Uniqlo targets Zara in faster fashion move
From fast fashion to faster fashion: speed is seen as the key by Uniqlo owner Fast Retailing in its bid to outrace apparel powerhouse Zara.
Uniqlo founder Tadashi Yanai says Fast Retailing plans to shorten the time it takes from design to delivery to about 13 days, roughly the same as Zara, owned by clothes retailer Inditex.
He says the company’s new design and delivery centre in Tokyo will also help Uniqlo expand direct-to-consumer, custom-clothing sales and improve the efficiency of its same-day delivery in the city.
“We need to be fast,” he says. “We need to deliver products customers want quickly.”
Japan’s biggest clothing retailer aims to increase total revenue by nearly 70 per cent to ¥3 trillion (US$26 billion) in the fiscal year ending August 2021. While that may still not be enough to overtake Inditex, which reported sales of $25 billion last year, Yanai says Fast Retailing’s focus on clothes that meet consumers’ daily needs will help propel its growth.
“Zara sells fashion rather than catering to customers’ needs,” he says. “We will sell products that are rooted in people’s day-to-day lives, and we do so based on what we hear from customers.”
Overseas markets, notably in Asia, will grow to contribute about two-thirds of Fast Retailing’s revenue in the next four years, up from about half currently. Uniqlo will open 100 stores in China and another 100 in Southeast Asia annually, says Yanai.
Concentration for speed
The company’s new complex, in the Ariake district along Tokyo’s waterfront, houses more than 1000 employees, including designers and marketing teams, and also has a warehouse and delivery department. Yanai says that concentrating resources into one location will help speed processes.
“The ability to provide anybody, anywhere, anytime with the ultimate, high-quality day-to-day clothing will set us apart,” he says. “We want to deliver products that customers want quickly. That’s why it’s Fast Retailing.”
After revenue growth of more than 20 per cent for three straight years, Uniqlo sales took a hit in the latest fiscal year. The growth rate slowed to 6 per cent after the brand raised prices because of higher raw-material costs.
Following the slowdown, the company did a U-turn on its pricing strategy, saying it was committed to delivering the lowest price possible. However, it had to roll back its 2021 revenue target to ¥3 trillion from ¥5 trillion.