What Is The Essence Of MUJI'S Integrated Business Model?

In today's commercial society, the SPA mode has attracted wide attention as an international retail mode. More and more domestic and foreign retail brands have followed suit. So, what exactly is the SPA mode?

The SPA mode is known as the Specialty retailer of Private label Apparel, which was proposed by the American Apparel giant GAP in 1986 annual report. It is a vertical sales form integrated from commodity planning, manufacturing to retail, in order to define the new business system of the company. After that, the SPA mode was successfully applied and popularized by UNIQLO, Japan.

Until now, the SPA mode has helped many retail brands to become international giants, such as UNIQLO, H&M, ZARA, Muji and so on. Many domestic enterprises have also jumped to national brands through the SPA business model, such as Hai Lan's home, hot air, famous brand products and so on.

SPA mode set "design - production - Retail" as a whole, greatly reducing the production and marketing process, so that the operation efficiency of enterprises has been improved qualitatively. The SPA model is commonly used in the field of apparel retailing, and the real mode of application in the field of retail sales is the Muji which is now used in 32 countries around the world.

We believe that the enterprises that have deeply studied the user value will have a future. In order to help home enterprises to better serve users, we launched a series of reports focusing on user value in June 2019. We selected 26 excellent enterprises to take the essence of "focusing on user value" to provide some suggestions and development ideas for home enterprises.

Focusing on seventeenth articles of user value, we will explore Muji's SPA business model.

In the spirit of minimalism and nature, Muji has begun to build SPA business model.

MUJI is a private brand developed by Xi you company in 1980. In 1980, Japan's GDP ranked second in the world, second only to the United States. At that time, the whole Japanese society was carrying out large-scale industrial production in a radical way, resulting in huge waste.

MUJI is born under such a background. At the very beginning of its establishment, Muji's brand idea was to oppose mass production, mass consumption and massive abandonment brought by commercialism, and advocate the simple and environmentally friendly products produced and consumed by the whole society. In the 80s, a rapidly developing Japanese society, this idea is a brand new idea that runs counter to the Japanese commercial society. In this way, Muji has begun to build SPA business model. The SPA mode includes the following steps:

1, customer participation in commodity development. MUJI can collect customers' opinions through questionnaires, then analyze and publicize the results of the questionnaires, and mobilize more customers to vote on the results of the poll. On the one hand, this way of two-way communication enables customers to get a better understanding of Muji brands, products and concepts. On the other hand, this way can also help Muji know the real needs of customers.

2, market investigation and guidance design. After determining the needs of consumers, MUJI products are designed according to consumer needs and feedback. In this process, Muji is designed with simple and natural brand concept to omit the possible waste product design. The most prominent example is Muji which has been used in today's unified packaging. The packaging of all products is designed with the simplest design to minimize the use of materials.

3, design and guide production. In the production process, Muji is based on the principle of minimalism, attaches importance to the quality of the product itself, and omits unnecessary processes. For example, we need to save pantyhose, flattening letinous edodes, dyeing and drying clothes.

4, store location and supply. After producing the product, Muji needs to confirm the address of the store and the supply plan of different stores through market experience. In the process of shop development, Muji has more than twenty criteria for site selection, including population density, daytime population ratio, income gap, distance from the station, number of parking spaces, whether there are movie theaters, staircases, store area, distance from entrance, competitors, etc. All the scores of the judging items reach a certain standard before they can be opened.

5, inventory management. Through the information reflected by each SKU operating data, store managers can decide the type of stock, quantity and time of purchase, so as to reduce inventory and shorten the inventory cycle. And inventory statistics can verify whether the above commodity development process really meets the needs of consumers.

Facts prove that Muji's minimalist business philosophy is forward-looking. In the late 1980s, Japan's economy began to bubble and began to enter the great depression. Against this background, MUJI products with high quality and low price are more and more popular among consumers.

In 1989, Muji was officially separated from its parent company and became independent. MUJI has become the most popular retail brand in the world. From March 2018 to February 2019, Muji achieved operating income of 410 billion yen and net profit of 46 billion yen. Because of the great success of MUJI products, more and more enterprises began to follow the SPA model.

Compared with the traditional production and marketing relationship, the SPA mode has greatly improved the production and operation efficiency of enterprises. As a bridge, enterprises connect the back-end factories and front-end stores to realize the fast circulation of market information and guide production.

Behind the complete production and marketing chain of Muji, there is a strict and efficient operation system supporting the operation of the enterprise. The system includes rapid product development system, small batch and timely production system, efficient logistics system, sound terminal sales system, and market information quick response system. Each system performs its duties accurately, and ultimately the entire SPA mode is able to function. This is the real value of the SPA model.

However, many enterprises only see the surface of SPA mode, and erroneously believe that self research, self production and self marketing are SPA models. Blindly following the example can only end in failure. There are many details in the development of SPA mode in China's localization process. It is necessary for enterprises to solve these problems through thinking and practice according to local conditions.

Avoiding the pit: there are problems in the localization of SPA mode. Blind imitation is undesirable.

The reason why the SPA mode can bring fast development of fashion brands is that the front-end market is closely related to the back-end production, and the enterprise can maintain a keen market sense of smell. On the other hand, SPA mode can speed up the operation efficiency of enterprises and shorten the supply chain link.

However, there are several difficulties in the application of SPA model in the localization process, which may affect the survival of enterprises:

First, fully understand consumers and accurately predict market trends. The premise for enterprises to build SPA mode is to grasp the needs of consumers, such as the development of customer participation in MUJI products. In the process of commodity development, the overseas SPA mode has a very sound "buyer" mechanism, which guides the fashion trend and forecasts the market by professional work.

Our country lacks the corresponding market mechanism, and the prediction of the trend of the enterprises is random. Moreover, most enterprises do not understand the consumers well enough. The production of products that truly meet the needs of consumers' aesthetic needs and practical needs will become the difficulties of enterprises.

Second, control the quality of products. Although the SPA pattern set is designed, produced and retailing together, some brands will be entrusted to other enterprises through the way of subcontracting. There are many chaos in the field of small commodity manufacturing in China, such as crude manufacturing, toxic and harmful materials, etc. When choosing a substitute factory, home brands must be strict in quality control.

Third, open shop mode strictly requires the operation efficiency of enterprises. Based on the SPA mode, the fast fashion giant brand almost adopts the business mode of opening a large store in the luxury business circle. This mode can form advertising effect and quickly establish brand awareness. But the large stores in the business circle mean high costs. Enterprises need fast commodity renewal capabilities, sound logistics system and efficient store operation system. If there is a problem in the whole operation mechanism and the operation of the enterprise is affected, it is very likely that it will not be able to afford the expensive "big store" cost.

The reason why Muji has become the brand of today's retail giant is because it grasps the essence of the SPA mode and accurately grasps the 5 steps mentioned above. In the process of production and operation, home enterprises should firmly grasp the links of design, production, logistics and so on, so that they can cooperate efficiently and rigor.

In addition, the "big store mode" is only the form that is eventually presented to consumers. If enterprises blindly copy the store form and fail to grasp a deeper level of operation strategy, they may be faced with the risk of bankruptcy.