If you mentioned the brand Uniqlo to someone outside Japan 10 years ago, you would have received a blank stare. In the present day, when you mention Uniqlo to any global citizen, three things quickly spring to mind: quality, affordability, and fashion.
That is the level of success that Uniqlo has achieved recently. It is now another competitor in the global retail fast fashion industry. Uniqlo has expanded incredibly despite facing competition from larger companies like H&M, Forever21, ZARA (Inditex), and Gap. In this very competitive fast fashion retail business, how did it gain traction so quickly?
The organizational culture of Uniqlo and its unwavering dedication to innovation are two important components of the brand’s success. The famous remark “Without a soul, a company is nothing” is attributed to its founder, Tadashi Yanai, a Japanese national.
Each Uniqlo employee has been indoctrinated with Tadashi Yanai’s 23 Management Principles, which represent this soul. The essence of these principles includes putting customers first, giving back to the community, and being self-disruptive—all essential for success.
Uniqlo’s strategic vision: Challenging fashion giants with innovation and customer-centricity
As per the global management magazine Forbes, Uniqlo ranks 84th on the list of the World’s Most Valuable Brands and has a brand worth US$ 9.2 billion. The innovative approach of its creator and incredibly customer-focused culture is largely attributed to this.
Uniqlo’s goal is to become the biggest mass apparel retailer globally, primarily through growth in the US, China, and online. It is gradually gaining market share from the world’s largest apparel retailer, H&M, whose 2019 sales were US$ 24.3 billion. If Uniqlo succeeds in reaching this lofty goal, it will overthrow Inditex, the parent company of Zara, as the industry leader in clothing worldwide.
The Uniqlo brand strategy
The brand’s tagline “Uniqlo is a modern Japanese company that inspires the world to dress casually” perfectly captures the company’s mission. So far, Uniqlo’s corporate approach of “totally ignoring fashion” has proven effective; unlike its competitors, it does not follow the latest fast-fashion trends. The apparel line’s “Made for All” ideology is to transcend demographic categories such as age, gender, race, and others.
Despite the name “Uniqlo”, the clothing line’s items are basic, necessary, and versatile, allowing customers to mix them in with their own unique looks.
Because of its innovative design and in-house fabric, this design-driven apparel company provides exceptional functional performance. Through trademark breakthroughs with titles like HeatTech, LifeWear, and AIRism, the corporation sets itself apart from its price-driven competitors.
Among the crucial elements contributing to Uniqlo’s brand success are the following:
Delivery system supporting a clear brand promise
With in-house capabilities for product design, manufacturing, and distribution, the company can stay close to consumer needs based on what customers are purchasing in-store, which saves money on overproduction and needless overheads.
A few weeks can be used to update stock, and a few days to restock it. Uniqlo can fulfil its brand promise by concentrating on a small selection of core products and consolidating its fabric purchases into large orders. This gives Uniqlo more negotiating leverage with suppliers and lower prices for its customers.
Product development approach and efficient supply chain
One of Tadashi Yanai’s favourite quotes is “Uniqlo is a technology company, not a fashion company.” In fact, the brand’s method of producing clothing is more in line with the technology industry’s iterative approach to product development than it is with the fast fashion retail sector’s cyclical, trend-driven rhythm.
Leading rival Zara has made a name for itself in the apparel industry by quickly adapting to rapidly shifting fashion trends; items are shipped from the factory to stores in about two weeks. In contrast, Uniqlo plans the production of its wardrobe essentials up to a year in advance.
In contrast to its rivals, who provide a wide range of fashionable clothing influenced by international runway trends, Uniqlo concentrates on creating a select number of urban-practical styles.
Company culture and visionary leadership
Tadashi Yanai was placed number 54 on the Harvard Business Review’s list of the world’s top-performing CEOs in 2019.
Uniqlo’s flat organizational structure, which strongly encourages staff recommendations, demonstrates the company’s emphasis on teamwork. The company’s objectives and ideals are directly reflected in the procedures and policies that its global workforce adheres to.
The company’s daily charted and reported financials are available to both sales and employees in full transparency. Additionally, the brand micromanages each consumer interaction point and places a great deal of attention on the in-store experience.
The company places a high premium on staff training, and every new hire receives an incredible three months of training—far longer than the average for the global industry. Every action that its staff members take is documented and examined, including how they fold clothing and how retail personnel give consumers their credit cards back while maintaining eye contact.
Additionally, employees are taught to greet customers with six common words, such as “Did you find everything you were looking for?” and “Welcome to Uniqlo!”
High dedication to innovation
There are just two things that a corporation does: innovate and market. Given their reputation for creating innovative fabrics, Uniqlo is well aware of this. To continuously create new high-tech textiles for Uniqlo, the company also employs “Takumi” or Japanese textile masters, who collaborate closely with factories in China and Japan.
Developed in collaboration with Toray Industries, a Japanese chemical business, Uniqlo is known for its hallmark inventions, including HeatTech fabric, which converts moisture into heat and features air pockets to preserve heat. The brand’s ability to produce fashionable designs that deviate greatly from the typical traditional warmth clothing segment has been made possible by the thin and comfortable HeatTech fabric.
In addition to HeatTech, Uniqlo has developed innovations such as UV Cut (a material that blocks 90% of UV rays from reaching the wearer), LifeWear (a combination of casual and sportswear), and AIRism (a soft fabric with quick-drying inner fabric).
The fact that these new textiles are all branded and protected by copyright makes it difficult for rivals to try and emulate this point of differentiation.
According to Tadashi Yanai, Apple is the company’s biggest rival because of its ambition to become the most innovative company in the world.
Uniqlo’s pathway to becoming a major global Asian brand is extensive.
One of the keys to Uniqlo’s success is its relentless dedication to innovation and robust delivery system, which reinforces a distinct brand promise. The brand has established an atmosphere where it consistently surpasses customers’ expectations by clearly outlining its brand promise to provide premium, performance-enhanced, universal, basic casual wear at reasonable costs and by managing a strong and effective supply chain to make its products.
One of the hardest parts of creating a powerful brand in the modern era is maintaining and growing a brand that is relevant and connects with the target audience. With its presence in a variety of markets, Uniqlo has proven to be a resilient brand that can adapt to changing market conditions.
With its remarkable corporate culture, fearless and daring leadership, and steady financial development over the previous 15 years, Uniqlo is undoubtedly headed for worldwide success.
(Tashia Bernardus)