The Rise and Fall of Japan

Japan was a spectacular success for many U.S. marketers in the mid-1990s. But now several catalogers that had prospected heavily there, such as Hanna Andersson, Brooks Brothers, and Victoria’s Secret, have scaled back considerably. Blame it on the lackluster yen-to-dollar exchange rate: In 1995, $1 cost Japanese consumers on average ¥94. In early January, $1 cost Japanese consumers more than ¥131.

Indeed, says Mark Bridges, vice president of international business at Hackensack, NJ-based list firm Mokrynski & Associates, “for the [Japanese] consumer, goods and services priced in U.S. dollars cost more today that they did even 12 months ago,” when $1 was worth ¥114. Given the economic climate, it’s no surprise that women’s apparel mailer Coldwater Creek pulled back on prospecting in Japan in late 2000. According to Bridges, Coldwater, which began mailing into Japan in 1995, still mails to its Japanese house file, “but nowhere near the prospecting levels it had been a few years earlier.” Coldwater Creek did not return calls by press time.

Even internationally savvy Viking Office Products hasn’t mastered the Japanese market. “Japan is not yet profitable for Viking,” says chairman/CEO Irwin Helford, “so we’re working to get that formula right.” Catalog productions costs there are four to five times more expensive than in the U.S., and “real estate occupancy rates are the highest of any country we’re in,” he says. At the same time, “Japanese orders are the smallest.”

Although he won’t specify how, Helford plans to tweak Viking’s Japanese product offering while demonstrating to Japanese customers the company’s “fanatical” level of customer service. “There’s still a tremendous amount of office supply business to be had in Japan,” he says.

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