Recent research published by Fuji Keizai Management has revealed that Japanese consumers have been choosing online malls or drugstores over beauty boutiques in the last ten years.
In an effort to get back on track, the country's cosmetic brands are looking to win shoppers back by developing more personalised products and services with skin care experts.
Asia beauty giant Kao for example, is set to open a ‘communication hub’ in Tokyo which the brand describes as designed to 'promote customer satisfaction and understanding'.
According to The Japan Times; the store, referred to as 'Sofina Beauty Power Station', will offer personal skin care tutorials, a testing space and a demonstration area.
Likewise, Shiseido is set to launch a new range for teenagers and over 60's - 'Benefique' skin products, while Kanebo will introduce its specialised skin care line 'Twany' in October.
International players beware - Japanese shoppers expect prestige and privilege!
Establishing or indeed sustaining business in Japan's cosmetics market depends on the seamless interaction and integration with its culture, not something every international company has managed to get right in the past.
Only by conducting thorough market knowledge, working closely with a local partner and having a clear strategy that combines identity, quality and innovation will cosmetic companies have the leverage to succeed.
According to Erwan Rannou at the Minerva EU-Japan Centre for Industrial Co-operation, beauty retailer Sephora is one of the global giants that experienced difficulty when it entered Japan with 7 superstores featuring standardized 'assisted self-service' back in 1999.
Applying the 'standard' store layout was seen as depriving the Japanese consumer of the prestige and privilege that they were accustomed to and by 2002 the company had no choice but to pull out.
Ultimately, Rannou describes that venture as "failing to understand the target consumer and made various ineffective market targeting."