Tradition is a powerful marketing tool, which can open up opportunities that might seem out of place if attempted outside of their natural territory. A fascinating idea that seems locked into Japan is fukubukuro, or ‘lucky bags’. This blog looks into this phenomenon, and explores why it’s something brands should try.
What is fukubukuro?
Fukubukuro, or ‘lucky bags’, are a popular Japanese tradition during the New Year holiday season. These bags, typically sold by retailers, contain a variety of merchandise worth more than the price of the bag itself. Customers are attracted to the element of surprise and the potential to get a great deal on items they may not have otherwise purchased.
The word ‘fukubukuro’ literally means ‘good luck bag’. Fuku means ‘good luck’, and fukuru means ‘bag’, although the ‘f’ becomes a ‘b’ because of a Japanese linguistic trait.
Like advent calendars during Christmas, fukubukuro have a strong seasonal demand, with a peak in interest and sales during the month of December leading up to the New Year. Despite being a one hundred year old tradition, fukubukuro remains a beloved part of modern Japanese culture, with many customers eagerly anticipating their release each year. Croud’s client, a travel beauty retailer, saw their fukubukuro for the 2022 new year sell out in just 48 hours.
Interest in 'fukubukuro' according to Google Trends:
Why you should get on the fukubukuro train
If you’re selling in Japan, it’s important that you ensure you know your position within the market in order to make certain that creating your own lucky bags is worth your while and definitely not a loss-making gimmick. It’s also best practice to make sure your deals are visible to search engines in time for the New Year peak.
Western brands can benefit in many ways from incorporating fukubukuro into their marketing strategies. Not only is it a unique and exciting way to drive sales and foot traffic to stores, it also allows for the opportunity to clear out excess inventory.
Let’s take a look at some of the benefits:
- Sell clearance products faster. While there will always be some lines that simply don’t sell, the lucky bag lets you legitimately offload it to customers. It’s particularly good when there’s a bundle of highly desirable items alongside those you’ve struggled to sell – it’s a win-win for consumers and retailers.
- Grab attention. If people love your brand, there’s a good chance they’ll take the plunge to grab a bargain, but you can also pick up some new customers if your deal is good enough. Lucky customers who find items worth way above the retail price can get you some valuable PR and social media exposure.
- Provide a better customer experience. Consumers love the fukubukuro experience and since it’s technically a win-win gamble (the price paid always covers the value), it’s great for goodwill towards your brand. You’ll also be showing yourself as sensitive to local traditions, which foreign-owned companies must be careful to get right.
- Boost average order value. A typical fukubukuro for a fashion brand is around the $100 mark, which can mean your average order value is higher than usual. Of course, you still profit from the markup, but you’ll eliminate the costs of storage, recycling and disposal of unsold and unsellable items.
- Release new products. In an interesting twist to the concept, some retailers will actually put new lines in the bag, not just last season’s range. That can provide a unique incentive for fans of the brand to get their favourite labels’ offerings ahead of everyone else. It’s also good for getting feedback and fan reviews, which is valuable from a product development and marketing perspective.
Is fukubukuro a bargain basement deal?
To Western eyes, fukubukuro might seem like a low-budget deal, which could only work for mainstream, high-volume brands, but would fail at the luxury end of the market. Thinking that would be a mistake however, as the lucky bag phenomenon is embraced annually right across the spectrum, from budget brands all the way up to luxury labels.
There have been lucky bags valued well in excess of $1 million by jewellers and high fashion names. While that’s still solely the preserve of the wealthy, it proves that the concept itself is not cheapened.
An example of a luxury brands’ lucky bag:
Preparing a fukubukuro: Where to start?
As a retailer preparing to offer lucky bags to your Japanese customers, there are a few steps you can take to ensure success:
- Plan ahead and make sure you have enough inventory to fill the fukubukuro. It's important to have a good selection of merchandise to choose from.
- Consider the value of the items in fukubukuro. Customers are attracted to these bags because they offer the potential for a great deal, so make sure that the items included are worth more than the price of the bag.
- Retain some mystery. One of the key reasons that fukubukuro are so popular is the thrill of surprise when opening them. As a retailer offering these bags, it's important to strike a balance between maintaining the element of mystery and highlighting the potential for customers to get a good deal or rare items. When promoting fukubukuro, avoid spoiling the fun by revealing too much about the contents of the bags. Instead, focus on the potential for customers to get a great deal or potentially rare items.
- Promote fukubukuro to your customers. This can be done through in-store signage, social media posts, email campaigns and other marketing efforts.
Tapping into this popular Japanese tradition during the New Year holiday season offers brands a unique and exciting way to drive sales and foot traffic to stores. Overall, fukubukuro can be a win-win for both brands and consumers, and can be a valuable marketing tool for brands to excel in Japan and beyond.
