And how much should you be thinking of adjusting your Japan market strategy now?
by Dominic Carter
Wherever you live in the world right now it’s well nigh-impossible to avoid the constant flood of information and speculation about the viral epidemic that has arisen in China – the so called Wuhan Flu, Coronavirus and, now, Covid-19.
On my Twitter and Facebook feeds, on Japanese TV, in conversations with colleagues and friends – the crisis is dominating the agenda. Perhaps, being located as we are just across the sea from China, more than many other markets this viral outbreak has the potential to change the way the consumer behaves and the way we need to respond.
One thing is becoming more and more likely: whether we are right to worry or not, the viral outbreak looks like it will have a somewhat extensive impact on global confidence, and Japan will be one of the epicentres. What is a business to do in this situation?
After 20 years of doing market research throughout a range of crises in Japan, I have one piece of advice: don’t let a good crisis go to waste!
Keeping calm: Disasters are part of Japanese life
I have long felt that the anticipation of disaster is a key part of the Japanese psyche. It explains much about their caution in decision making. The Japanese are actually quite used to disasters, pretty much expect them and thus they know how to behave when they hit. Tsunamis, earthquakes, and even volcanic eruptions are something people know can strike at any moment. They are well trained and as mentally prepared as anyone could reasonably be.
The world was justifiably in awe at how gracefully the average Japanese managed the 3/11 earthquake and Fukushima crisis in 2011. No looting, no panic, no violence. Just calm, collected, communal action. A favourite anecdote from the Great Hanshin Earthquake that shook Kobe in the 1990s and killed hundreds is the story that the local yakuza mob supplied food, shelter and care to citizens in need. Everyone pulls together when they need to!
During a crisis, the Japanese are able to swiftly adjust their mindset and behaviour to new circumstances. This includes their consumer behaviour.
In times of crisis, the Japanese can cut back their spending like on tap
When times are uncertain, the Japanese cut back to the necessities. People pull their heads in, as I observed during the financial crisis of 2008. Almost overnight, they stopped dining out as much. At the time I lived in Ebisu, a lively and trendy district in central Tokyo. It seemed that almost overnight, many of the bars and restaurants in the area had shut down. I can imagine a financial crisis anywhere in the world causing an issue in the restaurant business, but it was the speed with which conditions changed that really surprised me.
Another reflection of Japan’s internal response to a crisis was the abrupt change in their fashion sense after the 3/11 earthquake and ensuing Fukushima crisis. Again, almost overnight the goth Lolita girls, cosplayers and crazy street fashion virtually disappeared from Harajuku. While Tokyoites did not suffer much personal harm from the earthquake, there were frequent, scheduled power cuts to save electricity to help supply the country as a whole. Appeals for donations for the Tohoku area that, in part, was wiped out by the tsunami were a daily sight in front of busy train stations.
One would need to be rather socially unaware if not heartless to spend frivolously on fashion while those in other parts of the country had lost everything. Hence it seemed that iconic Harajuku fashion faded out as styles became safer and colours more muted. Around this time fast fashion really started to conquer Japan.
But let me stop you assuming that I am painting a blanket negative picture! The Japanese seemingly can cut back their conspicuous consumption like a tap. But I promise once the situation normalises, they will come back to normal and they will support their favourite brands.
Here three things that I have seen emerging since the virus first became a public crisis in Japan:
1) Smart players are acting quickly
The very health-conscious Japanese are even more so now. Anything that is known to boost your immune system, healthy diets, exercise, lifestyle changes are a trending topic on social media right now. Surgical face masks, long used by the Japanese to stop the common flu and cold from spreading as well as to block pollen, have been sold out across Tokyo for weeks and are hard to come by now.
Face masks have been sold out in Tokyo for weeks.
Pitta Masks, a brand that sells washable, reusable masks seized the opportunity and opened a 10-day pop-up store on the high-end fashion boulevard of Omotesando. Their masks are made from high-grade foam, which come in several colours to be coordinated with your outfit and sizes to fit both men and women. Consumers were desperate to acquire masks and Pitta came their way, quickly reacting to the mask bottle neck.
You may not be in the face mask business, but it is the creativity and responsiveness that is worth emulating here. What is the equivalent health and safety response in your industry?
2) Japanese consumers are looking for answers from someone they can trust
The first thing that people lose in times like these is trust. The Japanese government has been slammed internationally for semi-incarcerating the passengers of the Diamond Princess cruise that has been docked in Yokohama’s port for near two weeks now. Passengers are confined to their cabins on the ship, but the real crisis here is the lack of information.
Not enough information on the status of the situation, what is being done to alleviate it and what is known and unknown about the virus is being distributed to passengers, their family members, and the public. If your company can fill in the gap and gain consumer trust by giving them what the government has failed to provide, this can be a great trust builder.
Responsiveness and empathy are key. Pretending that the crisis is not happening isn’t going to help the way people relate to you. Instead, show that you are aware of the concerns of people. Take concrete action to show you are aware.
Business and marketing in Japan are all about your relationships. People will stick with you throughout times of crisis or at the very least come back to you when it is over if you adjust your tone and your actions to their new concerns.
3) Enlightened workplaces are going to the top of the list of employee preference
Traditionally, Japan has measured diligence at work by one criterion: face time, which involves things like always leaving the office after your manager, unless of course he asks you to join him for a drink (with ‘no’ being an acceptable answer). While the West has embraced working online, tele-commuting and the digital nomad lifestyle, Japan is lagging far behind.
Change might now be accelerated by the outbreak that forces people to stay at home to prevent the virus from spreading on crammed commutes and in busy office buildings. We can see already that more progressive companies like DeNA and Yahoo are flexing their normal working practices to account for the changed circumstances.
Young Japanese, Generation Reiwa, want more freedom than their parents had. With declining numbers and their increased scarcity value, they can take their pick among companies that offer them this flexibility.
What is a successful crisis response?
Successful crisis response as a brand is about responding in the short-term, but not with the aim of temporary reputational and financial gain. Japanese are especially adept at seeing through cynical marketing manoeuvres. In a highly activated emotional situation, anything you do will have long-term implications. It is about being present with the current situation and being responsive to the changed needs of your consumer base.
Show the Japanese that you are human and that you relate to them as people with valid needs and emotions in this crisis, and they will repay you over the long term.