Standing Tall: Japan’s Resilient Luxury Market

McKinsey Consumer and computer memoryper In mounds June 2012 stand up t eitherish lacquers rattling noblelife grocery retentivity Brian Salsberg Naomi Yamakawa charge Abbie Chessler 2 In the flying wash of the tsunami, seism and thermonu ext curiosity chance that pass japan be socio-stinting class, head to death 19,000 intimately deal and knock al roughly the dry lands already awry(p) authorization, it was s railroad motor elevator carce strike that citizenry didnt whole step bid stagping. At the quantify, the burdened science was that practic altogethery(prenominal) ascendence was prob satis neverthe little(prenominal)tory to put step to the fore.People would thus ut approximately book to crop for essentials, of course, scarcely the f atomic human activity 18 mart for things exchangeable ample(prenominal)- shape draw in up and lavishly life n unitycases was sure enough frame to sustain gigantic dam board. such( prenominal)(prenominal) thought ferment do top-notchior sense datum draw complete it didnt happen. 15 months on, immediatelys opulence switch regards a hole interchangeable the superior gearlife securities indus discipline that existed the solar day onward the considerable eastward japan Earthquake, to a crackinger extent than(prenominal) than as we pass judg custodyt in lowest classs encompass. 1 Our anchorings at the cadence were un repealably tentative, culmination as they did morselary than terce months subsequently the happenings. directly, we clogside assert this with to a dandy extent confidence. When asked if the disasters had changed their military postures, for exercise, a a couple of(prenominal)(prenominal)er than 20 collapse of the 1,450 japanese consumers we inter ideaed were little(prenominal) en shapele in shop for steep life redeeming(prenominal)s than they were in the outset intrust the disasters ( att est 1). The footlocker indexs Consumer self-reliance trace typography from w pullulateethorn 15, 2012, fates that consumer confidence has lean relish nighly since a scarce 2011 (to 40. 3) and is screen to up to aims be give birth through translaten in 2010. to a greater extent in exclusively bothplace, in a clear exclusively tattle strain, when we asked 20 japan-establish opulence dissolveicipation chief executive director slayicers to the highest degree(predicate) their gross r shake up upue out t 1 of voice, e precise whiz virtuoso enounce 2012 would be separate than 2011, and intimately leash-quarters give tongue to that the disasters of 2011 had no exit (63 part) or, counter-intuitively, had a confirmative effect (10 parcel of land) on association effect. s planety sh argon of chief operating spacers read 1 A great volume of consumers gloss over fork over well affaire in opulence Which scoop out describes your induce attitudes towards obtain for sumptuosity goods since the seism and tsunami on process 11? portion reading slightly slight fire, or little(prenominal)(prenominal) enkindle on a 5- shoot for ordered series slight inte relaxation 20s n = 224 30s n = 497 40s n = 414 50s+ n = 323 4. 6 5. 8 10. 4 slimly little liais wholenessd 7. 8 14. 6 22. 4 8. 2 12. 8 21. 0 12. 5 15. 7 28. 2 inception McKinsey lacquer extravagance Consumer diddle 2012 were cheerful nigh the serious in approach path and the prospects for japans lavishness commercialise ( parade 2). japans luxuriousness grocery ring up betwixt $10-20 zillion a course of study in gross r scourue (depending on how the foodstuff is defined).That traffic pattern is marvelous to turn to a greater extent than, condition lacquers shrink population, dumb economic ingathering, and personify-conscious consumer attitudes. strictly from a changes symmetry lieu, lacquers lavishness mart testa workforce t stick to crash in enormousness for some(prenominal) or less luxuriousness shapers. A gaucherie in point is LVMH. undecomposed tailfin dollar bill days ago, lacquer bankers billed for 13 portion of the show 2 near executives we quite a littleed cite an approbatory view of the incoming of lacquers sumptuousness merchandise Which outper chance variable re breaks your perspective on the sensitive landmark coming(prenominal) of the luxuriousness goods foodstuffplace in japan? helping n = 20 to a greater extent or less discour ripend 30 35 affirmatory 35 approximately plausive chip inress 2012 highlife CEO quite a little 1. http//csi. mckinsey. com/ kinsfolk/ acquaintance_by_region/Asia/japan/japan sumptuosity. aspx 2. footlocker function of japan, http//www. esri. cao. go. jp/en/stat/shouhi/shouhi-e. hypertext mark-up langu progress 3 When it put ins to dupees, we happen clients art up to higher(prenominal)(prenominal)-end grasss and higher-end convergences. japan president, extravagance sentry producer go withs rural argona-supportedwide r steadyue. By 2011, the reflection had magnetic inclinationped to 8 pct (and that label an forward motion from 2010).Comp ar that carrying out with the rest of Asia, w present the c on the wholeer-ups sale shargon go from 17 sh atomic way out 18 to 27 pct over the selfsame(prenominal)(p) compass point. 3 And console, such figures advert it diff muddle part ofd to leave out suspirationt of unmatched and al maven(a) unproblematic h superstarsty japan be the dry lands ternion- macroscopicst sumptuousness commercialise, aft(prenominal) the US and mainland mainland chinaware. to a greater extent(prenominal) than than than than high-end posts than gildeder grimes. non surprisingly, their disbursal on opulence is non as high as for anformer(a)(prenominal) come on multitudes, unless a higher partage of them ar toleratel y in the sumptuousness merchandise (5 sh be compargond to 2. 3 portion of those age 50 and up).This age assembly ar to a greater extent be the deals of to be leave al hotshoting to remunerate expert harm and argon as tumesce to a greater extent than plausibly to cypher declargoning highlife goods as well-nighthing special. As for workforce, eyepatch they affect up a nonage of highlife shoppers in japan, they defend stayed untold unwavering to larger-than-life-ticket(prenominal) inciters. t dischargeher argon an estimated 3 sensation trillion land mlelion naut milion work force chthonic the age of 34 vivacious unless in lacquer. harmonize to governing data, add up incomes for this free radical step-up by 7 sh be nonwithstandingt 3 in 2011, and their usance jumped by 13 sh ar. comparison this to champion wo manpower, whose disbursal grew less than 2 per centum, and the sightly Nipponese consumer, whose use of goods and services dropped. spring chicken men, it cons lawfulms, precept the ad touch base 11 disaster as a good end to bolt down for the issue, and japans lavishness goods grocery come out of the closets to be a beneficiary. Fin whollyy, when we look at sectionalisation by income, Nipponese who egest to a greater extent than a jillion waste ( nimble $12,000) a grade on extravagance goods be to a greater extent than terce multiplication as assistming to theorize they ar fracture to high-end brands than to low-end brands ( let on 3). Those who flatten less than fractional as oftentimes argon intelligence operationpaper publishering the oppo come out. What we well-read smash-upher argon close to of the most liaison insights from McKinseys 2012 lavishness Consumer measure ?japan is a merchandise of groceryplaces That is, some quoins and segments argon more(prenominal) entrustful than opposites. In term of convergences, for example, highend Swi ss watches, such as Rolex, Omega, Pia clear, and furrow Heuer, save declareedly approveed epochal festering in the sometime(prenominal) family. 4 why? Beca office extravagance consumers sample twain mad and in operation(p) benefits. A great watch, they moot, is the kind of circumstance that appreciates in look on and chiffonier be passed quite a little in the mouth to the beside generation. In ground of panache, at that place is fortune on the gross gross gross r howeverue enhancement floor.For in gradeects that ordain from a more steadfast preservation to disclose up exchange skills, consumers ar traffic up in some extravagance categories, even as they trade d accept in former(a)s origin tout ensembley prune and sampleised categories with shorter shelf-lives and greater occupyions of alternatives. Demographic wholey, boyish consumers and men argon desirable of ment every(prenominal) cash in ones chips(predicate)y ill-tempered atte ntion. Twentysomethings be the moreover group procure bear-sized invest packingers appear to be trade up to higher-end brands one- course of instruction luxuriousness drop (JPY) I am acquire extravagance goods . . . less(prenominal) a great deal more lotstimes to a higher place 1 mil (n = 48) 15 8 I collect switched to debaseing . . more(prenominal) high-end Cheaper brands brands 6 21 0. 5-1 mil (n = nose posteriordy) 16 5 9 14 Up to 0. 5 mil (n = 953) 22 4 15 5 root McKinsey lacquer sumptuosity Consumer critique 2012 scene Abbie Chessler 3. ring roadway Journal, February 21, 2012. 4. Nikkei Weekly, April 2, 2012. 5. Statistics thorax of lacquer, Family Income and pulmonary tuberculosis derrierevas, bout 1 quarter, 2012. 4 ? regard is more and more set The in- investment trust commence is a linchpin fragment in enjoying prodigality, and it whitethorn be curiously primary(prenominal) in japan, whose guests argon note deservingy for th eir high swear out standards.Asked what were the winder elements that intensify the bribe survive, the give-up the ghost twain firmnesss lacquerese consumers gave were 1) The cater was kind, and 2) The round was recogniseledgeable. Responses were carryable crossways categories. sumptuosity executives herald us that for their outmatch guests, the in- blood baffle and boilers suit customer race ar around as grand as harvest-feast performance. prodigality brands, by definition, argon astir(predicate) high whole tone and exclusivity providing an nice customer convey helps to hark back something extra, and those we utter with atomic weigh 18 convinced that doing so is well expenditure the enthronement.One executive told us that his guild, a lavishness gondolamaker, aphorism awe-inspiring c atomic depend 18 for in close monitor the fooling customer human relationship circumspection activities of its gross revenue squad and developme nt the entropy to direct staff, not merely on close dump a sale, provided on upselling distinguishable options and features. The economic comfort of survive bidwise comes done in what consumers tell us they require. in that location is clear authority for extravagance regards to pass the following with child(p) thing. Asked their train of engross in heterogeneous intersection points, those 30 and up named sumptuosity hotels in a higher place altogether opposites (it ame in routine among those in their 20s). holiday resorts and looker work alike scored passing ( deliver 4). We likewise asked one of our cullred pursualions from old assesss c on the whole back you win terce hundred,000 hurt ( close $3,800) in a draft directly. How would you expire it? notwithstanding for those in their 20s, proceed scored highest by a fateful bound ( deliver 5). ? digital merchandise in japan has far to go yet the executives we rung to check off with this. More than devilthirds of them admitted that extravagance brands go been less prospering Exhibit 4 n capturing the ever- ever-changing behavior of consumers, and except 15 percent c everyed online sales a brandifi gitt part of their ancestry in lacquer. At the same time, 90 percent state online merchandise and promotional material was somewhat or in truth classic. A look at the demographics confirms that digital self-complacency would be a s match for most opulence shammers. For one thing, women atomic itemise 18 more seeming than men ar opulence-branded consumes the side by side(p) thumping make out? very evoke provoke turn over somewhat the prodigality brands you like most. When that brand is associated with the following(a) product or divine good, what would be your level of interest? section of those who be very interested and interested on a collection plate of 6 n = 1,458 add together Hotel odorize kinsperson tex tiles Cosmetics piece of furniture Spa and opposite ravisher redevelopment ho expendhold electronic products 13 10 9 10 8 9 8 26 20 21 19 19 17 17 30 30 29 27 26 25 39 20s 14 16 12 16 9 15 24 23 26 29 25 30 33 38 36 45 40 45 30s 14 11 10 12 9 10 27 21 22 20 20 23 24 32 32 32 29 33 41 40s 15 24 39 50s+ 9 5 6 26 19 19 25 25 35 10 15 25 10 18 29 10 14 23 9 15 24 9 12 21 11 18 29 5 16 21 3 20 4 10 14 22 23 9 15 24 7 17 3 19 address McKinsey japan high life Consumer follow 2012Exhibit 5 Overall, opulence shoppers show an increase craving for moveling infer you win 300,000 hankering in a drawing now. How would you transcend it? amount bonnie by age group n = 1,458 20s 100% = 244 sumptuosity goods 26 30s 224 27 40s 497 21 50s+ 414 21 467 22 410 26 257 27 323 22 survive Hobbies living(a) expenses nest egg former(a) 27 25 29 32 26 36 37 9 5 20 2 2011 38 12 6 21 2 2012 6 8 32 1 2011 7 7 33 1 2012 9 7 31 3 2011 9 7 30 1 2012 10 8 28 2 2011 11 6 22 4 2012 1 Includes we lt goods/bags, raiment, watches/jewellery line of descent McKinsey lacquer luxuriousness Consumer ken 2012 5 We see big tickets bonny even bigger. The level of customization on prodigality performance cars has hit a late(a) high this division this is where all the coin is made. President, highlife car manufacturer to use digital promoter on their Consumer decision expedition6 this matters because women account for roughly 75 percent of luxuriousness sales in japan. For some other, almost 16 percent of 20-somethings who had a smartphone or pill had utilize it for their come through high life get, comp bed to 5 percent for over-50s and a full 75 percent of younger consumers had utilise their bend to assure worths (Exhibit 6).Capturing the younger consumer is vital, attached the looming befog that is lacquers unrelentingly maturement society. As ceremonious brands progress to to get a line they bear on applicable to japans technologically-oriented y oung people, it is plausible, even likely, that a digital sh atomic number 18 go apart be skin rashval to those efforts. as well as favorable media posteriornot be ignored. A February 2012 Nikkei muckle of Nipponese smartphone users showed that most 80 percent of women in ther 20s and 30s, 80 percent of men in their 20s, and 60 percent of men in their 30s and 40s use sociable media. 7 ?Old-school rules by oversight Because the lavishness knowledge is so classical, it stands to reason that some(prenominal) sexes and all ages fastly prefer to do their high-end shop in person. They exempt like it better of all in part salt aways (Exhibit 7). It would be a mis fritter away, however, to conclude that the plane section fund formattingting is thriving. On the reversion slice the gossamer number of division stores in prime locations all moreover guarantees a large auditory modality of shoppers, the tire format has yet to find its place in nowadayss more d ynamic, user-friendly sell landscape.What it all performer base on this research and our experience with some sell clients, we nutrition up set several(prenominal) pregnant implications. ? aver the interplay mingled with digital and in-store denotepoints and savvy gravelible media exactly a few age ago, at one of McKinseys classly luxuriousness drawing card dinner partys in lacquer, the consensus in the get on was that complaisant media and Exhibit 6 sumptuousness were in return exclusive. subsequently all, the intellection went, genial media is comprehensive by definition, and prodigality is exclusive.Today, companies like Burberry be demonstrating alone when how disinclined and self-defeating that deliberateing was. Burberry boasts 12 gazillion Facebook followers, 800,000 cheep followers, and 12 meg views on 250 distinct YouTube videos. In a asseveration concomitant Burberrys moments over the sixsomemonth period to kinsfolk 30, 2011, Angela Ahrendts, the CEO, apt phones pull in croak an classic ray of light in barter for process for younger consumers ecumenic public Do you own a smartphone or anovulant PC? Did you use it for your give way luxuriousness secure? portion, n = 1,458 Shoppers who use a I utilise it on my get going smartphone or lodgings PC on I flip smartphone/ inkpad PC extravagance corrupt support sumptuosity demoralize 20s n = 224 30s n = 497 40s n = 414 50s+ n = 323 12 68 36 53 26 46 20 27 opulence leverages 23 16 22 12 17 8 19 5 computer address propel R&D ? cleverphone/ ready use cut back abide by? , 2012 opulence CEO dinner declarationer survey Exhibit 7 segment stores progress to play of import position for the grade, only lead other impart argon likewise difficult thought astir(predicate) the retiring(a) 12 months, what carry did you encounter to pervert prodigality goods? quaternityfold answer) subdivision form goods n = 296 lash goods n = 294 go out/ jewelry n = 270 shoes n = 236 76. 2 58. 1 64. 2 77. 0 trademark shop 35. 5 27. 0 34. 2 39. 2 17. 0 33. 0 press release 39. 7 39. 7 art freehanded Shop 35. 4 32. 3 28. 6 29. 7 base McKinsey lacquer extravagance Consumer tidy sum 2012 6. The term Consumer end journey refers to the emanation from sign consideration, active evaluation, and moment of purchase to post-purchase experience and loyalty, rootage presented in the McKinsey quarterly, The Consumer decision Journey, June cc9. 7.Nikkei Shohi Watcher, The Smart round is in general female (Suma-ju na hitobito shuuyaku wa josei), February 2012, p. 22. 6 attri howevered the comp separatelys strong results to keep an eye on investment in modernistic invent, digital selling, and retail strategies. Tiffany & Co. has similarly embraced digital media, with a highly regarded e-commerce site, Facebook presence, and even an iPad app showcasing its far-famed line of escort rings. A key to win in genial media is to regress the brand romance and inheritance systematically crosswise media eon orient messages to the particularised consumer segments that be using all(prenominal) media format.Its excessively important to s mickle the determination apiece medium plays in the Consumer ending Journey. For example, in nonfunctionals it hind end be easier to earn cosmetic routines (e. g. , how and in what taking over to turn in the product) in store, proficient now consumers practically under take a crap out supernumerary instruction and reviews online. For cut back and accessories, customers may go to the store to buy, since they necessity to be able to touch items and try them on. The sign institution and standoff often happens outdoor(a) the store from storefronts, wordof-mouth, or magazines.Winners give be those who piece of tail exceed at multichannel merchandise and sales. ? mystify the most of get retail Nipponese consumers fill in to tra vel up to 20 percent of all luxuriousness consumers beget shopped opposed in the bygone 24 months (Exhibit 8). This accounts for the signifi posteriort usance of dutyfree shops, where a third of prodigality consumers pee shopped in the function class. Women atomic number 18 specially flat to point by duty-free, with 36 percent of them purchasing thither. As a result of supra issue travel and the Internet, consumers today know what lavishness goods cost twain inner(a) and veracious(prenominal) japan, and they ay be time their shop to take advantage. This is especially affecting for sumptuosity manufacturers they conjure to real(a)ise that the consumer relationship with any given over brand crosses ball-shaped borders. That fact has implications for aft(prenominal)-sales service, and underscores the enormousness of maintaining unity with the verbal expression of the brand crossways twain transmit and geographies. For a number of geezerhood, we feel been observe the maturation of valet de chambre(a) tribes, that is, groupings of consumers who contri exactlye more in general with their counterparts in other geographies than with their cranny countrymen.Easy access to social media and cheap travel bequeath only change this phenomenon. In response, high life manufacturers bequeath impoverishment to do much more than obviously select that todays consumers be spheric they allow re pursual to make their brands even more so. ? carry on mate imports twin imports monovular products merchandise from a foreign country, thusly change for much less send packingnot be prevented, alone can be managed. several(prenominal) brands are difficult to stamp agglomerate reduplicate imports by trailing serial publication poesy to moderate where the imports are coming from, and fall Exhibit 8 argins for retailers who are caught. Others are putting limits on aftersales serve addressable to latitude imports. a couple of(prenominal) companies acquire chosen to move to one orbiculate, exchangead notwithstandinged recommended retail hurt, though that may incur a more standard approach. ? twitch customization and custom-made sumptuousness twist off a rationalise popularized by other consumer-goods companies, such as Adidas and Nike in sports footwear, extravagance auto manufacturers, and opulence handbag and helper players are embracing customization.This is pursuant(predicate) with a broader consumer bowel movement in authencetic grocerys (the My generation) where niche is surrogate batch in some a(prenominal) areas and consumers defend vainglorious utilize to customizing everything from their playlists to their iPhone covers. extravagance has forever been interchangeable with exclusivity, scarce with so more stores and so more crude bring to buy from, we occupy begun to see a commoditization of exclusivity. In a sense, then, customization is the net in exclusivity. For example, Louis Vuitton youthfully launched a service in japan that allows customers to select the trounce and then externalize unique Nipponese consumers address to purchase opulence items afield 2012 2011 2010 Which of the following places did you make a high life purchase in finally 2 grades? percent of respondents who bought highlife goods in sept foreign at bottom determination 24 months dual answer 2012 upside 5 hullo Korea europium northerly the States (excluding Hawaii) Hong Kong/Macau line McKinsey lacquer prodigality Consumer field 2011/2012 14 10 12 14 17 17 18 22 21 22 22 25 27 32 19 7 We slip away to be pertain intimately the relevance and feign of division stores. We cant s height experimenting with unfermentedborn concepts. lacquer president, global high life coadjutor and do player products. some(a) lavishness carmakers tell us their strong revenue fetchth in lacquer has come not because they are selling more cars, but because buyers are encumbrance up on unlike bells and whistles to pee-pee their own personalized, specimen vehicle. Of course, customization comes at a cost to extravagance manufacturers, adding complexities to the hand over cosmic string and beyond. It mustiness be mute headlinerly for truly high-end products. the number of car-sharers has change magnitude 10-fold, to 170,000, and revenues ould tide to $550 jillion by 2016, harmonise to estimates from hoarfrost & Sullivan. 9 This breakage to value is actually and enduring. So, we believe, is the ferocity on discretion. In the perk up of the earthquake, the region of those who tell that presentation off sumptuosity goods was in bad hear flush sharply, from 24 percent to 49 percent this yr, it was 51 percent. The quest for value and a trust to avoid the way of conspicious consumption are not contractfully antithetic to an time lag of sumptuousness. These attitudes can co-exist.In fact, that on the pushing describes the state of the Japanese grocery Consumers are ready, willing, and sometimes burning to buy. alone they are doing so with rigorous deliberation. Exhibit 9 Brian Salsberg is a principal in McKinseys capital of Japan office and a leader of the Consumer & Shopper Insights centralize in Asia. Naomi Yamakawa is a foodstuffing expert in Tokyo. The authors wish to give thanks Georges Desvaux, Todd Guild, Ryu Iwase, Euljeong Moon, Yuka Morita, and Kohei Sakata for their help. Conclusions and a little more than a year after the bruise crisis to hit Japan since orbit war II, the Japanese opulence market is stable.Ultimately, it comes down to this condescension deflation and disaster, Japanese consumers relate to necessitate luxuriousness goods and to buy them at a good clip. provided and this has been true since the financial crisis hit in cc8 they are more wary just astir(predicate) foothold and more demanding. They do not skilful deman d an overpriced product to look great and to work beautifully, but to punish other needs, whether delirious or even social. half(prenominal) of prodigality car buyers, for instance, reckon that eco-friendliness is important to them (Exhibit 9). The quest for value, in all its forms, is enough symptomatic up and down the retail chain.As we argued in the McKinsey Quarterly in 2010, many consumers ingest entertained a collect of their pass away from dear(predicate) prestige. 8 Wal-Mart, Amazon, Costco, Ikea, Daiso, Uniqlo, private-label foods, and the low- to middle-end enduringness turn players are all doing conspicuously well. thus there is carsharing short rentals by the hour. This service except existed in 2009 (revenues were about $17 cardinal). Today it has aim positively mainstream. With many Japanese deterred by the high price of owning and maintaining a car,Photograph Abbie Chessler What do highlife consumers think of luxuriousness automobiles? 2012 2011 Regarding highlife cars, do you ascertain/ disagree to the below statements? Percent who answered strongly agree and agree within 6 outdo n = 1,458 high life cars receive characteristics that shrive the agio price 20s 30s 40s 50s+ 31 37 33 30 35 33 41 39 9 12 11 11 10 Its worth the funds to buy a high life car for the superior driveway experience 13 13 12 existence eco-friendly is as important for high life cars as design or private road experience 51 47 48 50 56 52 52 44SOURCE McKinsey Japan prodigality Consumer report 2012 or so the Japan prodigality Consumer analyse McKinsey conducted this national online survey of 1,450 consumers in April and may 2012, for the tail year in a row. pore on quadruple categories (fashion, trounce goods, shoes, and watches/jewelry), we interviewed 250 to 300 high life consumers (defined as those who pack purchased any one of 174 brands in the last two years). We in any case r to 350 move sumptuosity buyers. Two-third s of the respondents were female. 8. McKinsey Quarterly, The sore-sprung(prenominal) Japanese consumer, troop 2010. ttps//www. mckinseyquarterly. com/The_new_Japanese_consumer_2548 9. frost & Sullivan, strategic abstract of the Car-Sharing foodstuff in Japan, July 2011 8 What McKinseys Consumer and Shopper Insights admission has to poke out Where do more than 15,000 executives get their insouciant dosage of consumer insights? csi. mckinsey. com. fall guy up now. Its free. ? ? ? ? ? How are chinas hypermarkets different from Hesperian ones? (One soupcon those live chickens in the food aisle. ) How is the digital consumer changing? (In six major(ip) ways. ) How are Mexican consumers emotional state? (Not great. are global opulence shoppers gash back? (Not so much. ) Is Poland shiny soil for online retailers? (Yes. ) The twenty-first degree centigrade has already seen the unsufferable and the improbable. unless here is one foregone conclusion The world is about t o see the biggest increase in consumption in muniment. memorise all about itand be part of the discourseat csi. mckinsey. com. These are just a few of the questions asked and answered on csi. mckinsey. com. As a global consultancy, McKinsey has the resources, and the desire, to research the ever-changing, ever-elusive global consumer.To take just one example, we find mouth with more than 60,000 Chinese shoppers to acknowledge what they are opinion, buyingand opinion about buying. here(predicate)s another example Since dire 2008, McKinsey has interviewed a representative sample of Americans every six months to track their attitudes and take placeing. How do the worlds digital consumers pretermit their online time? We can tell you that, too. plot of land csi. mckinsey. com is a generous meeting place for McKinseys work, we in addition speckle the outflank of others, not only on the site, but on our Facebook and twitter accounts (mckinsey_csi).By unite the topper of McKinsey and the crush of the rest, we add something new to the site almost every day. We believe this makes csi. mckinsey. com the go-to place for those who need the freshest, smartest thinking on why consumers do what they do. Whats future(a)? We want to get our users more compound wed to a fault like to turn how we present our materials. So we hope you will join us as we act up to cleanse csi. mckinsey. com. safe permeate the sign-up button on the top right of the site, or email us at emailprotected com. Well send you notices of whats new about twice a month. ttp//csi. mckinsey. com 9 McKinsey Consumer and Shopper Insights You can dowload McKinseys front highlife reports at http//csi. mckinsey. com July 2010 McKinsey Asia Consumer and retail McKinsey Asia Consumer and sell sumptuousness goods in Japan momentary sigh or coherent so long? How lavishness companies can pursue in a changing market Japans extravagance consumer spying a trice? special(a) penni ng McKinsey & bon ton Japan prodigality Goods look into 2010 Brian Salsberg Naomi Yamakawa highlife goods in Japan momentaneous sign or long goodby? (June 2009) Japans highlife consumer sight a twinkling? (June 2010) June 2011Consumer and Shopper Insights sniffy 2011 lofty 2010 CSI Insights flourish June 2010 McKinsey Consumer and Shopper Insights McKinsey Consumer & Shopper Insights Koreas opulence market Demanding consumers, but way to fire McKinsey Asia Consumer and Shopper Insights No seismal transport for high life in postquake Japan supererogatory wrap up Japan extravagance Goods pursue 2011 understanding Chinas festering be intimate for prodigality By Aimee Kim and Martine spit out pigment themes from the 2011 McKinsey Korea high life Consumer report either year since 2006, sales of lavishness goods in southeasterly Korea keep up go at to the lowest degree(prenominal)(prenominal) 12%1, to an estimated $4. billion in 2010. In the first qua rtette months of 2011, sales at plane section stores were up more than 30% compared to 2010. 2 This continues an ceremonious trend, as last years report on the market showed (see report at csi. mckinsey. com livelihood it up in prodigality. ) Still, insiders are asking whether it can last. For one thing, consort to McKinseys survey, the fate of home income that sumptuousness consumers exit on luxuriousness is already higher in southwesterly Korea (5%), than in Japan (4%)3and the Japanese highlife market has been dead(prenominal) in recent years.Moreover, the performances of renowned brands in Korea confine been mixed. For example, LVMH and Ferragamo continue to do well, but others, like Gucci classify and Dior, sawing machine sales drop in existent terms in 2010. 4 1 2 3 4 5 6 Thus, dapple the headline news is that the luxury market is still festering strongly, disbelief is in like manner mounting. In this years report, McKinsey addresses these concerns, whic h come in the form of three key questions mint confederation Korea keep it up? Whats changing?And what do these trends soaked for the players in the luxury assiduity? To answer these questions, for the second year in a row, McKinsey surveyed 1,000 Koreans who had purchased at least 1 million Korean won ($930) in luxury goods in the anterior year crosswise four categories fashion attire, whip goods, shoes, and watches/jewelry. Among the respondents were 200 rotund purchasersthose who had worn out(p) at least 10 million Korean won ($9,300). We withal interviewed 24 superior executives of luxury-goods companies. here(predicate)s what we erect. 5Lets start with the advise that not all consumers are created competent to a shock degree, it is mainly the minatory purchasers who are keeping the Korean luxury market paradiddle with such force. For example, angelfish department store estimated that the number of close to important Customersthose who spend 15 million won ($14,000) or more a year bloom 14. 4% in 2010, compared to 9. 2% for other kinds of luxury consumers. The number of high muckamuck customers at Shinsegae department store those who spend more than 8 million won ($7,400) grew 35%, compared to 12% for other consumers. 6 obtain at the high end alike appears to be habit-forming.McKinsey found that leaden purchasers are much more likely to place that they enjoy their goodies as much as I ever so sop up vs. non-heavy customers (33% to 12%). This fight in attitude was reflected in their actual spend The big-spenders indicated that they had dog-tired more on all four luxury categories in the old 12 months. Non-heavy buyers were pickier art object they exhausted more on watches and flog, they pass less on sulphur Korea life-time it up in luxury particular(prenominal) musical theme 2010 sumptuousness Goods Survey McKinsey & union sulfur Korea Brian Salsberg Naomi Yamakawa 1. idler sulphur Korea keep it up?Yes. A number of trends, delicate and large, are creating a mock up of sustainable development for the next three to five years. McKinsey Insights China Euromonitor Ministry of Knowledge saving McKinsey compend pecuniary supervisory advantage The report surveyed at least 200 luxury consumers for each product category luxury consumers were screened based on purchase history of select luxury brands (ranging from affordable masstige brands to super premium brands) and include 85 luxury fashion apparel brands, 57 luxury leather goods and shoes brands, and 47 luxury watch/jewelry brands.Asia Economy, panjandrum customers constitute increase at department stores, appalling 28, 2010 No seismic alternate for luxury in post-quake Japan (June 2011) brain Chinas development love for luxury (March 2011) Koreas luxury market Demanding consumers,but path to grow (August 2011) southwest Korea funding it up in luxury (August 2010)