A large part of our customer base is 35- to 55-year-old ladies with money, so we are going after the same wallets as the luxury manufacturers are.”
Meanwhile, luxury goods are losing their lustre. Across demographic groups, one-third of all consumers—and as many as 43 percent of those 55 or older—agreed that “owning luxury goods is not as special as it used to be.” Only 32 percent of the respondents said they were “very” or “somewhat” interested in luxury products, compared with 51 percent in the same survey in 2004.
I reckon this is a universal trend that isn’t going away, anytime soon. Companies had better get to understand what it means to their business.
Image source http://www.flickr.com/photos/ehacke/3664871019/