Unscramble The Effective Growth Of UNIQLO Products

After entering the department store, the world's shopping malls, shops and colleagues and partners have gradually formed some views on retailing. I remember a more agreeable view at that time that "goods sell mountains", logically, department stores need to provide consumers with the most abundant commodity choices. This abundance includes both rich categories and enough single products under various categories. In addition, the domestic joint operation system does not require the department stores to hold stocks with their own funds. Therefore, this "richness" is more and more intensified as the core of the field management.

For the first time, I did not go back to the store of UNIQLO for two years. Until I went to the United States to have a shopping mall, I was instantly petrified at the flagship store of Fifth Avenue UNIQLO: no matter from the combination of commodities, merchandise, style, display and fabric, it was not the UNIQLO library that I was impressed with. Since then, I have been at Fifth Avenue flagship store at least two times a year, walking many times along the line, and seriously feel the essence of this great enterprise for commodity management. As a retail practitioner, when you look at such a commodity mix, you know that UNIQLO is definitely making money, so it is not surprising that its boss is the richest in Japan.

　　 Does UNIQLO's success cost and price?

It can be said that. Because the success of any enterprise must have enough gross margin for products and services. From the original intention and business philosophy of UNIQLO, cost and price are definitely a core element of its operation.

The full name of UNIQLO is UNIQUE CLOTHING WAREHOUSE. Its inner meaning is warehouse type shop. The founders came back to Japan to imitate innovation after they saw the hypermarket department store form in the US. They hoped to provide goods to customers by reasonable and reliable prices through supermarket self service shopping.

From the point of view of commodities, the category is very simple, the number of secondary categories and classifications is not large, and the quantity of each order is very limited, which is very similar to the US member supermarket COSTCO. Such strict control of the number of SKU business, as long as successful means that the vast majority of single products are "exploding". In the age of industrialization, explosion means scale effect, which means low cost and low price.

However, if we think further, we should remember that vassal, who has made a pledge to become a "Muji" designer, has challenged UNIQLO with similar commodity combinations and lower prices, but the result has been known to everyone. ZARA, GAP, OLD NAVY and other similar fast fashion casual wear areas are very competitive in terms of price, but basically these years have entered a state of slow growth.

These companies do not want to deny the important role of price in competition, but to prompt people to pay attention to what is behind the price. What determines enterprise's life and death is not the price representation, but the underlying factor of price competitiveness. There is no Maori space support. For the price war of traffic, the sacrifice can only be itself.

　　 What is the core of retail?

Just as real estate has the essence of "location, location or location", the core of retailing can be classified as "commodity, commodity or commodity". In order to illustrate this problem, I borrow some typical cases of UNIQLO to share some thoughts and experiences on retail commodity management in recent years.

First of all, let's look at the core content of commodity management category management.

UNIQLO has maintained the simplest combination of products for many years: men, women, children, underwear and accessories. Its online shopping mall is even simpler. Even underwear is not listed as a single category.

How difficult is it to maintain such a simple combination? To tell the truth, it is very difficult. This requires great insight and courage from the manager and the system. Logic is very simple. Enterprises are going to grow. The easiest way to grow is to expand the category. When it comes to this, we should understand why many retail businesses and brands are going downhill after the expansion of the category. The most typical example is the sale of shirts from the shirts to the customers of mops.

UNIQLO success Commodity management One of the achievements is to maintain high growth without expanding the category.

How can we not expand the growth of categories? UNIQLO's choice is to focus on basic funds. People who have worked in department stores know that basic funds must be the largest and most profitable ones, but department stores and most brand stores need more popular money as a commodity to attract customers.

So how does UNIQLO achieve the balance between basic funds and passenger flow? From my observations, UNIQLO has adopted several ways to solve this problem. First, we must give up some consumers, and insist on the high value customers who want to give up the basic funds. This requires courage and determination most. The second is to make up for the shortage of basic funds with unique fabrics through technological innovation in fabrics. As we all know, HEATTECH, which has been selling for ten years, is also attracting some high value consumers. The third is to integrate the basic elements of the design, through Designers Innovation Project and Uniqlo Innovation Project, cooperate with external designers and design directors to participate in the design of two projects, and promote the deduction and grasp of the basic elements of fashion elements. Finally, I have to mention the unique skills of UNIQLO -- the management method of space category: effectively linking the category management process and space display plan, and displaying the most splendid and rich display of limited categories and commodities, thus enhancing the visual attractiveness of consumers. In particular, ingenious repetitive display techniques enable consumers to both be convenient and able to ignore the limited number of products.

Next, look at UNIQLO's single product management. The core feature is still subtraction: the use of limited number of single products to achieve growth. This is the most difficult technology in retail business. Like a gunner, he needs a bullet to hit a target rather than a machine gun with enough bullets.

　　 How can a single product subtraction be done?

When it comes to subtraction of single product level, we have to mention two. Retail industry In the case of COSTCO, there is also a more extreme German retail business ALDI. In this supermarket, each category usually has only one brand of merchandise to choose from. COSTCO is a member operated enterprise. The initial stage is a test of the single product management capability. But now that there are enough members to consume data, it is easier to make subtraction. The products of the company are mainly food and daily necessities. As long as they arrange enough commodity experience personnel and quality control personnel, and market research methods, it is easier to control the quantity of single products. As a fast fashion company, UNIQLO, faced with the successful experience of ZARA, which represents a company based on "less money, less quantity" and fast fashion, how dare to do things that are totally opposite to ZARA and succeed. This is what I admire most.

Dare to do a single level of subtraction, data is certainly essential. But the author thinks that the whole supply chain control based on subtraction thinking is the core capability. As a brand of SPA, UNIQLO is far from the other companies in terms of its organizational structure and business processes. But there are many points to be noted in details. For example, in the planning process, UNIQLO calls it the R&D link, and manages the design and planning with the mindset of R & D management. In this part, the research and Development Department of UNIQLO, apart from its continuous research on fashion and lifestyle, usually convened a meeting with the buyers, fabrics and market participants one year in advance to determine the purchasing parameters of styles, fabrics, etc. after a year.

The hardest part of this link is to predict in advance a year. UNIQLO has specialized departments to manage raw material selection and procurement, and has made use of their negotiating advantages of about 6-7 billion shipments per year to obtain unique fabrics like HEATTECH, SILKY DRY, which support the uniqueness of products. The quantity control of UNIQLO procurement is very precise, thanks to the one year purchase plan and the positioning of basic funds, and the dynamic replenishment system is in place. Manufacturing management is the most valuable link for Chinese counterparts to learn. Similarly, commissioned production, but unlike other brand outsourcing production management modes, UNIQLO has a team of experts and senior technical workers required for all production processes. These professionals will be assigned to the factory to help them improve their technology and production level, and control product quality from the source rather than the traditional process control concept. All of these actions are to achieve the ultimate goal in detail, ensuring that every limited product has no management flaws, and only needs market inspection.

Finally, share it. Uniqlo Site management of commodities. If you were once a consumer of UNIQLO, try to recall two things: first, is UNIQLO the most missing department store that you have visited? Secondly, does the display of UNIQLO make you feel comfortable and convenient? Code missing is the eternal problem of department stores, but UNIQLO solves this problem through basic funds and good dynamic inventory control. In the display area, the method of category space management was adopted, and automatic display was basically achieved. Automatic listing means that when a garment is on the production line, it knows the place of that store. The management meaning of this basic skill is very clear to the insiders.

According to the usual practice, a small partner who likes to think can also consider this question: if all customers, Dangdang and Jingdong follow the subtraction growth mode and be able to maintain the growth rate in recent years, what is the state now?