On February 5th, I conducted an on-stage conversation with LVMH Louis Vuitton Moët Hennessy Japan President, Norbert Leuret, for both the American and French Chambers of Commerce at the Tokyo American Club. Here are my takeaways from that conversation.
- Japan is a center of innovation and inspiration. Much of LVMH’s product innovation comes from artisans from all over Japan, creating distinct materials for textiles, metals, wood, and other products unmatched anywhere else in the world—so much so that LVMH has established a local group in Japan for seeking out opportunities and fostering collaboration.
- Japan is in a second boom period that is not unlike the post-war economic miracle—driven by a high-degree of savings and a desire to spend.
- Make no mistake, millennials are happy to spend money on good products that last.
- Luxury is about how a product makes you feel. Great products that last and give you pleasure, whether a physical item or the memory of an experience, are what luxury is all about. It’s not just about the cost.
- A country’s consumers go through an evolution when it comes to luxury goods. First, it is about a consumer’s desire to show others that he or she is successful. In this case, the choice of product conforms to a specific, recognizable image among a large group of people. In a more mature stage, a consumer buys a luxury product for his or her own pleasure, regardless of what others think. In this case, the consumer is looking for a luxury product that is distinct. The Japan market has matured in the last twenty or thirty years.
- What makes Japan’s luxury market distinct from markets elsewhere in the world is the level of research that consumers do. They know the products extremely well, and sales staff must be just as, if not more, deeply versed than customers. Educating staff is more of a challenge in Japan.
- The idea that the Japanese are reserved and don’t show emotion is a myth. You get any Japanese talking about something for which he or she has a passion and you will see that passion just like you would with anyone from anywhere else in the world.
- In luxury, a dissatisfied customer will never return. This is different from businesses like airlines and insurance where dissatisfied customers make repeat purchases anyway.
- To be successful in the luxury business, you need passion. You can tell who has passion because such people have a curiosity about the outside world and diverse interest well beyond work.