UNIQLO is currently the leading fashion 'giganto'(giant) of Japan. As the economic collapse was drawing to an end, UNIQLO, a local retailer in Harajuku Tokyo(Fashion District of Tokyo), based its strategy on intuition that people stopped buying things excessive going beyond their budgets, but still spent on seeking new things, and things that were in trend. UNIQLO did an amazing job creating their brand equity giving the finger to those that doubted that low price cannot go without being associated with low quality. Through this posting, I'll try to explain what value UNIQLO presented to their customers, at the same time, what efforts they are putting in to put them ahead of H&M, Zara in most of Asian region, centre of their business.
Retail Value Proposition
Most UNIQLO products do not go beyond $200. For example, Jeans are sold at a fixed price, $25. Every year, UNIQLO launches T-shirts that they collaborated with Designers called a 'UT' Project. These t-shirts are sold only for a short period of time, just after April to around when summer is over. Selling T-shirts around $15 each, UNIQLO drops their price drastically when the season comes to an end. Bundling 3 shirts for the price of one. However, this is a guaranteed 'sold-out' strategy since same shirt would not be on sale the next year. Starting at a low margin products and dropping its price even lower reinforces customers the image that UNIQLO is a affordable brand. Having 6 major production plants in China helped them to decrease costs in spite of holding a mass customization strategy.
Personally, I believe UNIQLO's success was based on variety of products, offering the feeling to the customers that they cannot usally get buying a cheap product. For a fashion product, when the price is reasonable and also in style, the product is usually saturated and goes out of style since mass number of people eventually happens to own it somehow. However, by presenting more than 200 designs of printed t-shirts every season. For example, they collaborated with pop artists, record labels, and brand designers. The most successful collaboration was with cartoonist Murakami of Japan, graphiti artist Basquiat of U.S. The product attracts variety of tastes and preferences making it difficult for the mass to own the same shirts and tees. Also, since it did not own a luxurious image or possessed a strong brand value, they did not print their brand label to any of their products except for the inside label. This provided esteem to customers wearing UNIQLO without having people noticing that they are wearing a cheap brand.
Another thing UNIQLO differentiated was the variety of fits of clothes. UNIQLO clothes were generally slim, but they kept more size variations. For example, while Levi’s jeans have sizes in even numbers like 30 X 32, 32 X 32, UNIQLO sizes vary in centimetres, which offered a much better fit for a larger number of customers.
Appealing to the General in a UNIQ way
One obstacle that they faced was how their value might only reach out to the young clientele. UNIQLO set up a partnership with Wieden & Kennedy, a advertising firm of U.S. There were two types of Ads they promoted. One was showing famous figures of many industries around the world. This was to show that the clothes were targeted not only to the young trendy boys and girls but also to the conservative adults as well. While UT project focused on attention-seeking young crowd, dress shirts, cardigans, knits appealed to an older segment. Second ad was to show free, lively image of UNIQLO. The whole AD was sometimes painted red, or 30 second clip of few people dancing in UNIQLO colours. The bright colours and movement presented fast, trendy, fun image of UNIQLO.
The campaign was a huge success. Currently CEO of UNIQLO is listed on Japan’s most wealthiest people. The company UNIQLO through 2000~2004, UNIQLO increased its sales by 400 % compared to year 1999. Currently UNIQLO is #1 clothing line retailer in Japan. They have expanded to Korea, Hong-Kong and mainly most Asian countries. Recently they opened a store in New York Soho. Their campaign, mass customization is proven each year to be more than effective. Currently they are trying to move up their image to have more luxury. In 2009, Jill Sander has confirmed that she would become a style consultant for the firm and launch some collaboration product lines as well. I wonder how this will turn out.