By Yiting Wang, Mengxin Li
If you've been shelling out for designer clothing in the hopes that it will be more durable than cheaper options, you might want to reconsider.
May 30, 2018
Uniqlo, in essence, is a tech company, competing against Apple instead of Gap, according to Tadashi Yanai, President of Fast Retailing. Just before his retirement, Uniqlo set another goal for its online business.
A new study from The University of Leeds suggests that low-cost clothing might actually outlast pricier pieces.
Tadashi Yanai, CEO of Fast Retailing Co Ltd (TYO:9983) recently said the corp will double the online sales volume of its core brand Uniqlo in the following two years, enlarging it to JPY￥ 300 b ($ 2.7 b), which will account for 20% of its total sales volume.
According to Fast Retailings financial report of year 2017, though Uniqlos online sales volume soared by 31.6%, its online revenue only reached JPY￥140 b, accounting for 7.5% of its total revenue and falling far behind its rival, Inditexs fast-fashion brand Zara, which scored an online revenue of JPY￥ 330 b.
The study was led by Dr. Mark Sumner, a lecturer in fashion and sustainability. Using samples of T-shirts and jeans from a variety of brands and price points, researchers measured factors such as seam strength, colorfastness, and how long it took for the fabric of each piece to develop rips or tears.
Tadashi Yanai revealed that reform will happen in two ways. On one hand, Uniqlo will connect global distribution channels via a brand new website. On the other hand, it will strengthen its basic product line and sell exclusive items online.
On top of that, Uniqlo also announced within this fiscal year it will speed up itsoverseas expansion with main focus on Asian market. Its worth noting that the brands revenue overseas surged by 29.2% to JPY￥ 507.4 b, overtaking its domestic market for the first time.
Despite the popular notion that designer clothes are more sturdily constructed than off-the-rack items, the study found that fast-fashion shirts and jeans usually out-performed their luxury counterparts.
In a time when global retailing is downsizing, Uniqlo bucks the trend to integrate its channels online and offline. Uniqlos former global VMD director Uchida Fumio pointed out that the brand prefers to build a model of online order and offline delivery.
Fast Retailings CFO Okazaki said the corp has established new delivery centers in China and America that will provide same-day or overnight deliveries.
"Some of the garments performed very well across a wide range of tests — more often than not, the best products were 'fast-fashion' products," Dr. Sumner told?The Telegraph.
The next step of Uniqlos digitalization is personalization through a steady transfer to AI. Now the company is testing the water by providing semi-tailored services. Ever since last September, Japanese customers were able to pick out semi-finished articles and adjust the size, color and details such as collar and cuff patterns to their liking.
Consumers can draw their unique patterns on Uniqlos App and order custom-made T-shirts on UT line, a service which will be accessible worldwide.
"Jeans from one fashion brand lasted twice as long as a designer label jeans, but cost one-tenth of the price of the designer jeans," he said.
Analysts believe custom service extends the diversity of products at a minimum cost. Uniqlo specializes in basic models and invests heavily in functional features, rendering its products less fashionable than counterparts of other fast-fashion brands. But with consumers own design, its products become more fun and personal.
But for Uniqlo, its more essential to hold on to customers physiological data for personalized recommendation and CMR (customer-managed relationship). The service now is available on its App for customers to access on their smart phones.
According to Dr. Sumner's interview with?The Telegraph, designer label T-shirts were "the worst performing" in all of the tests. Surprisingly, T-shirts from an online fast-fashion brand held up the best.
Through Uniqlo App, t-shirts of UT collection can be customized with prints individually online, which is gradually promoted globally.
According to Uchida Fumio, the brainpower of the application is UNIQLO IQ, an AI tool that visualizes the whole supply chain. As soon as an order is placed, the information will go to the headquarter, meaning customers get to track their purchase from production to delivery on their cell phones.
Of course, price isn't the only thing to consider when shopping for new threads. The fashion industry is a huge source of environmental pollution, with low-cost clothing contributing heavily to landfill waste and carbon gas emissions.
As a matter of fact, the heavy investment in digitalization accords with Uniqlos long-prized value of functionality. On The Art and Science of LifeWearexposition last year, Mr. Yanai emphasized the importance of functionality overfed. As he put it, fashion trends will transform overtime, but Uniqlo will weather any conditions with its unparalleled functionality and comfort.
Provoking panic purchasing right after releasing, the promotion of UNIQLO U collection of spring summer 2018 is combined with some try-on directions by some bloggers from Youtube etc.
According to the EPA Office of Solid Waste, Americans throw away more than 68 pounds of clothing and textiles per person per year. With trends appearing and vanishing in the blink of an eye, the average number of times a garment is worn before it is disposed of has decreased 36% over the past 15 years, according to a 2017 report.
But the collaborative collections it has launched in recent years seem to be contradicting that claim. Lately, its been involving itself with luxury brands, too. The beach-inspired leisure collection, co-designed by Bottega Venetas creative director Tomas Maier, is now available online and in select stores. On top of that, Uniqlo also brings out regular collections of UNIQLO U with its long-standing partner, former Hermes creative director Christophe Lemaire.
However, sporadic collaborations will not guarantee a fashion upgrade for the brand.
Although some clothing items are estimated to be trashed after just seven wears, less than 1% of clothing is recycled to create new clothing. Plus, fast-fashion can come with ethical concerns depending on the company.
Just take a look at HM, the fast-fashion brand that initiated the joint-design model. The latest Erdem X HM collection boasted haute couture at a fast-fashion price, but wes faced with cold shoulders in Chinese market for lack of recognition. Taking note of this uncertainty, Yanai reiterated when he announced his own retirement that the person in charge should always be young, so that its products will play well with youngsters. His successor should also be experienced in digitalization and able to make timely decisions based on market changes.
Jolted by consumption upgrade and new business models, traditional fast-fashion brand is now standing on the crossroads of reform. On account of depreciated yen, Fast Retailings raw material and labor costs rose sharply during 2014 to 2015, prompting Uniqlo to raise its price of Autumn/Winter collection by 5% in July, 2014 and then 10% overall in 2015.
But it's not just fast-fashion brands that are guilty of wasteful practices. Earlier this year, high-end design label Burberry acknowledged burning almost $40 million of unsold clothes, accessories, and perfume. According to the BBC, the company opted to destroy the items rather than sell them more cheaply in order to protect the brand's value.
The two price hikes eventually led to a 6.3% drop in Uniqlos customer count as well as a 22.6% nosedive in profit during the first half-year. Yanai was forced to admit the act was a strategic mistake and cut prices globally by up to 30%.
The failure of price-raising strategy might have been a major turning point for Uniqlo.
www.0805.com，All in all, there's a lot to consider when purchasing new clothing. But, keeping those bargain jeans in your wardrobe rotation could be good for your budget and the environment — and chances are they can last just as long as the designer pair you've been eyeing.
Japanese retail expert Chen Liping pointed out that every retail giant starts off as a price killer. Industry insiders believe compared with integrated retailers, brands such as Uniqlo that focus on segmented areas have their advantage in quality. And in its own niche, Uniqlo edges out the front-runner with its competitive price.
In their heyday, those retail tycoons focusing on segmented markets perfectly balance low price with good quality, but when price killers show up, the balance will be thrown off.
Ultra-fast fashion brands such as Boohoo and ASOS still keep in step with fast fashions business model, however, their emergence transformed consumers perception of high quality at low price, meaning consumers realize they can enjoy the same or similar products at lower prices.
Furthermore, popularized internet gives a voice to every individual, therefore independent designer brands can get great publicity at a low cost. Besides that, fast-fashion brand Zaras Weibo (a major social media in China) are flooded by complaints about refunds and new arrivals.
A great number of consumers complain about the quality and return of their purchases under Zaras Weibo posts.
As customers become more fastidious, fast fashions intrinsic advantages might be overturned. For Uniqlo known for its functionality, fitful embracement of fashion will delight customers and boost purchase. But the most critical strategy is to exert core competitiveness of its products.
When publishing results of last year, Fast Retailing said its earnings went up because the unusually cold weather fueled the sales of winter items such as HEATTECH, down jacket, fleece and leggings.
Yanai once said Uniqlo per se is a tech firm, which competes with Apple instead of Gap. After it collaborated with high-tech company Toray and launched heating fabric HEATTECH in 2015, industry insiders predicted those two might co-design fabric that generates heat with solar power, collects physiological information and changes hue under light.
Toray said the invention is possible tech-wise, but it remains confidential whether the tech will be put into production. It means customers may well be able to buy high-tech clothing at fast-fashion prices. Uniqlo is renovating customers perception of good quality.
This may sound the alarm for fast fashion industry which is busy with promoting new brands, shutting down stores or laying off employees. After all, only products with good quality and low prices will always be in customers good graces. And Uniqlo, the killer in fast fashion, will further threaten Zaras footing.