Uniqlo sets a high standard for the industry
What is the X-factor that separates the great retailers of the world – both past, present, and future – from their competitors, and captures the imagination of a universal audience?
Is it their brand, product, offering, people, heritage, complex simplicity, timing, alacrity of thought and process, aptitude for risk, forgiveness for errors, or simply some luck along the way?
All of the above?
Through the aperture on this lens, my attention turns to Uniqlo.
Their story begins in March 1949, when the company Ogori Shōji was founded in Ube, Yamaguchi. On June 2, 1984, it opened a unisex casual wear store in Fukuro-machi, Naka-ku, Hiroshima, under the name “Unique Clothing Warehouse”. Initially, the brand was going to be registered as a contraction of “unique clothing”.
The Japanese brand’s journey from a single men’s tailoring shop in Tokyo to global casualwear giant offers a wealth of lessons. Its success is built on a foundation of clear brand identity, relentless innovation, strong company culture, social responsibility and digital savvy.
The power of a clear brand promise
At the heart of Uniqlo’s success lies a clear brand promise: to provide high-quality, performance-enhanced, universal basic casualwear at affordable prices.
This simple yet powerful mission statement drives every aspect of the company’s operations, from product development to customer service, and it is lived and breathed by everyone on the team, no matter their role.
The Japanese doctrines of Bushido, which teaches the philosophy of loyalty and honour, and Shitsuke, which is discipline, heavily influence life at Uniqlo.
Japanese people are proud of what they do and demonstrate self-discipline that is driven by inner strength. From an early age, they are taught to value 頑張る (effort) and 我慢 (endurance) to achieve their goals, knowing that hard work trumps talent.
And here we have the very heartbeat of Uniqlo.
Culture and leadership: The Uniqlo Way
Uniqlo’s ethos is deeply rooted in its strong company culture and visionary leadership. The brand’s focus on teamwork, customer experience, and continuous improvement is reflected in every aspect of its operations, from its flat organisational structure to its intensive employee training programs.
One of Uniqlo’s most striking cultural practices is its morning routine, where staff recite “The Behaviours” – a series of phrases that define customer service standards. While this level of standardisation might seem extreme, it ensures consistency across all customer touchpoints and contributes to a unified brand experience globally. It also lives out a form of the philosophy of a Japanese master business.
One of Uniqlo’s most notable characteristics is its obsessive attention to detail.
The art of retail detail
It is often the little things in retail that make the biggest difference to the customer.
One of Uniqlo’s most notable characteristics is its obsessive attention to detail. This is evident in every aspect of its operations, from the precise folding of clothes in stores to the rigorous quality control in its supply chain. Again, it goes to the doctrine of Bushido: honour and duty to the guest.
Innovation as a driving force
Japan also has a long history of manufacturing products using microorganisms. As countries around the world seek new ways of invigorating economic growth and productivity, Japan’s modern infrastructure, technological knowledge and highly educated labour force have created a hotspot for innovation.
Uniqlo’s founder, Tadashi Yanai, famously stated, “Uniqlo is not a fashion company, it’s a technology company.”
This mindset has led to groundbreaking fabric innovations like HeatTech and AIRism, which have become cornerstones of the brand’s success.
Uniqlo’s innovative spirit extends beyond product development. The company has also pioneered unique marketing approaches, such as its ‘Uniqlock’ digital campaign, which won numerous advertising awards and helped build global brand awareness.
Beyond retail: Creating social impact
Uniqlo’s commitment to social responsibility also sets it apart from many of its competitors.
From collaborations with cultural institutions like MoMA to partnerships with UNHCR to support refugees, the company demonstrates that retail can be a force for good in the world.
Uniqlo’s ‘All-Product Recycling Initiative’ is a prime example of how retailers can contribute to sustainability efforts. The program collects used Uniqlo garments and either recycles them into new products or distributes them to refugees and disaster victims. In fiscal year 2020 alone, 30.29 million items were donated to sixty-five countries and regions through this initiative.
Embracing the digital future
As the retail landscape continues to evolve, Uniqlo is making strides in digital transformation. The company’s Ariake Project aims to create a seamless link between Fast Retailing – Uniqlo’s parent company – and its partner factories, warehouses, and stores worldwide, using advanced information technology.
Uniqlo’s digital strategy extends to its customer-facing operations as well. The company aims to expand its online sales from the current 9.9 per cent of total global sales to 30 per cent by launching more online services. This focus on e-commerce and mobile shopping reflects the changing habits of consumers worldwide.
Collaborations and partnerships
Uniqlo’s commitment to enhancing lifestyles extends beyond clothing, as evidenced by its innovative partnerships with cultural institutions and artists. Its collaboration with MoMA is a standout, ensuring free access to the museum every Friday evening and creating the SPRZ UT T-shirt range, which brings art and culture to the masses.
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The brand’s UT line features graphic designs from fine art, music and other culture, collaborating with an impressive roster of artists and designers. From Jason Polan’s quirky illustrations to Keith Haring’s iconic street art, Jean-Michel Basquiat’s culturally rich works, François Morellet’s abstract compositions, Sol LeWitt’s conceptual art, Josef Albers’ colour theory, Gordon Walters’ Indigenous-inspired geometric abstractions, and Max Bill’s Bauhaus-influenced designs, Uniqlo has successfully merged fashion with art.
These partnerships not only elevate Uniqlo’s brand but also democratise art, making it accessible and wearable for everyone, further reinforcing the company’s mission to provide innovative, affordable, and culturally significant apparel.
Global expansion with local sensitivity
While Uniqlo has achieved impressive global growth, it has faced challenges in adapting to different markets. The company has learned valuable lessons about the importance of tailoring its approach to local preferences and body types.
Of course, we live in a changing context where issues like the environment, fair wages and treatment of workers, climate change and animal welfare carry great importance in the ‘social register’ of retailers.
Uniqlo now has a repair-and-reuse program in place, for example, and it offers clothing recycling to consumers to help address end-of-life textile waste. It uses a few lower-impact materials and reduces water use in some spots along its supply chain.
It also has targets to reduce emissions in its supply chain, which have been approved by the Science Based Targets Initiative (SBTi), an organisation that provides “companies with a clearly defined path to reducing emissions in line with the Paris Agreement goals”.
Currently, Uniqlo does not report its progress towards meeting these targets, which has drawn scrutiny.
Uniqlo has also attracted criticism for the fair work policies in some of its supply channel processes over the years; however, it appears to be addressing these.
The brand gets deserved accolades for banning the use of fur, angora, shearling, and karakul, and for committing to eliminating other animal products, like mohair. It also has a formal animal welfare policy aligned with Five Freedoms and uses some recycled down.
If imitation is the highest form of flattery, then Uniqlo has its admirers, with counterfeit and copycat products circulating the globe also presenting ongoing issues for the brand management.
The path forward for retail
The success of Uniqlo offers valuable insights for retail CEOs looking to thrive in an increasingly competitive global market. By focusing on a clear brand promise, prioritising innovation, fostering a strong company culture, living the values of the firm, making a positive social impact, and being open to digital transformation, retailers can position themselves for long-term success.
At time of writing, Fast Retailing had upped its full-year profit expectations after another record performance for the fashion giant. During the nine months to May 31 this year, Fast Retailing reported revenue of ¥2.37 trillion (A$25 billion), up 10.4 per cent, year on year, while operating profit was also up 21.5 per cent, at ¥401.8 billion (A$4.3 billion).
Along with 3700 shops and 30,000 employees, it is certainly a testament to the values, virtue and vision of Uniqlo.
Next steps for your brand
There are certainly a number of lessons to be learned here - and a number of key takeaways:
Achieving industry benchmarks in your sector has never been easier! Contact Brian Walker for more information today.
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First published in Inside Retail Weekly, 07 Aug 2024.
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The Data Diva | Data Privacy & Emerging Technologies Advisor | Technologist | Keynote Speaker | Helping Companies Make Data Privacy and Business Advantage | Advisor | Futurist | #1 Data Privacy Podcast Host | Polymath
1moBrian Walker, thank you. Uniqlo is an amazing business, and I have been thrilled to see it grow. I stumbled upon Uniqlo by happenstance when they had their only store in the US in Soho, New York many many many years ago. I love what they do and how they do it. Their innovation and attention to detail are amazing. The clothes are of great quality at a reasonable cost. I also love that they did not go toward trying to plaster their brand’s name on their clothing. It was a great move.
Founder at IREC | International Business Development | Supply Chain | Real Estate
1moReally great article! I agree that merging art and clothing, like MoMA T-shirts, sets a new standard for how brands can creatively connect with a more global audience. Thanks for sharing.
Director at 3D Retail Economics & Australian Lease and Property Consultants Pty Ltd seeking to expand SaaS across Globe
1moBrian interesting and noted. Many most ordinary retail firms don’t go down the path you outline. In fact they are the large majority of the market place. We analyse have analysed their metrics across our careers. One can immediately see one business that stands out from the rest. It does not mean to say that one does not give average firms the same attention to detail or does it? We invented the first AVM as a decision making product in the world 🌎. When it is adopted it will be my second international standard. My first set out to understand and define a problem; my first international standard the second to invent and build the first AVM to solve it. So much so that when adopted as AVM the International Standards have not been written up yet! So we all have our niches. Your article is pretty well written.