The news in Japan is dominated by headlines of economic malaise and political incompetence. Spending money frivolously is definitely not in fashion. SAVVY SPENDING is in. As such, the other two key elements in The Hunting! concept are “young women empowering themselves” and, less high-minded, “tracking down those must-have items at TGC!”  Must-haves this season will feature masculine images such as armor to promote “strong women”, according to a press release.

The event is organized by mobile fashion site GIRLSWALKER.COM and, as in previous years, the clothes worn by models in the show will be available for purchase immediately via the site. TGC released data from its own research that says Japanese in their late teens and early 20s it surveyed currently spend almost 100 minutes a day using the mobile Internet, 10 minutes more than a year ago. About 65% shopped online using their mobiles over the last year.

New this season is TOKYO GIRLS PARADE, a website where users can pull a fashion slot machine to create Nintendo Mii-like avatars dressed in random fashion looks from Tokyo. (The website is currently avaialable only in Japanese.)

Here’s a clip from last season’s TGC:

Models Momo Eri and Tsubasa Masuwaka at the campaign launch

During the Nihon Bara-Iro Keikaku, or Japan Rose-Color Project, customers who buy a Quarter or Double Quarter Pounder Cheese get a pink badge and scratch-card, with the opportunity to win one of 50 free T-shirts. Early in the campaign, the T-shirts were also on sale at the McDonald’s on Center Gai, the upper floor of which was turned into a store reminiscent of a pink Graniph or UT. Some of the Ts were emblazened with tongue-in-cheek messages, such as “I Have Not Been Trading Stocks.”

In this way, behind the rosey color, the campaign makes a deeper pitch at consumers’ sensitivities. Members of the fan club can submit “Big Mouth” comments about the state of Japan today, including hopes, worries and messages of encouragement, such as from ‘Kenta’ in Oita Prefecture to people looking for jobs: “To change the current Japan, it does not take a person with good education, but with the spirit to challenge everything.” Or from ‘Chibisuke’ in Chiba to people who hate their overcrowded commutes: “Leave it to me! I’ll make the trains bigger. I already finished the designs.”

Singer Amuro Namie was chosen as the campaign model, reflecting the personal struggles she has overcome with the death of her mother, divorce and personal reinvention as an artist. The television commercial shows her fighting with herself in a video game, and tells viewers to “Keep Winning for Yourself” and “Laugh at Everything.”

The 108-room Quincy, which opened in February, operates under a flat-rate system where the room charge includes airport pickup, three meals a day, evening cocktails, Internet use, mini-bar, limited amounts of laundry and all local calls. This transparent approach is a clear pitch at businesspeople being squeezed by tighter travel budgets, but appeals to the broader traveler who no longer understand why they should be overcharged for essentials like Internet or non-luxurious extras like a canned drink.

Quoted net rates for early July are SG$228 a night (US$157), an all-inclusive price that is competative for the city-state and, for consumers, laudably easy to understand. By comparison, the same night at The Scarlet would cost SG$175, room only (SG$263 with breakfast and airport pickup). The Naumi is SG$260 including minibar but excluding breakfast or pickup.

This will be a tough year for Singapore’s hotels, with 4,500 new rooms due to come online, even as the number of visitors falls, according to Jones Lang LaSalle Hotels.

The change of economic mood means that consumers are less tolerant of murky pricing policies and hidden extra charges. They still believe they deserve to travel in style. But if they are going to spend their money, they want to know what they’re getting in return. The Quincy is one example of a business response.

“What’s different this time is that consumers aren’t simply looking only for low prices, they’re being more selective and hunting for higher quality and more fashionable products,” according to economist Teruhiko Mano. And analysis of Internet search data bears this out.

A review of keywords that experienced a surge on Yahoo! Japan in May leads to several sites that allow people to save on normally high-price items. (Of course, flu fears and the usual celebrity and sports news also featured heavily.)

Searches soared for “5.5 million yen house,” a keyword used by real estate agency Aqura Home for a new service offering made-to-order houses for 5.5 million yen, around US$55,000.

In mid-May, there was a huge volume of searches for sisyokukai.jp a new service that promotes new restaurants. Users receive discounts of 50-80% for meals in exchange for providing feedback to the restaurants, who are trying to perfect their service.

This week, there has been a large number of searches for “kane no tamago service,” which introduces consumers to apprentice nail artists and hairdressers, who provide manicures and cuts for large discounts or even free.

One luxury item that did enjoy increased search interest was the Segway, as the transport device is rumored to soon become legal on the streets of Yokohama.

The potential spending power of young, wealthy city-dwellers is well-documented. Eighty percent of wealthy Chinese are under age 45, according to a recent McKinsey report entitled The Coming of Age: China’s New Class of Wealthy Consumers. That’s compared with 30% in the US and 19% in Japan.

The economic crisis has shaken the assumptions of the Chinese middle class like anyone else. They are less likely to take risks, spend unnecessarily, or change jobs on a whim than they were a year ago. However, individual confidence – belief in oneself – remains remarkably high, especially among females.

Female consumers in their late teens and early 20s interviewed for the research have clear plans for their futures, which involve 1) early 20s: marriage, 2) mid-20s: having a child, and 3) late 20s: returning to work.

Rather than being a hindrance to a career, the young marriage age increases the opportunities for urban women, who expect to have their child (only one child) by their late 20s. The presence, normally, of four sets of grandparents mean that childcare is free and easy to find, so women don’t have to give up their careers, and most don’t want to. Unlike for previous generations, or for people living in rural areas, these women see work not only as a right they are not willing to give up, but also an escape from the pressures of home and family.

With these social/familial obligations taken care of at a relatively young age, but both men and women retain a sense of adventure and personal belief that might for people in the West or Japan peak in their 20s. This enthusiasm is often channeled into a career, the primary means of achieving money, status, friends and personal freedom.

More details of this and nine other consumer shifts are available in Five by Fifty’s China Shifts 2009 report. For a sample, contact us.

Lyota Yagi, VINYL, 2006 (Copyright: Lyota Yagi/Mujin-to Production)

An exhibition at Tokyo’s Hara Museum of Contemporary Art will document the works of several Japanese artists who came of age in the late 1990s and early 2000s, an era of economic stagnation in Japan, offering a glimpse inside the creative minds of a recession-ready generation.

The exhibition, curated by art critic Midori Matsui, will feature some 30 drawings, paintings and video works by 14 “Micropop” artists. Matsui coined the word “Micropop” to describe the mindset of a new generation of Japanese artists who, the museum says, “rearrange fragments of information and knowledge to give new meaning to the outmoded and banal.”

According to the museum, the exhibition, Winter Garden, “reflects a harsh environment of economic recession and political instability in which artists use cheap materials and simple methods to break down existing structures and uncover the beauty that lies dormant within everyday things. [It explores] a world characterized by increasing uniformity spurred by globalization and individuals faced with the need to find meaning in their own lives.”

Makiko Kudo, "might fly at night" (Copyright: Makiko Kudo/Tomio Koyama Gallery)

Winter Garden: The Exploration of the Micropop Imagination in Contemporary Japanese Art is at the Hara Museum of Contemporary Art May 23-June 20, 2009. See www.haramuseum.or.jp for details.

Time to reward yourself with that new 24-inch iMac?

Recession fatigue is starting to show in the United States, where consumers are rewarding themselves by “trading up” items that play an important role in their daily lives, according to Boston Consulting Group (reported by WWD). In fact, marketers interested in this trend need only look to Japan to see how an extended downturn can actually boost sales of high-quality daily necessities.

The top ten list of “trade-up” items for the U.S. is dominated by what most people would consider 21st Century home necessities. No. 1 is the personal computer, and household electronics like home entertainment (5), kitchen appliances (8) and washers and dryers (9) also feature. At No. 2 is fresh fruits and vegetables, reflecting wellness trends as well as the basic importance of food, with other entries being meat (4), sit-down restaurants (7) and fish and seafood (10). The other entries are bedding (3) and automobiles (6). With the exception of restaurants, the list clearly shows the items consumers will start spending on first will be things that improve their daily lives and personal space.

A prolongued period of low growth in Japan bred innovation in small-ticket items, as consumers recalibrated their spending patterns

The changes in spending by Japanese a decade ago reflected their different priorities, with more emphasis on fashion (which doesn’t make Boston’s U.S. Top 10) and personal computers (mobile phones were always more useful here). However, the shifts in demand were similarly focused on improving consumers’ daily lives and, in the process, contributed to world-leading innovation in everything from functional home electronics and B2C mobile commerce to beverage flavors and cigarette packaging.

Contact us for details of ethnographic research and innovation programs to help your business anticipate consumers’ changing priorities.

Catherine Zeta-Jones for Unilever Japan's Lux campaign

In a recession, consumers treat themselves with daily luxuries and are often prepared to replace a holiday to Hawaii with a small-scale splurge. Beauty and Wellness categories are ripe for premiumization at this time.

That’s why cosmetics and consumer goods’ companies are currently hiring Oscar-winning actresses and handing out free samples to grab customer interest.

Shiseido completely updated and relaunched its Tsubaki line for the first time in March. Kao has expanded its Asience line, Unilever has done the same with Lux Super Damage Repair, and P&G is aggressively marketing a leave-in treatment with the Panteen brand.

Shiseido and Kao have taken the battle to the streets, with prominent ads in subways stations and free samples for pedestrians. Unilever and P&G, on the other hand, have focused on television and high-profile web advertising. For Lux, Unilever employed a Hollywood crew to shoot a short film staring Catherine Zeta-Jones.

For more on current “Up-Trading” trends, click here.

Zero Gravity is a shop selling fashionable, colorful men's underwear in Harajuku, Tokyo.

Jeans Mate is a discount retailer of jeans and other casual apparel, with 108 locations around Japan, included 36 which operate 24 hours a day. A typical Jeans Mate shop has a tight floor plan, with products overflowing to displays on the sidewalk.

A Jeans Mate location in Shinjuku, Tokyo.

Faced with falling sales in 2008, Jeans Mate took a step in a new direction, opening a new shop rebranded as “Zero Gravity” in the youth fashion center of Harajuku in central Tokyo. The small boutique offers colorful boxer shorts and briefs, retro rock T-shirts, and other casual items. Customers are men in their teens and 20s, as well as young women shopping for gifts for their boyfriends.

Meanwhile, discount retailer Uniqlo has sponsored Tokyo Girls Collection mobile-commerce fashion shows to up its cool quotient.

The fim Lalapipo deals with people struggling an a harsh economy.

The Japanese film “Lalapipo: A Lot of People,” currently in release, deals with young people struggling in a harsh economy, dreaming of jobs they are unlikely to get. If the topic hits a little too close to home for some viewers, the theater Cine Quint in Shibuya, Tokyo is sweetening the deal by offering discounts to movie goers who are temp workers, and therefore lack job security.