How is the Japan Disaster Changing Japanese Consumers?

It is often said that the worldwide economic recession has made worldwide consumers smart, who have become severe on price, prefer valued brand and switch channels of purchasing products and services as appropriate.




In a similar manner, the Japan earthquake and tsunami disaster that occurred on March 11, 2011 is assumed to change the consumers in Japan. For this reason, Boston Consulting Group (BDG) in Japan executed a survey to approximately 3,000 consumers in Japan 1 month after the earthquake and tsunami disaster.



Their conclusion was that the companies need to know “how consumers in Japan are to change in the future” rather than “when consumers will start to proactively spend their money”.



In this article, the author would like to introduce the essence of the survey and some possible insights at the end.



1. How was the survey planned and executed?



The outline of the survey by BCG in Japan is as below.



Period: April 8, 2011 (Fri) – April 10, 2011(Sun)

Methodology: online survey

Number of respondents: 3,091 in total

Information about the respondents:

  Region: Toyoku (Akita/Yamagata):103, Kanto (excluding Ibaragi):2,060, Midland/Kinki:618, Other Western Japan: 310

  Age/Gender: male and female of 20 – 69 years old, same constituent as that of population in Japan




1) Consumers are becoming smart in the long-term






(1) Background to Japanese consumers becoming smart is long-lasting stress



The background of “consumers becoming even much smarter” is the stress from the disaster which can be seen nationwide, attributing to “anxiety to the future”. It is possible that the stress proliferates for a long time because 60% of the respondents said that the stress will not eliminate/will remain for a long time. In the case of Kanto (eastern Japan), much of the stress attributes to “anxiety of radiation”, “fear from the disaster” and “anxiety of black out”.



(2) 6 consumer trends making consumers smart



6 consumer trends are revealed from the survey, which are “economy and saving”, “staying at home”, “risk diversification/evasion”, “healing”, “energy-saving” and “safe/security”. The first two “economy and saving”and “staying at home” are the short-term trend.



As in one of the previous article Impact of “Jishuku” (Self-Restraint) in the Japan Disaster Aftermath many people in Japan has been restraining from spending their money and was evident from the survey result as well; 40% of Kanto consumers replied that “consumer spending should be restrained” and “actually restraining from spending”. This trend is prominent among people above 60 years old (i.e. with relatively large disposable income); 50% of them answered that they are to cut spending on travelling/trip. Indeed, spending on travelling, entertainment and eating out has been cut when online shopping has been decreasing a little.



In addition, approximately 50% of Kanto respondents answered that they now spend more time at home. This trend is evident among females; 60% of them answered so. From the survey results, people spending their time at home enjoy their hobby, watching TV, reading and online shopping.



The remaining 4 trends “risk diversification/evasion”, “healing”, “energy-saving” and “safe/security” are regarded to be of long-term trend; 50-60% of respondents answered so. Regarding “energy-saving” already over 90% of Kanto residents and over 80% nationwide have been saving energy in some way or other and majority of them are to continue saving energy in the future. Regarding “safety/security”, approximately 60% answered that now they value food safety than they used to and more than 50% do not intend to change their stance at least for a while after the radiation/contamination issue is solved.



2) Social media (twitter, YouTube) is gaining more popularity especially among people in 50s and 60s



Twitter broke out in 2010 mostly among early adaptors of younger generation. And with the Japan disaster, Japanese people on twitter increased from 5.6 million to 7.5 million. This attributes to the fact that people online realized anew that the Internet is a valuable infrastructure, and that the Japanese government recommended public sectors to leverage social media.



In fact, 10% of the respondents answered that “they started using twitter” or “they would like to start using twitter”. This trend is conspicuous among people in 50s and 60s; 13% of them answered so. Similar trend can be seen for video such as YouTube.



3) More consumers have more social mindset



30% of the respondents answered that “they love their country more than they used to” when only 7% answered that “the hate their country than they used to”. 32% answered that they are determined to proactively donate and 16% answered that they will get involved in volunteer activities. In addition, 80% answered that they would like to help Tohoku (the hard-hit region) by proactively purchasing Tohoku products and services.



3. The author’s final thoughts



Although one of the consumer trends is spending less, the change in Japanese consumers can be a good opportunity for companies to exploit new market and create a new business model.



In fact, there have been some products and services that started to draw attention from consumers such as car sharing, cloud services and renting a house instead of owning a house because consumers realized “risk of owning something” from the disaster. Also, more people are now willing to pay for products and services of power generation and energy saving.



Online shopping has been one of the industries that were not negatively impacted by the worldwide recession and it is possible that this industry plus social media can be a source of a new business model as well. At least companies need to review and change their marketing mix considering the trend of increasing use of the Internet and social media.



Talking about marketing, with more consumers with social minds, it is possible that it is more effective to deliver the stance and philosophy of the company and safety/security of the products and services rather than functions of the products. Moreover, even though social marketing, very often collaborating with NPO and NGO, has been unpopular in Japan, with rise in social minds, social marketing may start to come in and spread also in Japan.



Thus, the disaster can trigger a positive change, an opportunity for companies to gain competitiveness, by being creative and innovative.





References:-

Ohtani, Naoki and Saito, Naoto from Boston Consulting Group in Japan (April 28, 2011), The Japan Disaster is to Change Japanese Companies – Do Not Miss the 3 New Trends (in Japanese)

http://business.nikkeibp.co.jp/article/topics/20110426/219657/





Resources:-

The Japan disaster is changing consumers in Japan in 3 ways; making them smarter, making them leverage social media, and making them with more social mindset. By understanding such changes in consumers, it is possible for companies to create new market and develop new business model by being creative and innovative, thus gaining competitiveness.