UNIQLO Promoted The Core Of Digital Pformation Is To Strengthen Enterprise DNA

After more than 30 years of development, UNIQLO has become the world's leading apparel retailer and has seen strong growth momentum in the Greater China region, Southeast Asia and Oceania, Europe and other markets.

UNIQLO's predecessor was a Western-style clothes shop in Yamaguchi Prefecture, Japan.

In 1984, founder Ryui Masa introduced and improved the SPA (private brand professional retailer) mode. Through planning, manufacturing and retailing as a vertical integrated business model, it reduced intermediate links, effectively controlled the cost of stores, and made UNIQLO stand out from many fashion brands.

UNIQLO is a consumer oriented group of all ages. It provides a functional clothing, comfort and design sense of clothing products with the brand concept of "LifeWear service life", triggering a wave of hot selling.

Since 2004, UNIQLO's revenue has basically maintained its annual growth rate of two digits.

The secret of UNIQLO's success lies in adhering to the concept of customer first and continuously satisfying the needs of consumers.

In recent years, with the change of the environment towards more technology, digitalization has been integrated into every aspect of people's life.

In order to cater for the needs of consumers in the digital era, UNIQLO promoted the digital pformation, from the aspects of strategy, marketing, organizational structure, talent management, etc., effectively configuring various resources, integrating online and offline, thus improving the consumer experience and achieving remarkable results.

Digital strategy on demand

In 2017, Liu Jing, chairman of fast selling group (UNIQLO parent company), put forward a "bright plan" at the shareholders' meeting, announcing the pformation of UNIQLO to "digital consumer retail companies", that is, importing digitalization from design, production, manufacture, sale to full staff through cooperation with technology companies.

To this end, Xun marketing group has announced cooperation with consulting firm Accenture, technology giant Google and logistics company Daifuku Co, in the way of big data, artificial intelligence and technology, to predict customer purchase behavior, increase customer demand into product and service speed, and achieve warehouse automation.

The company opened an open office space of about 1500 square meters in the Tokyo headquarters building, breaking the barriers between departments, so that designers, planning, sales and other departments should closely communicate, stimulate staff creativity and speed up decision-making.

Behind this plan, Ryui Masa tried to solve three pain points of UNIQLO.

First of all, change the existing industrial mode.

UNIQLO's past industrial mode is relatively simple, with Mr. Hou's postpartum sales as the main product, which is the process of pushing goods to consumers.

After pformation, UNIQLO, through digitalization of supply chain process, based on gaining consumer data and external market information, can better predict the trend of commodities and specific market demand, integrate more consumer feedback into product design and function upgrading, increase the probability of "burst" and pull consumers into UNIQLO stores.

In short, UNIQLO's move is aimed at subverting the "push" mode of manufacturing in the past and turning it into a demand driven mode.

Second, optimize inventory and speed up the supply chain.

To do retail is to do inventory. As we all know, inventory is the biggest problem in the retail industry, including clothing.

Take the UNIQLO HEATTECH warm underwear products as an example. In past systems, warm underwear must enter warehouses in May each year, adding a lot of extra costs.

After the digital pformation, the uniqo speeds up the delivery of goods through logistics automation, reduces the inventory time of goods, improves the relative benefits and saves the cost to the maximum.

In the traditional retail industry, the supply chain process of clothing usually takes three to six months, experiencing a number of links, such as printing, making, pportation, and so on.

Through the digitalization of supply chain, UNIQLO can get real-time feedback on store product sales.

Take the U series wide leg jeans at the beginning of 2019 as an example, after the first wave of hot sale is out of stock, stores will immediately gather information and increase orders, so that replenishment can be made more timely, thereby extending the heat of "explosion" and promoting further sales promotion.

Digital technology and big data help to improve the efficiency of supply chain, so that UNIQLO can make plans while selling.

Third, online and offline integration.

To build a digital driven consumer retail companies, UNIQLO integrated offline stores and online sales businesses.

In 2018, UNIQLO announced its cooperation with Daifuku Co, a logistics company, to invest 100 billion yen to establish a new distribution system and gradually realize the automation of warehousing and distribution systems.

Taking the Ariake warehouse in Tokyo as an example, the number of warehouse personnel will be reduced by 90% and the 24 hour operation will be realized after full automation.

The new distribution system can better support the growth of online sales and provide convenience for online consumers to deliver the same day or next day, or the opportunity to extract or return products online at the nearest stores or local convenience stores.

Through digital means, UNIQLO shortens the distance between Front terminal (store customers) and End terminal (background customer service), which helps UNIQLO build closer ties with consumers.

In the 2018 fiscal year, the sales of UNIQLO in Japan amounted to 864 billion 700 million yen, of which 7.3% of the total sales were online channel sales. The Greater China market, as the main driving force of UNIQLO's overseas market, accounted for 15% of the total sales.

UNIQLO hopes to expand the proportion of online sales to 30% by launching services that enable consumers to buy goods anytime and anywhere.

The core is to strengthen enterprise DNA

The world has entered the digital age, and every enterprise needs to keep up with this change.

As a garment manufacturing retailer, UNIQLO hopes to create a new and dynamic industry in the digital age to get rid of the traditional barriers of business.

But no matter how the times change, the mission and purpose of an enterprise is to satisfy the needs of customers.

The core of the digital pformation of UNIQLO is to build a customer centered experience and strengthen the DNA of LifeWear service life.

Under the concept of "LifeWear service life", UNIQLO's mission is to create comfortable and high-quality daily clothes and enrich people's lives.

This brand DNA enables UNIQLO to distinguish itself from other clothing brands. UNIQLO pursues the price that everyone can afford to provide consumers with high quality, fashionable daily necessities to make life better.

Under the brand positioning of life service, UNIQLO sells life necessities and life plans.

This means that it can be found in UNIQLO when it is cold, hot, work sports and clothes worn by the elderly and children.

From this perspective, UNIQLO's demand for customers is huge, and with the consumer's life, it is the pursuit of UNIQLO.

In this process, the use of digital means becomes very important, because digitalization can help UNIQLO to understand more accurately and quickly the needs of personalization and scenes of all kinds of people, and to truly "LifeWear life suit" brand DNA to the details of product and service experience.

Through digitalization, UNIQLO can optimize the supply chain system, capture the real needs of customers with digital technology, and communicate directly with individual customers. This combination of information with uniforms stores and store managers can help UNIQLO better understand and serve consumers.

Having digital capabilities can help UNIQLO speed up the business cycle and shorten the production cycle, enabling UNIQLO to have the ability to provide consumers with the exact products they need.

The three step is to build digital mechanism.

As the first overseas market of UNIQLO, the Greater China region is a relatively early and in-depth area for the practice of digital pformation.

The digital pformation of UNIQLO has made more localization attempts here.

As early as 2009, UNIQLO entered Tmall's e-commerce platform.

In 2014, the management of the Greater China region noticed the trend of China Mobile Internet's rapid development. Both in terms of media delivery, digital content innovation, and brand and consumer communication platform construction, the trend of mobile Internet was changing.

With the mobile Internet, brands can communicate more quickly and directly with more diversified content.

And UNIQLO, which has a retail attribute, needs to maintain a fast speed of commodity rotation through more intensive and in-depth communication with consumers.

So UNIQLO made a bold attempt in China and decided to build a digital platform for consumption, content and experience on the Internet side.

The digital platform can break the limitation of traditional retail in time and space, and serve consumers without dead ends.

Build self media platform and set up digital team.

In order to get rid of the traditional advertising agency mode, consumer communication is conducted according to project or quarter. UNIQLO has invested a large number of team resources to build the media platform.

In 2014, UNIQLO began to set up a digital marketing team. At present, there are 10 people in the team. It is a young team aged 25-30.

UNIQLO believes that we should first understand what customers want, and we need to know their products, brands and tonality. So, about 80% of the content and creativity of UNIQLO in micro-blog and WeChat are created by digital marketing team. Agents are only responsible for platform integration.

In addition, the digital marketing team is also responsible for brand value creation, platform operation, and digital experience and technology development.

How to communicate with consumers through the self media platform?

UNIQLO believes that the definition of media platform should be clear.

First of all, we should create content based on internal cognition, then ensure the subsequent operation of content, and gradually form two-way and direct communication with fans and consumers. Finally, we will introduce communication to online and offline, so that consumers can have the desire to experience and purchase.

UNIQLO has operated on media from WeChat, micro-blog, nice and other platforms.

Taking WeChat public account as an example, UNIQLO's content is mainly based on practical service information, which can be divided into three main categories: sharing information or creativity that readers do not know, inviting readers to try new designs and other contents that enable readers to enjoy, feel happy and relaxed.

Not deliberately selling products with WeChat, reducing the pressure of consumers being persuaded to buy, communicating with consumers through brand stories, design concepts, interactive games, etc., so that WeChat fans can achieve explosive growth.

The operation of UNIQLO on micro-blog and nice platform is no longer satisfied with one-way communication. Instead, it produces more interactive experience with users, including UGC (User-generated Content, user production content), PGC (Professional-generated Content, expert production content) experience, and obtains consumers' very specific feedback on goods, for clothing style, size, shop service satisfaction or unsatisfactory reasons, and so on, and further obtains consumer big data.

After nearly 5 years of operation, the number of fans of UNIQLO's digital platform has exceeded 100 million, with an average monthly reading of nearly 100 million people.

Weekly cumulative page views can break 100 million.

If we turn natural traffic into advertising, we need to invest a lot of money.

It can be said that the successful operation of the digital platform has also helped UNIQLO to save a lot of money in marketing.

Access to digital payment.

In order to further improve the digital experience of consumers in stores, in October 2015, a year after WeChat's payment was launched, UNIQLO announced that it would cooperate with WeChat to pay more than 300 stores across the country to access WeChat.

Alipay is also a strategic partner of UNIQLO to promote the digitalization of stores.

It not only simplifies the payment process of consumers, but also improves the collection and service efficiency of stores.

It is worth mentioning that, through digital payment, UNIQLO can introduce consumers into the brand's own digital platform, brand APP and brand public numbers, get consumer information, do precise positioning, retain consumers under the line, maintain communication with consumers, and constantly educate consumers in communication.

In recent years, UNIQLO has continuously optimized its platform operation, and has also participated in many large marketing activities at the payment side, forming cross-border cooperation combined with many properties, different industries and IP.

Get through online and offline.

The digital means made UNIQLO consumers have a better experience in retail service. The flagship store launched in 2018 (official website, official APP, WeChat applet, and the four major entry codes for offline scanning) helped UNIQLO achieve online and offline access to commodity information, inventory, service and purchase.

Before the launch of the flagship flagship store, consumers will have to go through at least four steps when they want to buy a garment on the UNIQLO public number: save pictures, check out nearby UNIQLO stores, compare pictures to find clothes, and pay.

If there is no suitable size in the store, help the staff to pfer the goods to other stores.

In 2018, the flagship flagship store was launched. Consumers can directly enter the online shopping mall through the channels of WeChat, micro-blog, shops and other online shopping centers through the "one click, buy with the heart" function, and choose to collect goods at home or store stores, thus greatly reducing the intermediate links.

After online and offline, the value of stores is mainly reflected in solving the pain point of online shopping.

Long waiting time, poor flexibility and difficult return are common faults in online shopping. Take the O2O function of flagship flagship store as an example, the goods purchased by consumers can be delivered directly within 1 hours after placing orders.

While the spot picking service provides convenience to consumers during the Chinese new year or business trip.

The personalized value-added service of the store allows customers to change the size and color of the products on the spot when they try to try the goods on the spot.

Online, UNIQLO continues to optimize content and "follow the heart" function to provide consumers with different occasions of clothing recommendation, to solve the problem of consumers do not know how to match.

The use of "heart to send" function, you can choose to give clothes to friends around, so that the flagship store has social networking + e-commerce attributes.

Transformation results show

Efficient work.

Ryui Masa said: "let all our employees have access to information, which is one of the foundations of a clear plan."

It is a time-consuming task to convey information to employees before they join the digital tools.

You should print out the relevant mail in the shop or learn a PPT with dozens of pages.

Now, UNIQLO introduces the communication and learning videos of employees in the enterprise digital platform, and it can clear things clearly in one minute, and employees can also take out mobile phones to learn at any time.

It can also be very quick in problem feedback.

In the shop manager group, questions can be answered within a few minutes, and it is a direct solution.

The digitized way of work enables information to flatten, convey and feedback quickly. A workweek is no longer going to be in front of the staff one by one. It can be seen in the work group without charge or non supervisor. All employees can see it in time.

That's why UNIQLO can make 20 thousand employees and 700 stores move quickly in Greater China.

Better promote enterprise culture.

UNIQLO has been emphasizing customer oriented corporate culture and employees have a strong sense of service.

After the use of digital tools, UNIQLO employees gradually found that this highly efficient way can improve their time management and customer satisfaction can be further improved.

So the attitude of employees begins to change, and gradually embrace the new way of working with digital tools to create value.

Enterprises using digital tools can better reflect the importance of "real-time".

Not only can employees' questions receive timely responses, but customers' feedback at the scene, such as broken product code, difficult posters and invalid scanning code, can be understood in time by headquarters.

In the short term, digitalization increases the frequency of feedback between employees and customers, and better satisfies their aspirations to be heard.

In the long run, enterprises will have a better understanding of what is effective and where the problem of implementation may be, so as to better provide solutions and identify which items are truly effective for customers and stores, and ultimately optimize various business plans and implementation plans.

Widely collected data can help enterprises understand themselves better and find problems and solve problems faster.

Brand value promotion.

From the development of UNIQLO in recent years, the whole Europe, Southeast Asia and greater China are growing very well. While expanding their stores, business efficiency has been significantly improved.

In Japan, the overall revenue and earnings in 2018 also improved.

UNIQLO Greater China maintained its revenue for four consecutive years, earning a two digit growth in both revenue and net profit in 2018.

Although it is difficult to give accurate data to UNIQLO due to digital pformation, it is obvious that UNIQLO has made the overall operation and brand in a better momentum through digitalization.

With the help of digitalization, UNIQLO reduces the cost and risk of marketing, improves operational efficiency, further catches the needs of consumers, makes it easier to optimize products and provide value-added services, effectively enhances customer loyalty, and ultimately gains brand value.

Facing the future, UNIQLO hopes to integrate the online and offline integration to enable consumers and consumers of countries and regions that have not yet opened stores to learn more about the brand and products of UNIQLO.

And through customer feedback, store data, electricity supplier data and other big data, provide better consumer insight, further strengthen the ability of commodity design and store innovation, and integrate into sustainable development and other public concerns, continue to improve the value of goods.