Mitsukoshi Isetan Group released a total sales of various departments for the second quarter of 2017, including 105.7 billion yen in apparel (composition ratio: 35.2%) and 32 billion yen in cosmetics (composition ratio: 10.7) %). In addition, in the three main shops of Mitsukoshi Isetan Group, the sales of tax-free goods at Ginza only reached 10.937 billion yen, accounting for 26.8% of the total sales (Note 1). In January 2018, Ginza's apparel sales totaled 2.113 billion yen, and sales of cosmetics and other miscellaneous goods reached 2.412 billion yen, which outweighed clothing.
For merchants, the sales of cosmetics not only benefited from the increase in foreign customers, but they had almost sold products at no price reductions, and their sales efficiency per square meter had exceeded that of any other goods. The needs in buying consumable items every 3 months is more provocative than the type of clothing that is not frequently purchased. The department stores that took note of this are still in the minority. The former sales strategy shows that items that are not sold, not only occupies precious space, but the manufacturers will in turn also reduce the production costs in order to cope with the inefficiency of the sales which will result in low quality products. The vicious cycle leads to customers who are pursuing high quality products and those who come to department stores left unsatisfied. Its best for major department stores that they should face this problem and take new actions to promote the sales of their products.
Note 1: The duty-free sales of Isetan Shinjuku Main Store accounted for 10.3% of the total sales, and Mitsukoshi Nihonbashi headquarters was 1.8%.
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