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.

A shop specializing in selling used mobile phones in Tokyo's Shibuya district.

An old stereotype holds that Japanese only want what’s “new.” If a mobile phone got scratched, or was outdated by even a few months, it was easy enough to pick up a new one. Now, that doesn’t even apply to electronics, once a symbol of national pride.

A netbook computer on sale for 100 yen in Tokyo

Sales of cheaper appliances from China and Taiwan are reportedly climbing. In the highly competitive field of “netbooks,” compact, wireless-ready laptop computers, two afforable Taiwanese companies, Asustek Computers and Acer Inc hold a combined 79% share of the Japanese market. In campaigns timed to coincide with university students starting classes and new workers joining companies, electronic retailers are selling netbooks for as low as 1 yen, provided buyers sign up for a wireless internet service provider contract.

Retailers such as Yodobashi Camera in Tokyo have responded to falling sales by moving buying and selling second-hand appliances for the first time.

Products such as this home grill kit are currently selling well in Japan.

At a time when retail sales in many sectors are falling, one area in which sales are actually rising is items that can be used for do-it-yourself activities at home. It seems that Japanese consumers are increasingly opting not to go out, but rather stay at home to practice self-enriching hobbies such as cooking with the family, making clothing, or growing food.

This home shiitake mushroom growing kit has become a surprise hit product.

Consumers are saving money by eating out less, but are also investing in near professional-grade kitchen tools, such as rice milling machines, high-tech rice cookers, fondue sets, and pressure cookers.  Kitchen appliance manufacturer Iwatani reports that sales in the last quarter of 2008 increased by 43% in the niche of home grills to make fried octopus and skewered chicken, foods which are usually available at outdoor food stands. Another hit product is a kit that allows users to grow shiitake mushrooms at home, suggesting that consumers want to have fun in the kitchen.

Other products that have been doing well, such as electric hair clippers, hair irons, and hair dyes seem to indicate consumers are giving up trips to the hair salon in favor of doing the job themselves at home. There is also a strong sense of self-improvement with this brand of at-home consumerism. One of the hit products of late 2008-early 2009 is the “Core Rhythms” series of exercise DVDs, which incorporate moves from Latin dancing into at-home work outs.

Cosmetics maker Shiseido interviewed 10,000 women across Asia to determine the ideal Asian face.

Leonardo da Vinci theorized that the ancient Grecian mathematical formula of the Golden Mean could be responsible for beauty in the human form. Today, Japan-based cosmetics maker Shiseido claims to have found the Golden Mean of Asian beauty in a marketing campaign for its Maquillage line.

Shiseido conducted research by interviewing 10,000 women in Japan and throughout Asia to find the common factors in women’s conception of the ideal face. They came to these results: women think that an ideal face is clear, small and shaped like an inverted triangle, with sharpe, big eyes and full lips. Eyes, lips and the rest of the face should all form well-defined features, with contrast among them.

Shiseido found that the ideal proportions could be recreated using five layers of shade and highlight. Shiseido has now established a special website to teach women “M (Maquillage) Rules” for using their products aspire to the ideal face.

Maquillage has creates a series of tutorials on its website for recreating the ideal face.

If imitation is any sign of success, Tokyo Girls Collection, the live fashion show-cum mobile commerce event created by Branding Inc., should be flattered.

A Japanese printing company, Toppan, has announced that it will diversify into fashion and launch a series of catwalk shows in Tokyo in September, according to WWD and Nikkei.

In a concept almost identical to TGC, Toppan will sell clothing and accessories worn by models in the shows via a mobile website. It will also sell magazines and DVDs related to the event. Toppan hopes to attract 10,000 girls in their teens and 20s paying at least ¥3,000 (US$30) for a ticket. It expects annual sales of ¥3 billion (US$30) by 2011, and plans to export the shows to other cities in Asia.

Branding Inc. (formerly Xavel) held the first TGC in 2005. Attendees can instantly buy clothes they see from an affiliated mobile website, fashionwalker.com. Versions of TGC took place in Beijing in 2007 and 2008. The most recent event was held in Tokyo in early March and featured brandsincluding Alba Rosa, BEAMS, Jill Stuart and Milkfed.