Sustainable Business Model
The Future of Uniqlo Retail Innovation

Background

Fast Retailing (Uniqlo’s mother company) is the world 4th largest apparel group.
Within its 33 years of company history, Uniqlo has successfully transformed from “affordable fast fashion” to “the best choice for basic daily ware”.
Meanwhile, it has continued its collaboration with top designers from Christophe Lemaire, and street artists such as Timothy Goodman, and well-claimed art association such as MOMA in NYC.

Brief

To innovate the business model of Uniqlo in order to help Uniqlo achieve its goal of No.1 private label apparel retailer in 2020.

Challenges 

  • Though achieving great success in Asia, Uniqlo has suffered a bumpy sales in US market where Japanese minimalism and lean styles fail to adapt the US markets’ bigger sizes and layback lifestyle as GAP and Old Navy does. However, the success of the US market is key to achieve the goal in 2020, giving China and Japan market have reached near saturated and look for other innovations.

  • Uniqlo failed to establish a strong brand image which focuses on OFF TREND basics and EXTRA FUNCTIONS in US market because most consumers still regard it as another fast-fashion brand and feel disappointed when failing to seek for different styles as Zara and H&M.

  • There is a gap between its projected retail expanding speed (more than 1000 stores worldwide now) and lagging human resources capacity and increasing human resources investment. Uniqlo is well known for its Japanese standard service quality and tidy store environment. In order to sustain that, Uniqlo has suffered a higher HR cost outside Japan market than its competitors while remaining as high a turn over rate as anyone’s in retail.

  • 80% of Uniqlo’s production is in China, and with the booming labor cost in China market and lack of replacements in the cheaper market yet, it is a huge challenge to remain its low price high-quality price positioning.

Core insights

  • Shifting consumer needs towards gender-neutral basics and daily functions play a good advantage for Uniqlo's design philosophy of prolonged basic designs and ensure its consumers less fuss in maintaining a piece of clothes.

  • Economic conditions for millennials in the US has not been as good as their parent generation, Uniqlo’s price range plays a huge advantage to attract those consumers.

  • Its strategy that crossover with designers and artists adding a layer of chic and artsy into its cloth portfolio has proved working and successfully alleviated the “dullness” in the brand image, however, its strong advantage and major revenue resources still remain in those basic daily and functional wears. 

Idea Proposition

Integrated Brand Campaign: Discover the beauty of simplicity via the Lens of Wonders

Strategy

  • Strengthened the concept that basics as not just a design and aesthetic philosophy but a lifestyle one that matches Uniqlo’s on-going brand strategy: Lifewear.

  • Established a set of geometric symbols to represent style and functions, and apply that into global attractions to promote Uniqlo as the symbol of city lifestyle, targeted to create a landmark of tourist attractions. Basic doesn’t just mean cheap or lean, it is also artsy, timeless, sustainable, and universal.

  • Created Uniqlo CUBE (CUBIQLO) as our swing for the fences idea to integrate marketing storytelling with retail experiences without investing too much and work as a pilot prototype project to test the market and its feasibility.

Output

CUBIQLO is an idea to incorporate future retail experiences into Uniqlo’s daily shopping practice.

Not only it completely utilizes Uniqlo’s iconic garment strategy: basic patterns, multiple colors, a full spectrum of sizes and function specialty in different weather condition. 
It can also record and track consumers’ data that helped consumers to save their in-store shopping time, providing better experiences by embedded automatic checking out and delivery options.

It can replace staff’s input of folding and organizing clothes layout by offering consultancy and assisting customer experiences of Uniqlo Lifestyle.
The digitalized interaction can not just track data but also provide consultancy for further purchase.
Cubiqlo will be on a tour to every city where Uniqlo has and will have a major flagship store to convey the brand message and deliver the retail experience of future.

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“I have to say sorry to some of the A potential teams that I have to go for A- because “this team has set bar very high.”  -  Roxanna Zarnegar  (Professor of Sustainable Business Model Innovation)

Link to the complete work

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