In 1972, Tadashi Yanai inherited his father's chain of 22 men's tailoring stores, Ogori Shoji in Ube,

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In 1972, Tadashi Yanai inherited his father's chain of 22 men's tailoring stores, Ogori Shoji in Ube, Yamaguchi. Shortly after becoming company president in 1984, he opened a new store in Hiroshima - Unique Clothing Warehouse, which was later shortened to Uniqlo. Inspired by his travels to Europe and the US, where he discovered large casual apparel chains like Benetton and Gap, Tadashi Yanai saw immense potential for Japan's casual wear market and set goals to evolve the family's business strategy from suiting to casual clothing, buying fashion goods in bulk at low cost. Tadashi Yanai also discovered that many foreign fashion chains were vertically integrated, taking control of the entire business process from design to production to retail. By 1998, he had successfully opened more than 300 Uniqlo stores across Japan. However, one of the main challenges faced was consumer perception of the brand - it was perceived to be a discount retailer selling cheap and low-quality apparel to the suburbs. This perception completely changed when the brand launched the Global Quality Declaration in 2004, a pledge to stop making low-priced, low-quality garments. Since then, people started noticing Uniqlo for its high-quality fleece jackets. The brand perception instantly shifted from being cheap and low-quality, to being affordable but high-quality.

Today, Uniqlo is a wholly-owned subsidiary of Fast Retailing Company Limited and it is known for providing high-quality private-label casual-wear at low prices. As of September 2019, the brand has grown to more than 2,250 stores in 25 countries across Asia, Europe and US in just a matter of 22 years. It is the biggest apparel chain in Asia with over 800 retail stores in Japan alone. Uniqlo aims to be the world's largest mass clothing retailer, based largely on expansion in US, China and online. The brand philosophy "Made for All" positions its clothing to transcend age, gender, ethnicity and all other ways to define people. The company distinguishes itself from its price driven competitors like H & M's and Zara by branding its signature innovations with names like HeatTech, LifeWear and AIRism. The company also hires Japanese textile masters called "Takumi", who work closely with factories in China and Japan to continually develop new high-tech fabrics for Uniqlo. Uniqlo provides very good physical shopping experience by impeccably managing its stores, inculcating a positive employee culture and through in-store technology like video tutorials that describe product attributes.

Compared with other fast fashion competitors whose stores are jam-packed with clothes, lack order and do not have a specific focus on customer service, Uniqlo's in-store experience stands out and contributes heavily to effective communication of its brand philosophy. One of Uniqlo's signature innovations is HeatTech, a fabric developed in conjunction with Toray Industries (a Japanese chemical company) that turns moisture into heat and has air pockets in the fabric to retain that heat. Besides HeatTech, Uniqlo has also created AIRism (a soft fabric with quick-drying inner fabric), LifeWear (a blend between casual and sportswear) and UV Cut (material designed to prevent 90% of ultraviolet rays from reaching the wearer) technologies. These new fabrics are all branded and copyrighted, which poses a struggle for competitors who want to try and attempt to match this point of differentiation. The company's product planning, design, manufacturing and distribution capabilities are all in-house, which means that it is able to stay close to customer needs based on what customers are buying in their stores, allowing them to save costs on overproduction or unnecessary overheads. Stocks can be upgraded within a matter of weeks or replenished within a matter of days. By focusing on core products in a limited range of fabrics, Uniqlo is able to consolidate its fabric buys into huge orders that give it greater negotiation power against suppliers which translates into cheaper prices for its customers - serving its brand promise well.

Tadashi Yanai is fond of saying that "Uniqlo is not a fashion company, it's a technology company." And indeed, the brand's approach to making apparel has more in common with the approach to product development embraced by the technology industry than the cyclical, trend-driven rhythm of the fast fashion retail industry. Unlike its competitors who sell a large variety of trendy fashion inspired by the global runway, Uniqlo focuses on producing a few styles of urban practical basics. The company also runs a highly robust supply chain. Through development of a detailed marketing strategy by the marketing department for each season, merchandisers are able to adjust production by style to align with demand well in advance. Concept meetings with all key product creation teams are held about a year before a product is launched. The Uniqlo global production centers are located in Shanghai, Ho Chi Minh City, Dhaka, Jakarta and Istanbul. Uniqlo's focus on teamwork is demonstrated through its flat organizational structure with employees greatly encouraged to provide suggestions. The values and goals of the company are translated directly into processes and measures exhibited strongly by employees all over the world.

Company financials are completely transparent to employees and sales and charted and posted daily. The brand also places a huge emphasis on its retail store experience and micromanages every customer touch point. Staff training is a huge priority for the company as each new employee is trained for a remarkable 3 months - way above global industry average. In 2000, the company built a Uniqlo University in Tokyo in which 1,500 new store managers are trained every year. Uniqlo has traditionally relied on marketing flyers and TV commercials as its primary means of advertising. Today, it uses a variety of methods to communicate its brand position and ideals, including its unique in-store environment, celebrity brand ambassadors (called Uniqlo Global Ambassadors), digital marketing, collaborations with designers and brand campaigns. Uniqlo also needs to adopt and leverage on social media and digital platforms in its advertising and communication strategies going forward. Uniqlo first ventured into e-commerce by launching its online store in the US in 2012. Since then, it has launched its online stores across Southeast Asia. Uniqlo understands that it needs to integrate its physical stores and virtual stores, and construct a true omni-channel experience. Online sales currently account for 9.9% of Uniqlo's total global sales and the brand aims to expand this to 30% by launching more online services. Fast Retailing has announced that it is making progress on its Ariake Project, which aims to transform the apparel retail industry into a new digital consumer retail industry. It is building a supply chain that uses advanced information technology to create seamless links between Fast Retailing and its partner factories, warehouses, and stores worldwide. While this is a commendable digital supply chain effort and reflects how the company has comprehensively thought about how to leverage digital internally, it is also important to remember the customer focus. Today, people of all ages use the Internet and this is transforming the way consumers shop. Different forms of market analysis strongly point towards a scenario wherein spending on mobile commerce will overtake e-commerce in the next 3 years. Uniqlo has proved to be at the forefront of the technology trend as it launched its first mobile app in 2014 in Singapore, its regional Asia commercial hub. With a clean, informative and userfriendly interface, the brand has done a good job. in allowing consumers the convenience of buying their products on the go. When a brand starts to gain popularity in its country and region, the next natural step would be to look to expand globally.

This is especially so for Uniqlo, but the brand has met with considerable challenges. Up till now, the brand footprint and awareness are relatively low outside of Asia, something the company is tackling through global retail store expansion programs, advertising and marketing. In its products, notable differences between global customer groups have been overlooked and Western consumers often complain about its clothes size and fit to body shape. To tackle this, Uniqlo has started partnerships with Western designers like Christophe Lemaire, Ines de la Fressange, Jill Sanders and Marimekko and using sport celebrities such as Roger Federer and Kei Nishikori as Global Brand Ambassadors. One example showcasing Uniqlo's focus on the customer experience is Tadashi Yanai's decision to conduct all operations in English in 2012 - a decision considered rare in Japan. This has contributed to its global success and is something other aspiring global companies can learn from. In terms of non-organic growth, the brand has its own share of acquisitions. In 2012, its first step to penetrate the US market saw Fast Retailing paying USD 290 million for J Brand, a California-based denim firm. In 2004, it purchased Theory, an affordable luxury brand which is quickly developing into a one billion dollar business. The Uniqlo brand was set up to be all about the Japanese philosophy of simplicity and essentiality, and this is reflected throughout the brand's marketing, communications, and operations. It is indeed impressive how Uniqlo has managed to transform from a single inherited men's tailoring shop from Tokyo into a global casual wear giant and one of the most impressive brands from Japan and Asia.

Describe Uniqlo's digital initiatives that it believes will help it grow and stay ahead of its competitors. (25 marks).