The changing style of Japan’s retail scene

 —  Article by Serene Lim
The shopping Ginza district with the famous Chuo Dori that closes to cars on Sundays and becomes a pedestrian street, circa January, 2016 Tokyo
Image credit: Shutterstock

For many Asian consumers who like to spend an afternoon browsing the latest goods, Tokyo’s Ginza area is a long-time favorite retail destination.

Home to luxury flagship stores and Japan’s most famous department stores—Mitsukoshi and Matsuya among them — not to mention a plethora of cafés and restaurants, Ginza’s popularity helps Tokyo rank as the tenth most attractive location in the world for international retailers, according to JLL’s Destination Retail report.

And despite boasting the highest retail rents in the city, it’s changing fast. Walk through the area today, you’re likely to see major construction sites and redevelopments. Two shopping malls have opened this year – the Tokyu Plaza in March and Ginza Place in September. Next April, Ginza will welcome its biggest shopping complex, Ginza Six.

The massive 47,000 square metre mall featuring 241 shops, a rooftop garden, a Noh theatre, and luxury flagship stores spreading over two to five levels sits on the former site of the Matsuzakaya store, Ginza’s first ever department store.

Hitting the shops – Ginza style

“Shopping in Ginza is not typically of the mall variety – there are standalone luxury stores, department stores as well as traditional, small goods stores here. So there is a sense of change,” says Naoko Iwanaga, Japan research manager at JLL. “These new malls are intended to increase the attractiveness to domestic and foreign shoppers. This will be a positive impact for the area and the economy.”

However, it seems unlikely that a rash of malls will replace other department stores anytime soon in Ginza, according to Iwanaga. “Many of the Tokyo-based ones such as Mitsukoshi Department Store are still very influential,” she says. “Being in Ginza is key for them whereas Matsuzakaya is headquartered in Nagoya. “Moreover, there are limited vacant areas of a good size to develop a mall on in this area.”

Nevertheless, large shopping complexes are posing a strong challenge to traditional shopping districts and department stores across Japan, which have been facing the double whammy of staying relevant in an age of e-commerce and changing consumer shopping habits in the last few years.

Sogo department store in Kashiwa, Chiba Prefecture, closed in September due in part to the competition posed by Aeon mall and the LaLaport Kashiwanoha store. Other department store brands have similarly shut poor-performing outlets. Hankyu closed its Kobe store in March 2012 and Mitsukoshi closed its Okinawa outpost in 2014.

Evolving with the times

Others are trying to offer a more personalised experience. Shigeru Kimoto, president of department store operator Takashimaya told Reuters that his stores were targeting older, wealthy shoppers through initiatives such as style advisers. In addition, space is being leased out to other retailers to help draw in customers and reduce operating costs.

And department stores could yet face more of a challenge as malls and their management teams get creative to better woo consumers. The three-year-old Grand Front Mall in Osaka houses a four-storey start-up space called The Lab, where shoppers can beta-test products, a co-working space and a Future Life Showroom. For the retailers who have taken space there, innovation is mandatory; they must offer a futuristic or high-tech experience in order to secure a lease.

As times remain tough for Japan’s retailers, the style and format of retail space will continue to change, Iwanaga believes. “Malls are surely but slowly getting more prominent in Japan, but the most influential department stores will remain for some time,” she concludes. “It is still a gradual process.”

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