It was gratifying to see that the September 23 issue of Toyo Keizai (one of Japan's major business magazines) focused on the "Miracle of COACH" in its cover story.
When I first got involved with COACH as their official marketing advisor in Japan way back in 1998, they faced an array of marketing issues related to product, pricing, distribution, and advertising/PR.
But they had a few things on their side: a desire to get it right, good leadership and a vision that allowed for significant investment in Japan, good partners to support knowledge gaps and local implementation needs, and plenty of energy to address the broad array of issues that needed to be resolved to optimize performance in a very difficult (but high-potential) market.
To make a long story short, what COACH did exemplifies what it takes to succeed in Japan.
- Understand Japanese consumers.
You can't maximize sales to people you don't understand. Use every available tool to know your customer. Work with people who can guide you through the complexities of doing this in Japan. Then follow up on the insights!
- Get the product right.
Japanese consumers are amongst the most demanding in the world. Your current product lineup may not be optimized for Japan. Over a five year period, I both spearheaded and was involved with projects that resulted in a number of improved or new COACH products—which brought in tens of millions of dollars in incremental revenue. Moreover, two years before Coach launched its wildly successful Signature C line of products, COACH Japan CEO Ian Bickley and I proposed the introduction of a "signature collection" to meet the unmet needs of Japanese consumers. Hundreds of millions of dollars have been earned in Japan from such Japan-centric approaches. Get the product right!
- Optimize channel strategies.
You've got to have the right distribution partners and you have to be in the right cities and the right retail chains. With some brands, it makes good sense to open retail shops of their own. (A few years ago, COACH had no free-standing shops in Japan. Now there are several, including prime locations in areas like Ginza.) Don't forget new media like the Internet and cell phones—both have become very important selling tools for some brands.
- Get the communications right
Find out what resonates with Japanese consumers. Successful advertising from your home market may not only be ineffective in Japan, in some cases, it may actually hurt your brand! Over a two year period, the Spark Productions team developed a number of Japan-centric communications initiatives which differed in important ways from those used in other markets. Not only were these very well-received amongst Japanese consumers, in some cases, aspects of these approaches were "reverse imported" for use in the US and other countries. Since then, COACH Japan has built on and expanded these approaches while continuing to feed information on local needs back to US headquarters—which has cooperated in adjusting many aspects of communications to more effectively reach Japanese consumers.
And don't forget PR and event strategies. To optimize effectiveness in these areas, you may need to diverge somewhat from your approaches in other markets. In Japan's fashion world, PR and events are tremendously important. Learn what works. Then follow through.
Much more can be said—a range of outstanding people and strategies contributed to COACH's "miracle success in Japan," but I think you get the picture. If you get things right, huge rewards await.
In 2000, COACH had about 75 sales locations in Japan. Today there are more than 120. More astoundingly, sales in Japan have grown by five times over the same period. The brand used to be ranked sixth amongst luxury handbag brands in Japan, and now it's second—led only by Louis Vuitton. And that's in terms of sales, where LV products, on average, cost about three times as much as those from COACH. Moreover, according to Lew Frankfort, COACH's worldwide CEO, COACH may surpass LV on unit sales in Japan sometime next year.
All of that in less than a decade. A miracle indeed.
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