CASE STUDY Uniqlo - Contagious Magazine

case study / uniqlo /
It could be a pair of pants. Perhaps it's a cashmere
sweater, or maybe even a T-shirt sporting a mean n' moody
Manga-inspired design. Whatever it is, chances are that
you own at least one item of UNIQLO clothing. If not, it's
only a matter of time until you do.
Officially Japan's leading clothing retail chain, UNIQLO
currently has 804 stores worldwide, the sales from which
have encouraged parent company Fast Retailing Co. Ltd
to reveal optimistic forecasts for the fiscal year of 2008
of ¥585bn (€3.5bn) in net sales. Indeed, in June, Fast
Retailing reported a five-year record high share price of
¥9860 (€59). With this in mind, the chances of this
financial target for 2008 being met, are almost as likely
as that pair of pantone-perfect socks winding its way
into your top drawer by the end of the year…
However, like all the best success stories, the UNIQLO
saga is not without its share of adversity. Initial attempts
to replicate UNIQLO's quintessentially Japanese business
model in the western retail environment did not go exactly
to plan and after failed expansion in 2001, the brand
was forced to retreat and regroup. It would seem that a
different methodology would need to be adopted if what
started out as a single unisex clothing store in Hiroshima
was to be successfully rolled out on a global scale.
From tiny warehouses
The UNIQLO brand philosophy has always been about
creating a distinctly utilitarian retail experience for
consumers. Normal concerns held by the average
shopper about style, quality and brand are dissolved by
a simple assurance that whatever they buy, it will be
great quality, low in cost and will look good with
anything and everything they decide to wear it. What
UNIQLO does therefore, is to provide the basic but
premium ingredients of your wardrobe.
The 'Unique Clothing Warehouse' was opened in 1984
by the Yamaguchi-based Ogori Shoji, which, since 1949,
had operated a chain of clothing stores called 'Men's
Shop OS'. However, the simple difference of stocking
unisex clothing was enough to ensure that the success
of the new store far eclipsed that of the existing outlets.
Ogori Shoji was changed to the somewhat catchier
'Fast Retailing' and in turn, its rapidly expanding new
chain became UNIQLO. By April 1994, over 100 stores
had been opened across Japan and to meet this new
demand, in 1997 UNIQLO adapted the SPA (Specialty
Store of Private Label Apparel) model which had proved
so successful for US retail giant Gap; instead of selling
proprietary clothing, UNIQLO would now exclusively
produce and carry its own garments. The out-sourcing
of the manufacturing process to more affordable
factories in China enabled the brand to capitalise on this
business model, providing great value clothing that was
snapped up by the Japanese public in the clutches of a
recession.
In 2001, the first overseas UNIQLO outlets were opened
in Shanghai and shortly after, four more in London.
However, poor execution of this expansion meant that
the brand was met with indifference by the UK public.
Simon Coble, UNIQLO UK, CEO, elaborates: 'We opened
without a flagship store and expanded our network with
a scattergun approach very quickly, before we stabilised
operations. Opening stores in Romford and Knightsbridge
wasn't, in hindsight, the best approach as the brand wasn't
solidified and we failed to support our outer London stores
with the marketing that they required.' Marino Donati,
news editor for fashion publication Drapers, adds: 'In the
UK, you've really got to shout about your identity in order
to be heard. On the one hand, retailers such as Zara and
Topshop were practising fast fashion with a quick
turnover of lines, whilst on the other, retailers like Primark
and Tesco had the budget end of the market cornered.
Occupying a space somewhere in the middle, UNIQLO
was something of a lost sheep.'
However, what doesn't kill a brand only makes it stronger,
and over the following three years concerted efforts were
made to revive and repair the struggling business. In
Japan, the solution was born out of a realisation that the
standalone SPA business model referred only to
production and sales. Accordingly, UNIQLO embarked
upon a far more collaborative approach to its branding
and advertising; rather than enlisting any one agency,
key figures from different creative disciplines were
recruited to collaborate on, and rejuvenate every aspect
of the brand. Kashiwa Sato – executive creative director,
Samurai, Tokyo, oversaw the process as well as taking
care of graphic work such as the redesigned logo which
would be used on store facades, marketing materials and
the products themselves. Markus Kiersztan – creative
director, MP Creative, NY handled in-store visuals and
communication strategies, whilst digital supremo Yugo
Nakamura of tha* ltd. Tokyo used his quirky Flash genius
to revamp UNIQLO's online presence and enhance the
digital element of the ensuing campaigns.
In keeping with this new approach, changes were
being subtlety implemented and experimented within
the remaining UK stores – Simon Coble expands: 'We
realised that we had a loyal following in the UK and there
was a definite bubbling interest in the right demographics
– so we had to be careful to keep the niche element and
attraction to the brand that appealed to this audience,
whilst at the same time retaining our "bread and butter"