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Based on the video and the document, reply the following question
For 3a, 3b, 3c & 3d you do not need to write more than 1000 words in total. A combination of a diagram with bullet points will suffice.
Note: Please do not use chatgpt or copy internet sources.
a. What is Uniqlo’s strategy? As an initial analysis, focus Uniqlo’s analysis on the home-market (Japan)
b. What are the strengths and weaknesses of Uniqlo’s model?
c. What is TGC’s strategy?
Hint: TGC is a different player from the ordinary players in the fashion market such as Zara and Uniqlo.
d. What are the strengths and weaknesses of TGC’s model?
e. Sketch out Uniqlo’s and TGC’s activity map (you may use PPT or paste a photograph of a hand-written sketch)
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APRIL 2019 ISSUE
Why Urban Millennials Love Uniqlo Will the rest of America learn to love it too?
G ILLIAN B. W HITE
U NIQLO WAS FOUNDED in 1984 in Hiroshima, Japan, as the Unique Clothing
Warehouse—an ironic name for a manufacturer known for clothing that is in no way
unique. A person can dress sock-to-cardigan in the company’s wares without
announcing herself as a devotee of the brand. In an industry as label-oriented as fashion,
such anonymity would seem to be a detriment to success. Today, however, Uniqlo has
more than 2,000 stores in 15 countries. Its owner, Tadashi Yanai, is the richest person in
Japan. Its parent company, Fast Retailing, is among the five largest clothing retailers in
the world.
Only a small percentage of Uniqlo’s stores are located in the United States. But for a
certain segment of American shoppers—young, urban, professional, practical—Uniqlo
basics have become a cornerstone of the contemporary wardrobe. In America’s coastal
cities, Uniqlo’s stores—on Newbury Street in Boston, in SoHo in New York, in San
Francisco’s Union Square—are forever clotted with customers.
Part of the reason is cost: Because of its low prices—jeans retail for $40, a hoodie for
$30, one of the brand’s signature down jackets for $70—Uniqlo is often compared to
other big brands in the fast-fashion category, such as Zara and H&M. But the term fits
those companies more snugly. Zara endeavors to reproduce the latest couture trends for
the masses: Balenciaga recently made a platform sneaker that cost $795; a decent
approximation of it can be found at Zara for $34.99. H&M is a one-stop shop for hypertrendy items—velvet pants, a beaded sweater, a sequined halter dress—at prices that
make them easily replaceable when they inevitably become passé.
Uniqlo isn’t in the business of chasing trends. Its staples—versatile black pants, reliable
oxfords, crisp cotton socks—are available month after month, year after year. A more
apt analogue would be the Gap. In its 1990s heyday, the Gap revolutionized American
retailing by making basics cool. But the company eventually became a victim of its own
success. “When [the Gap] tried to go from having a certain cachet to being in every
single mall in every single town in America, the brand lost its edge,” Steve Rowen, a
managing partner at Retail Systems Research, told me. Gap clothing became the
uniform of suburban moms and dads. Despite the company’s efforts to make its khakis
less baggy and its shirts slimmer, no one wants to fall into the Gap anymore—especially
when you can get cheaper basics with cleaner lines at Uniqlo.
The question Uniqlo faces now is whether it can inherit the Gap’s empire without
repeating its mistakes. To do so, it will have to convince shoppers across the country of
a proposition that’s radical for the industry: Fashion can be affordable without being
disposable.
UNIQLO HAS PROFITED from changes in American society, some of which might seem
at first glance to be unrelated to fashion. Millennial shoppers entered a job market with
fewer jobs, while carrying more student debt, which limited how much money many of
them could spend on clothes. (They also entered a workforce that was more amenable
than ever to casual attire; where a suit was once called for, chinos and a button-down—
or jeans and a hoodie—now suffice.) That austerity contributed to a cultural shift, in
which conspicuously expensive clothing fell out of favor. “We went through a period
where the logo was dying and nobody wanted to wear a big logo and advertise for the
brand,” Jan Rogers Kniffen, a retail consultant, told me. “That’s the Uniqlo customer.”
These shifting mores created an opening in the American market, one that a company as
rooted in Japan’s aesthetic history as Uniqlo could ably fill. “Clothing in the West, it’s
associated with status, with rank,” Hirotaka Takeuchi, a professor at Harvard Business
School who has studied the brand, told me. In Japan, clothing has traditionally been
more standardized. Until the end of the 19th century, when Western influence became
more prevalent, kimonos were commonly worn by Japanese people of varying ages and
classes. The garment would differ depending on the wearer’s ability to afford fine fabric
or embroidery, but compared with the West, where the wealthy telegraphed their status
with elaborate styles of dress, such signaling was far more subtle. Takeuchi sees Uniqlo
as bringing this old Japanese view of fashion to the U.S. market.
This isn’t to say that people who shop at Uniqlo don’t care about how they look. The
company realized that its customers might not want to pay top dollar for pants, but they
do want them to fit. A pair of Uniqlo slacks is never going to look like a $200 pair from
a high-end competitor. But because Uniqlo offers free tailoring, the pants are probably
not going to look like you got them for $40, either. The company may be sensitive to
customers’ finances, but it’s alive to their aspirations as well. It offers blouses in silk
and sweaters in cashmere. In recent years, Alexander Wang, Jun Takahashi, Tomas
Maier, and Jil Sander have all partnered with the company on limited-edition designs,
clearly hoping to meet their next generation of devotees where it shops now. For
Uniqlo, the collaborations provide a frisson of high fashion, a suggestion that the
leading lights of couture appreciate its cheap socks and T-shirts too.
Quality isn’t an attribute typically associated with fast fashion, but Uniqlo has also
managed to build a reputation for durability. Takeuchi told me the brand that reminds
him most of the relative newcomer—Uniqlo opened its first U.S. stores in 2005—is an
old American one: L.L.Bean. The association might seem odd, given the venerable
Maine retailer’s tradition of outfitting its customers in boxy flannels and duck boots.
But in terms of philosophy, if not aesthetic, Takeuchi thinks the comparison is apt. The
proposition L.L.Bean has always made to its customers is that they are investing in
items that will be with them for a lifetime. Uniqlo can’t promise anything approaching
that longevity, but in an era of disposable fashion, a Uniqlo garment, made from hearty
materials and cut in a timeless style, can feel like an investment piece. “In a sense, it’s
L.L.Bean in modern times,” Takeuchi said.
Like a mountain outfitter, Uniqlo touts the use of a number of signature technologies in
its clothing. Puffer coats are insulated with “ultra-light down,” a down fill that
purportedly makes jackets less bulky and easier to pack, without sacrificing warmth.
HEATTECH, marketed as an innovative insulating system, and AIRism, which is
promoted as moisture-wicking, are woven into a variety of Uniqlo staples—socks,
underwear, camisoles, leggings, pants—supposedly making them more comfortable and
resilient than competitors’ products. Not built for decades of wear on the rocky coast of
Maine, perhaps, but more than up to the challenge of a few seasons of service in the
cubicle.
IN ASIA , UNIQLO is everywhere. More than 800 of the brand’s stores are in Japan—
where Uniqlo, by its own estimates, accounts for about 6.5 percent of the total apparel
market. Much of the brand’s international growth in recent years has come from other
countries in the region, including mainland China, Hong Kong, Taiwan, and South
Korea.
To achieve the kind of dominance in the U.S. that the company enjoys closer to home,
Uniqlo will need to grow significantly. A few years ago, Yanai aimed to generate $10
billion in sales from 200 stores in the U.S. by 2020; the company currently operates its
50 or so U.S. stores at a loss. “Compared to H&M or Zara, they have been struggling a
little bit in the U.S. market,” says Won-Yong Oh, a professor at the University of
Nevada who studies retail companies. “They have less brand awareness.” Many
Americans have never heard of Uniqlo, or don’t know how to pronounce it. (It’s younee-klo.)
That could be an opportunity to make a good first impression. But as Uniqlo learned
when it arrived on American shores, first impressions can be hard to manage. The three
original U.S. stores were in New Jersey malls, where the company soon encountered
several hurdles, including fit. (American customers, on average, are taller and fleshier
than Japanese shoppers.) It closed the stores within a year.
Uniqlo has continued to struggle in suburban markets. Rowen, of Retail Systems
Research, said he thinks the company should hew closely to cities, where it has found
its greatest success, because that’s where its core customers are. This would also help it
avoid the fate of the Gap, which traded its sense of self for growth.
The Gap isn’t the only Uniqlo competitor that has faced challenges in recent years.
J.Crew has seen sliding sales as customers complain about strange aesthetic choices and
high prices for middling quality; Old Navy (which is owned by the same parent
company as the Gap) has strong sales, but its clothes are dogged by a reputation for
frumpiness and flimsiness. Uniqlo doesn’t have upwardly mobile city dwellers entirely
to itself, however. Madewell and Everlane both offer a relaxed yet refined look, though
at a slightly higher price point. For those with a bit more to spend, Fast Retailing’s own
luxury brand, Theory, offers simple, well-cut items that call less attention to themselves
than do clothes from similarly situated brands.
Given Fast Retailing’s size and international strength, it can afford to not rush things
with Uniqlo. “They can do whatever they want,” Kniffen said. “They’re a big, healthy
company.” Despite the underwhelming performance of Uniqlo’s American stores thus
far, the company’s operating income outside of Japan grew by more than 62 percent
year-over-year in 2018, while revenue grew slightly more than 25 percent. From its
urban outposts, Uniqlo can slowly upend American ideas about the interplay between
quality, style, and status—one basic button-down at a time.
GILLIAN B. WHITE is a deputy editor of The Atlantic.
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