UNIQLO'S First Quarter Profit Declines, Why Did AI And Retail Reform Fail To Recover?

At present, there is still considerable room for optimization in the new retail market driven by big data.

According to the first quarter report released today by the fast retailing group of UNIQLO, the sales increased by 4.45% to 644 billion 466 million yen in the three months to November 30, 2018, and gross profit increased by 2.44% to 324 billion 800 million yen compared with the same period last year. Net profit decreased 6.45% to 73 billion 476 million yen compared with the same period last year.

During the period, the sales of UNIQLO Japan decreased by 4.3% to 246 billion 100 million yen compared with the same period last year, while operating profit dropped 29.9% to 37 billion 900 million yen. Although the new merchandise and fashion goods such as special grade wool, knitted sweaters, heavy sportswear, fleece and knitted jackets were still popular, but because of the high temperature in October and November, the flagship products of the brand winter were still unsalable.

But UNIQLO's sales in e-commerce channels registered a strong growth of 30.9%, with revenue rising from 9.7% in the same period last year to 7%.

Up to now, UNIQLO has a total of 788 retail stores in Japan, with a total of 11 new stores and 6 outlets.

The group said in its earnings report that although the sales of UNIQLO in Japan were down by the influence of warm winter weather, its overseas market performance, including greater China, continued to rise steadily, continuing the good trend of double growth of revenue and profit. The first quarter sales volume rose by 12.8% to 291 billion 300 million yen, and operating profit rose 12.6% to 52 billion 500 million yen.

Among them, UNIQLO's performance in mainland China was the most significant, with double-digit growth in both revenues and profits, mainly due to the brand's overall channel layout in the market.

In addition, thanks to the re adjustment of product mix and channel layout in the US market, UNIQLO's performance in the market has finally improved, and both revenue and profits have recorded a substantial increase.

UNIQLO has benefited from the increase in the number of stores in Europe, and its sales performance has also improved strongly, especially in Russia.

In September last year, UNIQLO opened its first store in Amsterdam, Holland, and opened the largest flagship store in Southeast Asia in Philippines, Manila in October of that year.

In addition to UNIQLO, another leisure fashion brand GU of XXX group also declined in the first quarter, although sales increased by 7.7% to 65 billion 400 million yen, but operating profit fell 4.9% to 8 billion 500 million yen.

Product unmarketable artificial intelligence analysis of weather data in the mainland why become "chicken ribs".

UNIQLO has been accelerating the expansion of its overseas market, while its performance in the domestic market has been flagging again because of the weather.

Fast fashion brand UNIQLO released its 11 performance in the Japanese market, same store sales fell 4.3% year-on-year, total sales fell 4.4%, has been declining for two consecutive months.

In the three months ended November 30th, sales grew by 4.45% year-on-year, gross profit increased 2.44% year-on-year, and net profit decreased by 6.45% compared to the same period last year.

UNIQLO Japanese same store sales fell 4.3%, operating profit fell 29.9%.

For the decline in performance, the head of the fast retailing group of UNIQLO's parent company is mainly affected by overheated winter weather, resulting in unsalable products such as coats and knitted sweaters.

The weather is closely related to fashion. It's not news. Earlier, it was reported that there was a "clear relationship" between temperature and retail sales. Nearly half of the retailers admitted that weather was one of the three external driving factors affecting performance, while the main brand of UNIQLO was deeply aware of it.

In September 2017, due to continuous rain and rainy weather, consumers' demand for summer clothing was weakened. UNIQLO's same store sales in Japan recorded a 3.4% decline, the biggest decline in the past 8 months.

In December of the same year, the same store sales of UNIQLO Japan, including online sales, increased by 18.1% over the same period last year, mainly due to the cold weather making the winter wear sell well.

In February 2018, the sales volume of UNIQLO products continued to increase in the winter due to the cold weather. Under the premise of the drop of physical store customers, the sales of the same brand stores in February still recorded an increase of 5.1%, while the unit price of customers increased by 4.8%. The total sales volume, including the electricity business, increased by 5.9% over the same period last year.

In order to better reduce the negative impact of weather factors on product sales, XXX launched the production and retail pformation based on artificial intelligence AI in early 2018, namely, through AI analysis of weather and fashion trends and other large quantities of data, to predict the quantity of goods needed, avoid producing excess products, and deliver goods that consumers need as soon as possible.

The application of new technology will help fast marketing group reduce supply and demand bias and reduce the impact of weather on production and sales.

In addition to using AI to reduce the impact of supply and marketing deviations and weather on production and sales, UNIQLO's intelligence is to constantly increase technological innovation on the basis of core products in order to remain unchanged.

XXX will also work with Accenture and other consulting firms to develop a new system that can predict its future buying behavior based on customer purchase records.

Enabling and developing these new technologies is the move of UNIQLO to accelerate the pition from clothing companies to "new digital consumer retail enterprises".

It is noteworthy that UNIQLO seems to have foreseen the impact of this winter's warm weather ahead of time. In November 9th, it launched a series of cooperation with Chinese designer brand Alexander Wang to "re imagine warmth", and all the related products were designed with HEATTECH fabrics.

HEATTECH underwear thermal technology is based on the use of heating fabrics, the principle is through the "absorption of water from the body, change to heat", according to the degree of warmth is divided into 3 different, respectively, warm, warm, warm and comfortable, this UNIQLO and Alexander Wang cooperation is to use the first two files.

After ten years, the cooperation with Alexander Wang is presented on the basis of thermal underwear and so on. UNIQLO tries to weaken it.

In addition to the HEATTECH series, the AIRism series is the breakthrough of UNIQLO in the field of underwear design. It is one of the fist products of UNIQLO, and its main functional underwear.

For UNIQLO, this is not only the innovation of clothing products, but also the entry of technology parts, so that the combination of costumes and technology is actually a "dark line" that runs through all the products of UNIQLO, which is probably part of other brands' "learning not to come".

However, this series of products that are popular in the Greater China region are in decline because of their local ignorance.

Market changes are changing rapidly. This is also reflected from one aspect: there is still a considerable degree of room for optimization in the new retail market driven by big data.