U.S. Cataloger Marketing in Japan-Far From Over (891 words)
U.S. Catalogers marketing in Japan May have been deflated by recession, but they are not defeated.
In the mid-1990s, direct marketers sought riches in Japan much like the miners of the California gold rush. The yen reached an all-time high against the U.S. dollar in 1995, and Japanese consumers indulged their appetite for American goods. With an exchange rate of approximately 85 yen to $1, it was incredibly inexpensive for Japanese consumers to buy merchandise from U.S. catalogers who, in turn, were selling American products in Japan hand over fist.
The U.S. mail-order frenzy also was perpetuated by the Japanese media, which began publishing guides on how to buy from U.S. catalogs, explains Sharon Barnett of Prestige International, a global customer relationship management solutions provider that works with several U.S. catalogers marketing in Japan. Consequently, many Japanese consumers requested catalogs, receiving the U.S. domestic version and incurring international shipping charges. U.S. catalogers saw their customer service costs skyrocket as Japanese consumers required greater assistance with the ordering process. As such, many catalogers began to adapt their catalogs for a Japanese audience, starting with the order form and instructions.
Then the Thai baht bottomed out in 1997, and with it went the economic stability of the Pacific Rim. Japan, once the crown jewel of the Pacific Rim, quickly became global direct marketing's orphan. Many direct marketers pulled out of the region completely. Others chose to mail more carefully and selectively within the region, or scaled back and only mailed to their existing customers.
Peruvian Connection is one example of a cataloger that has kept its finger on the pulse of the Japanese market since it entered that region in the 1990s. It currently mails Japanese customers its domestic catalog, with an order form translated into Japanese. Orders come into its U.S. headquarters where they are filled and individually shipped to customers in Japan.
While its market and customer base are significantly smaller in Japan than in Germany and the United Kingdom, Peruvian Connection finds it "financially beneficial to continue mailing in Japan," says the company's COO, John Vesbach.
Indeed, the tide appears to have turned, and the land of the rising sun is showing signs of emerging from its economic recession. Last July, children's apparel cataloger Hanna Andersson, which has been operating in the region for more than 10 years, registered its first sales increase in Japan since 1997.
Predicts Barnett: "With a new prime minister, and the stock market recovering since April, we at Prestige believe Japanese consumers will regain confidence in Japan's future, which is very important for consumer spending."
Another sign that U.S. catalogers have not given up on Japan is the launch of several Japanese-language e-commerce sites in the past few years. These sites largely are set-up by catalogers already operating in Japan and that have integrated an e-commerce site with a print catalog. This allows them to leverage existing in-country customer service and fulfillment centers. In fact, Lands' End, which maintains customer service and distribution centers to support its Japanese-language print catalog, chose Japan as its starting point for its Web expansion initiative.
Business-to-business cataloger Viking Office Products also launched a Japanese e-commerce site, which is fully integrated with its Japanese-language print catalog. As it does with all of its international operations, the cataloger sells local products in the local language and sets prices in the local currency. It also has its own in-country operation that handles all Japanese orders from soup to nuts.
The Asian economic recession of the late 1990s that hurt many U.S. catalogers operating in the Pacific Rim was fortuitous for REI, an international merchant of outdoor gear and clothing. Since the launch of its Japanese-language print catalog more than a decade ago, the cataloger has added an e-commerce site and a retail operation. A drop in land prices enabled the company to set up its first retail operation, located on the outskirts of Tokyo.
REI's e-commerce site launched in June 1999 to service its existing Japanese customer base. The company further expanded its presence in the Japanese market to include pricing in yen and local fulfillment for both its print and online catalogs following the opening of its fulfillment center in Yokohama. Local distribution complements the cataloger's in-country customer service center, which handles both e-mail and phone orders placed by its Japanese online and print customers. It also has enabled REI to place in its Tokyo store Internet kiosks, from which customers can order products.
While Barnett admits she hasn't recently seen many new catalog launches in Japan, she recommends that any cataloger considering a Japanese launch should use in-country partners for fulfillment and or customer service. A partner can provide value-added services and marketing advice to guide you.
Barnett also recommends that you integrate your Web and print catalog business into one strategy. The Web can be a useful tool for new customer acquisition. At a very minimum, says Barnett, maintain a Japanese-language catalog request page or
a Japanese Web call-back button on an English-language Web site where consumers can specify a time for a Japanese-speaking service rep to call.
Whether or not Japan is able to pull itself out of an economic recession and return to its former glory is yet to be seen. Regardless, Japan is not a market for the faint of heart.