Since the record-breaking earthquake and devastating tsunami, Japan has been top of mind for concerned citizens across the globe. Even before this disaster, though, savvy Japanese consumers were held in high esteem by designers and retailers looking to woo this trendsetting group. Where they once equated higher prices with higher quality, more and more they are spending less to achieve their look.

"I think that the mainstream is low-priced fashion shoppers, although not necessarily fast fashion," says Ayako Kaneta, Executive Account Manager, Global Product Supply Chain for Cotton Incorporated. "But I think that we'd do better to understand that they are mixing low-priced fashion and luxury fashion together. This is maybe one of the reasons why Japanese look savvy."

Japanese consumer expenditures on clothing have been falling for years, dropping 5% from 2008 to 2009, according to Euromonitor International, before dropping 9% from 2009 to 2010. Euromonitor projects further declines of 4% in 2011.

In Japan Real Time, the Wall Street Journal blog on Japan, Nicole Fall, co-founder of Tokyo-based consumer research agency FivebyFifty and new Asia consumer goods and retail tracker Intapac.com, writes that Japan is "in a state of 'post consumerism' and quite frankly people no longer get the same satisfaction and thrill from designer purchases as they once did."

A reluctance to spend on extravagant items stems from the fact that 63% of Japanese consumers are "very" or "somewhat pessimistic" about the Japanese economy, according to the Cotton Council International and Cotton Incorporated Global Lifestyle Monitor survey. That is no wonder, considering an economic slump that has stubbornly persisted since 1991. Men are significantly more likely than women to be "very" or "somewhat pessimistic" about the Japanese economy (67% versus 58%), and it is unclear how the devastating earthquakes and tsunami will have a further impact on their outlook.

This pessimism, though, is not unfounded; a fourth-quarter downturn limited the size of Japan's economy to its current level of $5.47 trillion, according to the Japanese Cabinet Office. Unemployment held steady at 4.9% in January, but consumer spending dipped for the fourth straight month. Consumer confidence rose to a higher-than-expected 41.1 in January, from 40.1 in December, though anything below 50 is still considered "pessimistic".

These gloomy numbers continue to have tangible effects at the register; Global Lifestyle Monitor data reveal that 48% of Japanese consumers say their outlook on their financial situation has kept them from purchasing certain items and services, including apparel (65%). Women are also more likely than men to have given up purchasing new clothes (72% versus 58%).

Kaneta, from Cotton Incorporated, says apparel spending is in a soft and slightly decreased downward trend. She adds that much of this can be attributed to a stagnating annual income, given the increasing cost of social programs and an aging population. As Kaneta notes, "Apparel spending can't be the first priority under limited income."

The percentage of Japanese consumers who buy clothing on sale at least some of the time has increased over the last decade (from 77% in 2001 to 86% in 2010), along with the percentage who are willing to sacrifice a little garment quality to get a better price (from 48% to 56%, respectively).

"Price-wise, many apparel retailers and manufacturers said consumers would not buy if the prices were not low enough," Kaneta says. "For example, some specialty stores started to sell $12 jeans (Yen 980) in 2009, and then competing stores would introduce $11 (Yen 880) jeans. These prices were amazing. Of course, some consumers worried about the quality when they heard about the prices. But sales were very good. Most consumers said the quality was not bad."

Japanese consumers may have relied on these low prices since 33% reported having less money to spend on apparel, according to Global Monitor data. Among those consumers, 66% are waiting to buy clothes when they go on sale.

When they do spend money on apparel, Japanese consumers rely on a wide range of shopping channels; 23% of consumers say they buy most of their clothes at specialty stores, followed by off-price stores (22%), department stores (17%) and chains (15%), according to the Global Monitor. Price is said to be important to the apparel purchase by 95%, second only behind color (97%) and ahead of quality (94%), finish, style and performance features (91%), durability (82%) and fiber content (78%).

This desire for value-priced apparel led to fast-fashion brands such as H&M, Zara, and Forever 21 establishing locations in the Japanese market, with new units opening regularly. These retailers in particular have benefited from having a young target demographic with fewer financial burdens and, thus, more money to spend on fashion than older generations.

Global Monitor data bear this out; Japanese shoppers aged 15-to-24 were significantly more likely than those aged 35-to-54 to say they planned to purchase more apparel in the next 12 months than they did in the previous 12 months, according to the Global Monitor survey.

There are bright spots, though; the Global Monitor finds Japanese consumers of all ages shop for clothes for themselves about once every three months, on average. And women are significantly more likely than men to "love" or "somewhat like" clothes shopping (88% versus 53%). Moreover, the Global Monitor survey reveals 78% of Japanese consumers purchased more (18%) or the same amount (61%) of apparel this year compared to last year.

To better reach these shoppers, Gap Inc. recently launched its e-commerce site in Japan and is planning to introduce its lower-priced Old Navy chain. The company opened its first Japanese Gap store in 1995 and now has 130 directly owned Gap stores and outlets, plus 29 Banana Republic stores and outlets. Upon opening its Gap flagship store in Ginza in early March, John Ermatinger, president, Asia Pacific region, said, "Japanese consumers are among the most astute fashion consumers in the world, and also in Asia. They use the term 'fast fashion,' but make no mistake � they don't mean throwaway clothes that go out of style in a few months."

Ermatinger says that Japanese shoppers "demand quality, versatility, and enduring substance." And for many, quality often translates to natural fibers. More than half (51%) are willing to pay more for clothes made from natural fibers than synthetics, according to Global Monitor data. And 8 of 10 prefer the clothes they wear most often be made of cotton and cotton blends. Slightly more than 7 of 10 say cotton and cotton blends are the fibers best suited for today's fashions.

Out of the downturn, it seems, a new trend setter has emerged: the Japanese consumer who may be paring back slightly on clothing purchases, but who still demands quality apparel made from natural fibers. How will this trend manifest itself in other countries? Only time will tell.