Hankyu to the Metrosexual

Given that the market for luxury in Japan has been shrinking in recent years, Hankyu’s decision to double down by opening a luxury emporium exclusively for men seems like a bold one.

Giving a new meaning to the word “metrosexual,” the Hankyu Men’s store is located in Yurakucho, adjacent to the glitzy Ginza shopping district. With a range of over 350 brands that reads like an A-Z of global fashion, the store comprises nine levels devoted to super-premium apparel as well as male beauty and grooming.

The ritzy men’s department store targeted at shoppers in their late twenties to forties follows a successful2008 Hankyu Men’s launch in Osaka, and appears to emulate the trailblazing and successful Isetan Men’s store in Shinjuku, Tokyo.

Until now, demand for luxury branded goods in Japan has been based on the strong cultural need to signify membership of a “respectable” group in society. There is such a strong structural component to demand for luxury in Japan that it has led some to name it (for now at least) the world’s only mass-luxury market.

Nevertheless, in recent years famous foreign brands have taken a hit due mainly to the stagnant economy. Consumers have tended to concentrate their investment in luxury on fewer, more expensive items (often in leather) or in experiences such as Michelin restaurants or day spas. Especially for apparel, the market has been embracing cheaper brands such as Uniqlo and H&M, mixing brands “up and down.”

Luxury buyers, be they male or female, have become more selective and more empowered. The internet has also given the savvy Japanese buyer access to a wide range of luxury goods at prices that cannot be met by traditional retailers. The proliferation of goods on the Internet is just one more nail in the coffin of the traditional department store format, which has been in decline for twenty years.

However, Hankyu is clearly not taking the fight lying down. The company has shown it still has the willingness to invest big in the department store format.

“In many ways, what they have done with Hankyu Men’s is a return to what department stores in Japan used to be,” says Nicole Fall, owner of trends and innovation agency 5 By 50.

“They are creating a holistic experience where men can be challenged and excited. They are putting the fun back into shopping.”

The new Hankyu store throws down the gauntlet to specialty apparel upstarts such as H&M and Forever 21 that have invaded Ginza in recent years, challenging them by creating a uniquely enjoyable and rarefied shopper experience. While the fast-fashion chains have taken a value-for-money seeking market by storm, Hankyu evidently believes there is no substitute in Japan for “real” luxury in terms of emotional satisfaction.

But why has Hankyu chosen to put the “red ocean” of women’s fashion in second place and throw its lot in with men? While the phenomenon of the metrosexual has only recently been celebrated in western countries, influenced by popular magazines such as “Leon,” urban Japan ese males increasingly are more than willing to spend significant amounts on grooming and fashion. For young Japanese men, appearing overly “put together” has never risked the image of their masculinity, so there is great value in appealing to their vanity.

Indeed, the male fashion market appears underserved and we could be at the start of a new mega-trend of male fashion, grooming and lifestyle. According to Roy Larke, Editor of Japan Consuming, “the stereotypical salaryman in a bad suit?? Those days are over. Men who are young and not so young want to dress well. Even in the context of a shrinking fashion market overall, men still face a dearth of shopping options that cater to their needs.”

Demographics also plats an important role in understanding the decision to open a men’s only house of luxury. According to Fall, “Societal structures and values are changing in Japan. By 2030, perhaps a third of men will remain single. Many men in their 30′s do not have a wife shopping with them, and there is no need to create stores that target everyone in the family.”

So, can we expect Hankyu Men’s to succeed? Certainly, they have made a huge investment in catering to an underserved group. They have planted their flag in the super-premium space, differentiating themselves not only from other department stores but from other retail formats.

Larke offers an interesting perspective on their strategic options, “They could have got it wrong with such a high-end offering if there’s a further downturn in the economy, but what else could they have done to generate the same impact? They still have the flexibility to adapt by moving downmarket if they need to. If they had targeted the mid-range, it certainly would have been hard for them to move up. As it stands, Hankyu has rightly gone for a really unique market position.

Perhaps Hankyu’s strategy is inspired: create an aspirational destination for a huge, underserved segment, with the flexibility to move the format over time into a wider market. Certainly they deserve credit for continuing to invest and innovate their business and we should wish them the best of luck.

20th January 2012

CarterJMRN is a strategic market research agency that has been helping clients with consumers and businesses in Japan and beyond since 1989.

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