Retail Management

NAME : KRISHA JAIN

ROLL NO. 027
TOPIC: Retail Strategies of UNIQLO

 The Uniqlo brand story

In 1972, Tadashi Yanai inherited his father’s chain of 22 men’s tailoring stores, Ogori
Shoji in Ube, Yamaguchi. Shortly after becoming company president in 1984, he
opened a new store in Hiroshima – Unique Clothing Warehouse, which was later
shortened to Uniqlo. His promotion is well-documented as the catalyst for the
company’s rapid expansion. Inspired by his travels to Europe and the US, where he
discovered large casual apparel chains like Benetton and Gap, Tadashi Yanai saw
immense potential for Japan’s casual wear market and set goals to evolve the
family’s business strategy from suiting to casual clothing, buying fashion goods in
bulk at low cost. Tadashi Yanai also discovered that many foreign fashion chains
were vertically integrated, taking control of the entire business process from design
to production to retail. By 1998, he had successfully opened more than 300 Uniqlo
stores across Japan. However, one of the main challenges faced was consumer
perception of the brand – it was perceived to be a discount retailer selling cheap and
low-quality apparel to the suburbs. This perception completely changed when the
brand launched the Global Quality Declaration in 2004, a pledge to stop making low-
priced, low-quality garments. Since then, people started noticing Uniqlo for its high-
quality fleece jackets. The brand perception instantly shifted from being cheap and
low-quality, to being affordable but high-quality. Today, Uniqlo is a wholly-owned
subsidiary of Fast Retailing Company Limited and it is known for providing high-
quality private-label casual-wear at low prices. As of September 2019, the brand has
grown to more than 2,250 stores in 25 countries across Asia, Europe and US in just
a matter of 22 years. It is the biggest apparel chain in Asia with over 800 retail stores
in Japan alone. Fast Retailing’s market capitalization is over USD 49.2 billion and it
employs more than 56,000 people globally. For the year ending 2020, Fast Retailing
had revenues of USD 22 billion and a profit of USD 2.5 billion. The company’s home
market Japan contributed 38 percent to its total revenue, with one in four Japanese
said to own a Uniqlo down jacket. Fast Retailing has been growing at an incredible
rate in the past 5 years and its confidence is reflected in its revenue forecast of 9.5%
growth for FY2021. According to global management magazine Forbes, Uniqlo has a
brand value of USD 9.2 billion and is 84th on the list of the World’s Most Valuable
Brands. Much of it is credited to its founder’s strategy of innovation and its very
customer-centric culture. Uniqlo aims to be the world’s largest mass clothing retailer,
based largely on expansion in US, China and online. It is slowly catching up with
global fashion giant H&M’s market share, whose 2019 revenues stand at USD 24.3
billion. If Uniqlo achieves this ambitious target, it will dethrone Inditex (Zara’s parent
company) as the leader in global apparel. Uniqlo’s brand message encapsulates a
clear vision: “Uniqlo is a modern Japanese company that inspires the world to dress
casual”. The corporate strategy that has worked for Uniqlo so far is to “totally ignore
fashion” instead of chasing fast-fashion trends like its other competitors. The brand
philosophy “Made for All” positions its clothing to transcend age, gender, ethnicity
and all other ways to define people. Contrary to its name “Uniqlo”, its clothes are
simple, essential yet universal, enabling the wearers to blend them with their
individualistic style. This design driven clothing brand offers unique functional
performance owing to in-house fabric and design innovation. The company
distinguishes itself from its price driven competitors by branding its signature
innovations with names like HeatTech, LifeWear and AIRism. Uniqlo provides a
superlative physical shopping experience by impeccably managing its stores,
inculcating a positive employee culture and through in-store technology like video
tutorials that describe product attributes.
Some of the key brand success factors for Uniqlo include the

Delivery system supporting a clear brand promise: Two of the biggest

challenges for any brand is to define a clear brand promise and to consistently
deliver effectively on its brand promise across all touch points of the customer
experience journey. Successful brands are those that create supportive
organizational and operational structures that facilitate the implementation of
strategies to deliver on the brand promise. On one hand, Uniqlo has indeed
managed to successfully define a clear brand promise for itself to provide high
quality, performance-enhanced, universal, basic casual wear at affordable prices. On
the other hand, it has also created a strong delivery system to deliver on this brand
promise. The company’s product planning, design, manufacturing and distribution
capabilities are all in-house, which means that it is able to stay close to customer
needs based on what customers are buying in their stores, allowing them to save
costs on overproduction or unnecessary overheads. Stocks can be upgraded within
a matter of weeks or replenished within a matter of days. By focusing on core
products in a limited range of fabrics, Uniqlo is able to consolidate its fabric buys into
huge orders that give it greater negotiation power against suppliers which translates
into cheaper prices for its customers – serving its brand promise well.

Product development approach and efficient supply chain: Tadashi Yanai is

fond of saying that “Uniqlo is not a fashion company, it’s a technology company.”
And indeed, the brand’s approach to making apparel has more in common with the
iterative approach to product development embraced by the technology industry than
the cyclical, trend-driven rhythm of the fast fashion retail industry. While leading
competitor Zara has built the world’s largest apparel business based on rapidly
responding to fast-changing fashion trends, getting items from factory to store in
approximately two weeks, Uniqlo takes the exact opposite approach, planning
production of its wardrobe essentials up to a year in advance. Unlike its competitors
who sell a large variety of trendy fashion inspired by the global runway, Uniqlo
focuses on producing a few styles of urban practical basics. The company also runs
a highly robust supply chain. Through development of a detailed marketing strategy
by the marketing department for each season, merchandisers are able to adjust

production by style to align with demand well in advance. Concept meetings with all
key product creation teams are held about a year before a product is launched. Once
a garment is in production, about 400 skilled staff members visit production centers
to ensure quality and resolve outstanding issues. The Uniqlo global production
centers are located in Shanghai, Ho Chi Minh City, Dhaka, Jakarta and Istanbul.
Customer concerns are also addressed by the production department which keeps
the product teams plugged into what the end consumer thinks, as product and
marketing teams work closely together around strategy and execution.

Company culture and visionary leadership: In 2019, Tadashi Yanai was ranked
number no. 54 on the list over the best-performing CEOs in the world by Harvard
Business Review. Since 2000, he has provided a 700 percent shareholders return,
and the market capitalization of Uniqlo has increased USD 39 billion. He is credited
widely for the huge success and explosive growth of Uniqlo in the past 36 years due
to his creation of a strong company culture which focused on teamwork and
customer experience. Uniqlo’s focus on teamwork is demonstrated through its flat
organizational structure with employees greatly encouraged to provide suggestions.
The values and goals of the company are translated directly into processes and
measures exhibited strongly by employees all over the world. Company financials
are completely transparent to employees and sales and charted and posted daily.
The brand also places a huge emphasis on its retail store experience and
micromanages every customer touch point. Staff training is a huge priority for the
company as each new employee is trained for a remarkable 3 months – way above
global industry average. Every activity undertaken by its employees are recorded
and analyzed – from apparel folding technique, to the way retail staff returns credit
cards to customers with both hands and full eye contact. Employees are also taught
to interact with shoppers using six standard phrases including “Did you find
everything you were looking for?” and all customers are welcomed with “Welcome to
Uniqlo!”. In 2000, the company built a Uniqlo University in Tokyo in which 1,500 new
store managers are trained every year. One example showcasing Uniqlo’s focus on
the customer experience is Tadashi Yanai’s decision to conduct all operations in
English in 2012 – a decision considered rare in Japan. This has contributed to its
global success and is something other aspiring global companies can learn from. In

addition, Uniqlo employees constantly look to improve their internal processes and
consequently the customer experience. In 2004, Uniqlo opened its first large-format
store (over 2,000 square metres in size) in Osaka after observing its competitors
Zara and H&M do the same, leading to an improvement in customer satisfaction and
profitability. The Uniqlo Customer Center also uses customer feedback to constantly
improve its products.

High dedication to innovation: As Peter Drucker said, innovation and marketing

are the only two functions of any organization. Uniqlo understands this well – the
brand is well-known for its fabric innovations. The company also hires Japanese
textile masters called “Takumi”, who work closely with factories in China and Japan
to continually develop new high-tech fabrics for Uniqlo. One of Uniqlo’s signature
innovations is HeatTech, a fabric developed in conjunction with Toray Industries (a
Japanese chemical company) that turns moisture into heat and has air pockets in the
fabric to retain that heat. The HeatTech fabric is thin, comfortable which has enabled
the brand to create stylish designs which are very different from the standard
traditional warmth clothing segment. The HeatTech innovation keeps improving over
time with new fiber technology, allowing the brand to come up with different
collections of thermal clothing. In 2003, 1.5 million HeatTech products were sold
while in 2012 over 130 million units were sold across 250 items. Besides HeatTech,
Uniqlo has also created AIRism (a soft fabric with quick-drying inner fabric), LifeWear
(a blend between casual and sportswear) and UV Cut (material designed to prevent
90% of ultraviolet rays from reaching the wearer) technologies. These new fabrics
are all branded and copyrighted, which poses a struggle for competitors who want to
try and attempt to match this point of differentiation. Tadashi Yanai has been quoted
to say that Apple is its largest competitor because of the company’s desire to be the
most innovative company in the world.
 Uniqlo brand architecture

Uniqlo caters apparel to mainly 3 customer segments: Women, Men and Kids &
Babies. The brand is divided into five sub-brands separated by style but housed
under the same Uniqlo store, within which Uniqlo showcases its collections:

Outerwear: Uniqlo’s outerwear comprises of jackets and coats of different styles and
materials, hoodies and parkas to suit different weather conditions and occasions,
and the famous Ultra-Light Down jacket that is extremely thin, light, and comfortable
but yet provides excellent insulation and warmth.

Tops: This category includes functional and comfortable dresses, shirts, wrinkle-
resistant blouses, t-shirts and UT (Graphic t-shirts) for women made from a variety of
materials. Sweaters and cardigans are also included, with most styles made with the
brand’s signature UV Cut material or its soft and luxurious Cotton Cashmere. For
men, it includes formal and casual shirts in a variety of fits, t-shirts, UT, sweaters and
cardigans, and flannel. Its range of polo t-shirts are made in 2 different materials:
AIRism and Dry Ex (extra breathable mesh in a seamless construction).

Bottoms: This category for women includes shorts and skirts to suit all lifestyle
needs, jeans that come in a variety of cuts, leggings (including maternity leggings),
smart pants, ankle pants, casual pants and lounge bottoms. Its men’s bottoms
include smart pants, shorts, jeans, ankle pants, casual pants, lounge bottoms and its
most recent innovation – the Kando pants, a new lightweight, stretchable and fast-
drying material with Airdots pockets. In line with its brand mission to celebrate
individuality, Uniqlo offers free alteration services for pants that cost above a certain
amount.

Inner-wear: Uniqlo has designed its inner-wear with comfort as a predominant

focus. For women, this includes bras, bra tops, inner tops, shape wear, shorts and
underwear, socks and leg-wear, and HeatTech (Regular, Extra Warm, and Ultra
Warm). For men, this includes inner tops, trunks, boxer briefs and briefs, socks and
leg-wear, and HeatTech.

Home wear & Accessories: Uniqlo’s home wear & accessories category includes
lounge wear (pajamas, lounge pants, drape pants and room shoes), shoes
(sneakers, flats and heels), belts and other accessories including bed sheets, gloves,
hats, caps, scarves, sunglasses, bags, towels, blankets and its most recent addition,
the AIRISM face masks.

Uniqlo brand communication strategy

Until the digital age started to gain rapid global momentum, Uniqlo has traditionally
relied on marketing flyers and TV commercials as its primary means of advertising.
Today, it uses a plethora of methods to communicate its brand position and ideals,
including its unique in-store environment, celebrity brand ambassadors (called
Uniqlo Global Ambassadors), digital marketing, collaborations with designers and
brand campaigns.

In-store environment: One of Uniqlo’s main brand communication methods is its in-
store environment. Through its wide aisles, bright lights, neatly stacked shelves and
beautifully presented displays creating a comfortable and welcoming shopping
experience, Uniqlo communicates its ideal of simplicity and essential basics.
Although the brand intentionally limits the number of designs it produces, it
compensates for this and distracts consumers from the lack of choice by stacking its
apparel from floor to ceiling, creating an illusion of choice and plenitude. It also has
many digital screens in-store explaining the practical benefits of its fabrics and
apparels. Compared with other fast fashion competitors whose stores are jam-
packed with clothes, lack order and do not have a specific focus on customer
service, Uniqlo’s in-store experience stands out and contributes heavily to effective
communication of its brand philosophy.
Uniqlo Global Ambassadors: Similar to many global brands, Uniqlo also
uses celebrity endorsements to extend the brand’s image and connect with the
masses. For Uniqlo, the most important attributes it looks for in its brand
ambassadors are great resilience and strong character to overcome adversity.
Uniqlo currently has 6 Global Ambassadors:

 Japanese international snowboarder Ayumu Hirano

 Swiss professional tennis champion Roger Federer

 Japanese global tennis medalist Kei Nishikori

 Japanese international wheelchair tennis champion Shingo Kunieda

 Scottish international wheelchair tennis champion Gordon Reid

 Australian world-class pro golfer Adam Scott

The Uniqlo Global Ambassador partnership typically lasts for 5 years with the aim of
having the ambassador promote the Uniqlo brand and its clothing worldwide, as well
as collaborating on future product lines and co-developing functional wear.

Digital marketing: Being one of the first brands to successfully launch the digital
marketing campaign ‘Uniqlock’ back in 2007, Uniqlo is definitely one of the
forerunners to use this brand communication channel. The viral marketing project,
designed to build brand awareness internationally, featured a clock with spliced clips
of well-choreographed dancing and catchy lounge music all timed to match the
ticking. It ran all year round – in summer, the girls dancing wore polo shirts; in winter,
cashmere; and at midnight they slept. The web tool, Uniqlo, was designed to include
a blog widget so the clock could be embedded into blog sites. By January 2008,
more than 27,000 widgets from 76 countries were circulating, and the widgets and
website that accompanied the campaign had been viewed 68 million times in 209
different countries. Uniqlo won the brand a multitude of major advertising awards,
including a Grand Prix at Cannes Lions Festival. Dasuke Hase, Uniqlo’s public
relations and global marketing communications spokesman explained that the
campaign was all about communicating with customers in a way that travels around
the globe. More recently, the brand’s 2019 international campaign
#UTPlayYourWorld also followed in Uniqlo’s footsteps, partnering with short-form
video giant TikTok to encourage customers to show off their Uniqlo UT range outfits
in short videos, which are screened on in-store monitors.

Collaborations with designers: In line with its brand promise to highlight each
individual’s unique individual style, Uniqlo collaborates with designers to create
unique styles. Although this brand communication channel was arguably made
famous by competitor H&M, Uniqlo has proven that it started its own designer
collaboration strategy since 2008 when it tapped designer Alexander Wang to create
a five-piece dress collection. By collaborating with global designers, Uniqlo is also
able to gain quicker access into markets where it has a weaker brand awareness,
like the US and European markets.

Here are some notable collaborations that Uniqlo has done in recent years:

 Jil Sander’s “+J”: This collection debuted in 2009 and lasted for five
seasons. This collection includes quality tailored basics for formal and smart
wear

 Theory’s “T Down”: This collection was introduced in Fall/Winter 2012. A

collaboration between New York’s contemporary label Theory and Uniqlo,
pieces boasted color-blocked neutrals of darker color palettes with styles
including the Banff Classic Puffer Vest and Big Sky Classic Puffer Jacket

 Undercover’s “uu”: In 2011, this collection was launched as a family-friendly

collection with lines for men, women and children at very accessible price
points. For Undercover, it proved beneficial as it allowed consumers who
could not afford Undercover apparel to own the designer’s designs. This
collection was revived in 2014 solely for children’s wear

 NIGO’s “UT”: Graphic t-shirt designer NIGO had left his own label A Bathing
Ape in 2013 to become Creative Director of Uniqlo’s UT line. UT is known for
its endless collaborative T-shirt collections, including names such as Pharrell
Williams, Medicom Toy, Andy Warhol, and Disneyland
  Lemaire’s “Uniqlo U”: Uniqlo has partnered with Paris designer Christophe
Lemaire since 2016 to design flexible and versatile pieces that for everyday
wear under the Uniqlo U line and lead Uniqlo’s Paris R&D Center. In July
2018, Christophe Lemaire was reported to have extended his contract with
Fast Retailing for another 5 years. Uniqlo has also announced its acquisition
of a minority stake in the Paris-based label, deepening its relationship with
Lemaire. This will allow Uniqlo to leverage on Lemaire’s apparel design
expertise and creative talent network

 Uniqlo x Marimekko: Launched for Fall/Winter 2020, Uniqlo has partnered

with Finnish fashion company Marimekko known for its bright colours and
prints. The limited edition holiday collection evokes the warmth and coziness
of being home with family and friends

Global brand campaigns: Although it has been a while since the Uniqlo brand has
gone international, it was only in 2016 that Uniqlo launched its first global brand
campaign titled “The Science of LifeWear” (Uniqlo has launched local and regional
campaigns previously but none were truly global). In the series of videos introducing
the brand and its collections (Jeans, Jogger pants, Ultra-Light Down, Knitwear and
HeatTech), Japanese streets-capes unwind in slow motion, and people walk on
streets wearing simple but chic clothes. A narrator starts in with questions: “Why do
we get dressed? Do you choose based on your mood or the weather? Do you dress
to fit in? Do you want to fit in?” It finally ends off with “There is no one answer. But to
make clothes for life, we’ll keep asking.”This unusual, philosophical way of
introducing the brand is edgy and helps solidify Uniqlo’s relentless commitment to
quality, functionality and style through LifeWear. Mr John C. Jay, Uniqlo’s President
of Global Creative says that the campaign is an opportunity to present the brand’s
mission and its Japanese heritage, which differentiates it from the competition, and
to harmonize its brand image internationally. It represents an important next step for
Uniqlo in its ongoing mission to become a truly global and inspirational apparel
brand. Going forward, the brand wants to foster closer two-way communication with
customers. Uniqlo has committed to use the information collected through its website
and mobile app to analyze customer data and provide them with information that
best suits their individual needs. Additionally, Uniqlo needs to adopt, imbibe and
leverage social media and digital platforms in its advertising and communication
strategies deeper going forward.

Uniqlo’s global sustainability approach

Sustainability has been a hot topic in business for the last decade and is now quickly
becoming a must-have hygiene factor for companies that want to resonate with and
win the loyalty of its global customers. One of Tadashi Yanai’s 23 Management
Principles is to contribute back to society. The brand strongly believes that
company’s value is intrinsically linked to the value it brings to society as a whole and
that successful companies must serve society. It believes that companies that only
focuses on profit will not survive. Its corporate statement “Changing clothes.
Changing conventional wisdom. Change the world.” reflects the company’s desire to
transform society and enhancing the environment and lives of all its stakeholders.

Fast Retailing’s sustainability approach and efforts comprise of 6 pillars:

 Create New Value through Products and Services: By procuring raw

materials responsibly with concern for animal welfare, the environment, and
cotton farmers, Fast Retailing strives to produce clothing which are
sustainable even after they are no longer worn

 Respect Human Rights in Our Supply Chain: Fast Retailing forms strong
partnerships with supplier factories and requires them to comply with its Code
of Conduct for Production Partners to safeguard human rights and working
conditions in our supply chain. Its Responsible Procurement Policy also
requires production orders to be made following procedures to avoid sudden
increases in production volume that would result in excessive overtime hours
at its partner factories

 Respect the Environment: Through stakeholder collaboration and

technological innovation, Fast Retailing is committed to eliminating waste in
its operations and supply chain. It is committed to reduce water use by 15%
and greenhouse gas emissions in its Uniqlo stores by 10%, by 2020
  Strengthen Communities: Fast Retailing supports communities in three
ways – communities where it operates its stores, communities surrounding its
partner factories, and communities providing shelter to refugees and
displaced persons. In fiscal year 2018, 30.29 million items were donated to 65
countries and regions through its All-Product Recycling Initiative

 Support Employee Fulfillment: Fast Retailing has established an Employee

Engagement Policy with three pillars: equal opportunity and diversity;
education and development; and healthy, secure, and safe workplaces.
Almost every Uniqlo store in Japan hires at least 1 staff member with
disabilities, and is targeting to even the employee gender ratio after achieving
its goal of filling 30% of its management roles with women in 2018

 Corporate Governance: Fast Retailing strives to build an effective corporate

governance system based on its Code of Conduct which includes a corporate
auditor governance model to enhance the independence of its Board, and an
executive officer system to enable timely decision-making and operations

These 6 pillars demonstrate Uniqlo’s commitment to give back to society through

various initiatives.
 Uniqlo’s future brand and business challenges

Despite its huge success so far, Uniqlo faces its own global business challenges. As
noted above, the brand takes a very different strategy from its fast fashion
competitors like Zara, H&M and Gap. What are some of the strategic business
considerations Uniqlo needs to have in mind in its strive to be the world’s top apparel
retailer?

Differentiation through innovation: It has not been all plain sailing for Uniqlo. Its
biggest dilemma is probably brand differentiation as it tries to be “everything for
everyone” – a known brand strategy mistake. However, Uniqlo has managed to take
the focus off the ubiquity of its products by emphasizing its innovations in the fabrics.
Although Uniqlo has already made a name for itself in the industry for its innovative
fabrics, it needs to treat itself as its biggest competitor and continually think of ways
to outdo itself. Innovation is therefore a key factor that will strongly influence the
future of the Uniqlo brand.

Focus more on quality, less on price: For Uniqlo to effectively compete and
maintain its strategic advantage and differentiation, the focus needs to shift away
from price but towards quality. Even though Uniqlo enjoys high levels of appeal,
evident by the serpentine queues outside its stores when it launches in new markets,
there is still a need for Uniqlo to start investing in building a strong brand positioning
on the quality of its apparels and aggressively communicate this.

Leveraging on digital: Fast Retailing has announced that it is making progress on

its Ariake Project, which aims to transform the apparel retail industry into a new
digital consumer retail industry. It is building a supply chain that uses advanced
information technology to create seamless links between Fast Retailing and its
partner factories, warehouses, and stores worldwide. While this is a commendable
digital supply chain effort and reflects how the company has comprehensively
thought about how to leverage digital internally, it is also important to remember the
customer focus. Today, people of all ages use the Internet and this is transforming
the way consumers shop.

Uniqlo first ventured into e-commerce by launching its online store in the US in 2012.
Since then, it has launched its online stores across Southeast Asia. Uniqlo
understands that it needs to integrate its physical stores and virtual stores, and
create a true omni-channel experience. Online sales currently account for 9.9% of
Uniqlo’s total global sales and the brand aims to expand this to 30% by launching
more online services. Different forms of market analysis strongly point towards a
scenario wherein spending on mobile commerce will overtake e-commerce in the
next 3 years. The Chinese fast fashion apparel market is a testament to that. On an
average, most brands get about 15-20% of their website traffic via mobile devices
and this is growing rapidly. Uniqlo has proved to be at the forefront of the technology
trend as it launched its first mobile app in 2014 in Singapore, its regional Asia
commercial hub. With a clean, informative and user-friendly interface, the brand has
done a good job in allowing consumers the convenience of buying their products on
the go. However, there were some unfavorable reviews on its post-purchase
experience. Uniqlo needs to consider the entire online customer journey from pre- to
post-purchase, in order to make mobile shopping not only an effortless experience
but also a delightful one. In addition, the brand needs to gather retail analytics in
order to analyze digital consumer patterns and devise strategies to improve its sales
in its digital channels.

Next generation ownership: With the intense and multi-faceted technological and
business disruptions taking place over the past decade, leadership in the 21st
century will be influenced by constant change, geopolitical volatility, and economic
and political uncertainty. Tadashi Yanai once thought he would retire from day-to-day
operations by the time he was 60, but at the age of 70, he still holds the company’s
operational reins as chief executive. To effectively manage the above leadership
disruptions, Uniqlo needs to quickly devise a succession plan and instill a next
generation leadership team.
Despite Uniqlo’s global reach and product standardization, it still needs to constantly
find new ways to serve local fashion needs and preferences of its consumers across
the globe. This will be a challenge for the brand’s leadership in the next decade.

Global competition: Uniqlo comes in third in global ranking of fast fashion retailers
with sales of USD 22 billion, just behind Spain’s ZARA (sales of USD 33.7 billion)
and Sweden’s H&M (sales of USD 24.3 billion). Nonetheless, Uniqlo’s quick growth
in recent years has seen it overtaking America’s Gap (sales of USD 16.4 billion),
who has been long dominant in basic wear. Looking ahead, there is indeed a lot that
Uniqlo needs to do to meet its ambitious goal of being the world’s largest fast fashion
retailer, but it is without doubt on track to challenge the global players in the fashion
retail industry.

International expansion: When a brand starts to gain popularity in its country and
region, the next natural step would be to look to expand globally. This is especially
so for Uniqlo, but the brand has met with considerable challenges. Up till now, the
brand footprint and awareness are relatively low outside of Asia, something the
company is tackling through global retail store expansion programs, advertising and
marketing. In its products, notable differences between global customer groups have
been overlooked and Western consumers often complain about its clothes size and
fit to body shape. To tackle this, Uniqlo has started partnerships with Western
designers like Christophe Lemaire and launching collections like the Uniqlo U line.

In terms of non-organic growth, the brand has its own share of acquisition talks. In
2012, its first step to penetrate the US market saw Fast Retailing paying USD 290
million for J Brand, a California-based denim firm. In 2004, it purchased Theory, an
affordable luxury brand which is quickly developing into a one billion dollar business.

More recently, Uniqlo had wanted to enter into a merger with J Crew Group in 2014,
but the company eventually pulled out of the deal due to the hefty USD 5 million
price tag. Run by well-known executive Mickey Drexler, J. Crew is a multi-channel
retailer and distributor of women’s, men’s and children’s apparel, shoes and
accessories, and has deep expertise about the retail infrastructure in the US, The
deal would have given Uniqlo access to 400 stores in the US. Moving forward,
Uniqlo needs to be very focused in its international expansion strategy with clear and
achievable plans tailored to each market.

With profits declining due to margin erosion over the years and an impairment
charge on J Brand premium denim clothing, international operations are getting
increasingly important for Uniqlo to sustain its profitability. It is looking at specifically
targeting the US and China markets. Currently, Uniqlo only has a few stores in the
US but its brand popularity is steadily increasing due to its bold and clear colors
design aesthetic, and value-for-money cashmere products.
Conclusion: Uniqlo’s runway to become a global Asian brand is
massive

The Uniqlo brand was set up to be all about the Japanese philosophy of simplicity
and essentiality, and this is reflected throughout the brand’s marketing,
communications, and operations. It is indeed impressive how Uniqlo has managed to
transform from a single inherited men’s tailoring shop from Tokyo into a global
casual wear giant and one of the most impressive brands from Japan and Asia
today. Under Tadashi Yanai’s effective and visionary leadership, Uniqlo’s parent
company Fast Retailing targets to become the world’s largest fast fashion retailer.

One of the secrets behind Uniqlo’s success is its strong delivery system supporting a
clear brand promise, and its relentless commitment to innovation. By clearly defining
its brand promise to provide high quality, performance-enhanced, universal, basic
casualwear at affordable prices and by running a robust and efficient supply chain to
produce its apparel, the brand has created an environment where it continually
exceeds customers’ expectations.

Building and sustaining a brand that is relevant and one that resonates with the
customer base is one of the most difficult aspects of building a strong brand today.
Uniqlo, with its presence in diverse markets, has managed to hold up well to this
challenge of building a relevant and resonant brand personality.

There are indeed many opportunities that Uniqlo can leverage in order to reach its
goal of becoming the largest global apparel retailer. In particular, the company plans
to focus on growing Uniqlo internationally and expanding online sales. With Uniqlo’s
impressive company culture, bold and daring leadership, and proven consistent
financial growth in the past 15 years, it is no doubt that the Japanese fast fashion
retail brand is on the right path to global success.
 THE END
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