Can "Smart Buyers" Of UNIQLO Become The Engines Of Future Growth Of Enterprises?

When the fashion industry is getting faster and faster, Fast fashion UNIQLO is slowly slowing down, and has launched an endless stream of new marketing methods. Can it become the future growth engine of its parent company's fast selling group?

According to the world clothing and shoe net, the Xun Marketing Group announced the first three quarters of last year's performance report as at the end of May, sales increased by 3% to 1 trillion and 480 billion yen, or about 13 billion 420 million US dollars, net profit from foreign exchange earnings rose 69% to 120 billion 100 million yen about 1 billion 90 million U.S. dollars, but third quarter sales grew 8.9% to 460 billion 400 million yen, adjusted net profit fell to 4.5% yen, which is far below analysts' expectations.

Fast selling group is the third largest clothing manufacturer in the world. Uniqlo , Theory, GU, J Brand, HELMUT LANG, Princesse tam.tam, etc. brand It is regarded as one of Asia's main competitors in Inditex group and H&M group of Zara parent company, and is also the largest clothing group in Asia.

After the release of the earnings report, analysts said that compared with Zara, H&M and other competitors, the growth of UNIQLO's performance has obviously lagged behind, and the future needs to be more vigilant.

In the three months ended April 30th, the sales of Zara parent Inditex group rose 14% to 5 billion 600 million euros, and net profit rose 18% to 654 million euros. In the second quarter ended May, sales increased by 10% to 59 billion 540 million Swedish Swedish Crown around 6 billion 980 million dollars, and net profit increased 10% to 5 billion 900 million grams by about 663 million dollars over the 10% quarter of the year, exceeding market expectations.

In contrast, XXX group's growth in the third quarter ended May 31st was not ideal. According to the report, sales of the group's core brand UNIQLO in Japan increased 3.5% to 198 billion 300 million yen compared with the same period last year, operating profit dropped 18% to 23 billion 800 million yen, and same store sales increased 2.7%, up mainly from golden week, mother's day and UNIQLO anniversary promotions, with an increase of 17.3% in online sales, accounting for 6.2% of the total sales. According to the report, Japanese sales in UNIQLO grew by 1.2% to 653 billion 400 million yen in the first 9 months, while operating profits dropped 0.6% to 92 billion 600 million yen.

The picture shows the main performance data of XXX group in the third quarter and the first three quarters.

But UNIQLO's performance in the Greater China region, South Korea, Southeast Asia and Oceania was strong, driving overseas business sales to grow 17.5% to 168 billion 700 million yen compared with the same period last year, operating profit grew 50.7% to 19 billion 300 million yen, while sales in the first 9 months increased 5.4% to 561 billion 500 million days, and operating profit increased 61.3% to 68 billion 100 million yen.

By Region:

In Southeast Asia and Oceania, UNIQLO T-shirts, Polo blouses and women's blouses and dresses are best sellers.

Thanks to holiday promotions, the profits of brands in Greater China increased further.

In Europe, business profits have been reduced due to the increased cost of new stores.

However, the situation of UNIQLO in the United States is still hard, and sales and profits have both declined.

As of the end of May 2017, UNIQLO has added 143 stores in the international area, with a total number of stores of 1071.

Its global brands, including brands like Theory, J Brand and GU, recorded an increase of 6.5% to 92 billion 700 million yen in the third quarter, while operating profit increased 3.8% to 9 billion yen over the same period.

The main brand GU's operating profit continued to decline during the period of new product inventory shortage and design lack of innovation, while Theory's sales and profits increased significantly after the new office leisure wear category. The same store sales of French brand Comptoir des Cotonniers continued to record negative growth, but the effective control of benefit cost was narrowing. The performance of Princesse tam.tam brand and denim brand J Brand was worrying, and sales and profits continued to decline.

According to the different performance of various departments and regions, XXX Group expects that its sales in the fourth quarter will continue to rise in the Greater China region, Southeast Asia and Oceania, and the losses in the US region will also narrow sharply.

For the 2017 fiscal year ended August 31st, XXX expects sales to rise 3.6% to 185 trillion yen over the same period, while net profit has exceeded the expected 100 billion yen in the previous year. Nevertheless, the group said it would maintain its original expectations in the light of potential losses and exchange rate fluctuations of its subsidiaries.

In terms of the number of stores, Xun Group expects that by the end of August 2017, the group's overall store network will expand to 3304, including 841 UNIQLO Japanese stores, 1088 UNIQLO international stores and 1375 global brand stores.

Some analysts point out that there is a lagging behind in product design at UNIQLO. The style and design of products are almost identical each year. Last year, the growth rate of UNIQLO sales in Japan was the slowest growth in 4 years. With the promotion of the Internet, the fashion business platform is bringing more challenges to the traditional fast fashion industry, which immediately responds to consumer demand and constantly creates freshness.

According to a report released by Fung Global Retail &Technologh, a retail research firm, "Fast Fashion Speeding towards Ultra-Fashion", the European fashion business platform is shorter from design to shelf than Zara and H&M, and can update more products in fixed time.

In addition, UNIQLO's huge store network in Japan is also a drag on its performance growth. In early days, UNIQLO quickly occupied most of its market share by opening its stores in Japan, and then began to expand to the global market with the support of the group's funds. But as the global retail industry continues to accelerate, too many stores in UNIQLO become the burden of restricting their development.

In the face of rising rents and manpower and resources, the profitability of XXX group has been much lower than before. The group's share price dropped to its lowest level in June 2015. Since the beginning of this year, the stock price of XXX group has accumulated a decrease of 13.4%, and its market value is currently about 3 trillion and 670 billion yen.

It is noteworthy that UNIQLO did not shrink from all kinds of difficult challenges and did not blindly and blindly implement the strategy of closing stores. Instead, it made technological innovations to the existing stores while controlling the pace of entity expansion. The goal was to achieve a new mode of retail sales combined with online and offline integration.

After realizing that the physical store network is too large, UNIQLO began to slow down the pace of expansion. Since 2015, it has shifted its focus of development to online spanfer, and has adapted its electricity business to meet the needs of consumers. In addition to its three party e-commerce platform such as Amazon and Alibaba, UNIQLO is now introducing high-tech unmanned machines and LED digital screens to physical stores to enhance consumers' shopping experience. Data show that in the third quarter, its online sales increased by 17%.

The picture shows the "smart buyer" electronic screen in UNIQLO stores.

According to an interview with CMO Wu Pinhui of Greater China District in UNIQLO, compared with various emerging technologies, operability and sustainability are more important elements of UNIQLO, so they choose to shop online to promote a simple and practical "intelligent buyer" LED screen. Through this screen, consumers can browse new products in shops, wear suggestions and preferential information, and even have simple interactive games. At present, the "intelligent buyer" has covered 100 stores in Beijing, Shanghai, Guangdong, Tianjin, Fujian and other provinces and cities. UNIQLO said it will be promoted to all the UNIQLO stores nationwide in the next one to two years.

Wu Pinhui revealed that according to the test results at this stage, "intelligent buyers" brought about 15% improvement in the conversion rate of real shopping. In addition to "intelligent buyers", Wu Pinhui also said that UNIQLO would have to work with music in cross-border cooperation. In the future, UNIQLO's clothing will be penetrated into more scenes to enhance the freshness of consumers.

In fact, UNIQLO knows very well that the era of speed is the end of the day. It is the key to make a solid product and marketing model reform.

In May this year, UNIQLO launched a cherry blossom Japanese beer for the British market, which is brewed by Magic Rock Brewers, a British brewery, and is planned for sale at the famous Tate Modern art gallery in Britain. Earlier, UNIQLO had sold products such as chopping boards and adhesive tape in flagship stores in Soho District, New York.

At the same time, UNIQLO, CO editor of the magazine, Matsuura Ataro has launched an online column LifeWear Story 100, but currently only Japanese version. UNIQLO has not introduced the project to China for the time being. In August last year, UNIQLO also published the slogan "why we dress" with the slogan of LifeWear. This time, the design of simple basic products went up to the lifestyle and philosophy level through storytelling.

According to the analysis, UNIQLO's main marketing strategy is to talk about lifestyle with consumers, and its intention is to distinguish between competitors Zara and H&M.

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