How is the Japanese Luxury Fashion Market Being Impacted by Digital Marketing Trends

How to use effective social media marketing practices to unlock the Japanese luxury fashion market

Posted By Jack Shaw

Being the number three market in the world for luxury goods, Japan offers plentiful opportunities for your luxury brand to capture market share. This post was assembled to support the needs of luxury fashion brands in the Japan market, whether they are new to the market and seek to build awareness, or have already established a reputation with Japanese consumers and want to improve conversion.

In the Japanese luxury fashion market, simply localizing a global marketing plan and learning about customer behavior is not enough. Your brand must also become familiar with Japan’s digital and social media landscape. This point is underscored by the rapid growth of online sales, especially in the Japanese luxury goods market, which is expected to reach one third of the total overall consumer spending over the next few years.

The following market overview and digital marketing tactics can both aid in building an approach to marketing in Japan and improve your existing activities. 

Table of Contents

  1. Overview of the Japanese Luxury Fashion Market
  2. Digital Strategy Tips for the Japanese Luxury Fashion Market
  3. Use Your Digital Marketing Savvy

Overview of the Japanese Luxury Fashion Market

A globe of world luxury fashion markets centered on Japan.
Though often overshadowed by the sheer size of the U.S. and the rapid growth of the Chinese market, according to Statista the  Japanese luxury goods market is the third largest in the world, generating USD$33B total revenue in 2021. USD$10B from the luxury fashion segment alone. With growth expected to slow after 2023, Japan’s market is projected to reach USD$40B by 2024, there are still plenty of opportunities for both market entry and growth, particularly in the fast growing prestige cosmetics and fragrances segment – which is closely connected to the luxury fashion market and often marketed to the same customer.

One of the most notable trends within the Japan market over the last few years has been the acceptance of online shopping by luxury consumers. In 2021, the share of luxury sales revenue coming from online e-commerce channels was over 20%, a figure expected to be closer to one third by 2025. No doubt this shift has only been accelerated by COVID-19 restrictions and a hesitation among Japan shoppers to go outside the home. 2020 saw Japanese average online spending jump 44% within a span of three months. Surprisingly, luxury shoppers tend to break down nearly evenly between desktop and mobile online sales.
There are several unique attributes of Japanese luxury fashion consumers which make integrated, omni-channel marketing approaches more strategically sound in this market. Japanese luxury fashion consumers tend to have a soft spot for well-known and prestigious brands. While these consumers tend to exhibit high brand loyalty, it can take time for new market entrants to build brand awareness. It is also worth noting that, as in other markets, the purchase cycle for luxury goods tends to be longer, leading to a greater emphasis on marketing strategies that embrace engagement and retargeting for consideration and conversion. The rest of this post will explore Japan’s digital landscape and address advertising options across multiple social media channels to build brand awareness, drive high-quality traffic, and convert users.

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Digital Strategy Tips for the Japanese Luxury Fashion Market

Japanese luxury fashion market consumer shops using their computer.

Japan has a unique digital landscape, when planning an effective strategy luxury fashion brands should understand the advantages offered by various platforms. In Japan, the messaging app known as LINE by far has the largest user base, an estimated 70% of the Japanese population use the app monthly. The platform with the second highest number of monthly active users is YouTube. Japanese audiences of all ages have a high demand for video content, and it goes without saying that YouTube is a vital tool for reaching customers. Other options to consider are Google Ads, Facebook and Instagram. As will be discussed later, Google ads allow marketers to reach luxury fashion customers in the consideration process based on the relevant search terms needed. The retargeting features offered by Facebook and Instagram (and actually most platforms these days) can be very useful as a way to improve conversion by reaching out to shoppers who may have started, but not yet completed a purchase. Next we will take a look at brand awareness options.

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Brands are Built from Awareness

LINE and YouTube are both excellent options for building brand awareness. The tremendous reach of LINE among Japanese consumers means that achieving brand awareness can be done at scale. The app’s primary ad formats come in the form of banner ads and engaging audiences with direct messages. YouTube’s video-based nature makes it well suited to enhancing a luxury brand’s general awareness and image through the use of reviews, unboxings, and product experience content.

Options for Improving Consideration

Over time the brand’s marketing focus will need to shift platform by platform down the purchase funnel. Next, let’s look at options for improving consideration. Google Ads have a strong impact on the customers’ consideration process. By reaching consumers when they have the intent to purchase, i.e. they are searching for a specific brand or product and where they can purchase it, brands can attract Japanese shoppers who are already in the mindset to buy luxury goods.

Google Shopping ads leverage rich product information and brand details to ensure luxury fashion goods are shown to users searching for similar merchandise.

Google Ads’ Search campaigns can be used to support consideration by reaching people making brand and product specific searches.

Finally, Smart Campaigns are great for location-specific advertising, and can be used to drive foot traffic to a traditional offline retail space, as well as website or online sales channel. It is also worth mentioning that Instagram’s recent Shopping feature is ideal for supporting the monetization of social content. Brand images and video content can be directly linked to an online storefront, helping to transition from consideration to conversion.

How to Convert and Retain Luxury Fashion Consumers

The mobile phone of a Japanese luxury fashion shopper with signs of high social media use.
Ultimately, for any luxury fashion brand in the Japan market to build a successful digital strategy, it will need to incorporate strong conversion and retention approaches. Retargeting campaigns are a great way to approach fashion customers who may have already interacted with the brand in the past, whether they have made a purchase or not. Like other platforms, both Facebook and Instagram offer solutions for doing this through a number of different retargeting options.

However, Facebook and Instagram can boost conversion one step further than competitors by showing ads to users who have taken actions like putting items in an online shopping cart but not completing a purchase, or partially entering payment information. These ads can be further aligned with the purchase cycle by being shown to visitors closer to the time of the targeted action. For example, users who have looked at the product page for a handbag within the last 14 days will be shown an ad for it the next time they log into these social networks. An important distinction between the Facebook and Instagram platforms in Japan is the demographic breakdown of their users. Facebook users tend to be older​​, more than 80% of Japanese Facebook users are over the age of 30, and with higher disposable incomes. This group aligns with the typical luxury fashion brand consumer.

Instagram has a younger and more female user base, with nearly half of its users being under 30 and 60% female. It is also worth noting that there is a strong interest in fashion related instagram content. There are over 23 million posts with #fashion in Japanese, and in Japan users are three times more likely to view product details from shopping tags in posts than the global average.  

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Use Your Digital Marketing Savvy

While there are many challenges for luxury fashion brands in the Japan market, there are equally great opportunities, particularly for marketers willing to build a savvy brand strategy. 
Whether a brand is a new entrant to the Japan market or is striving to grow; goals of building brand awareness, leading consideration and improving conversion and retention do not have to feel impossible.  
You may also want to read some of our other posts on marketing in Japan.

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