Djokovic an Ace for Uniqlo Australian Opening

How do you go from a single store in Hiroshima just 27 years ago to 1100 stores across 14 countries with $11billion and EBITDA of $1.5billion? Can adding chemistry to fashion take you to be the 4^th largest apparel group in the world (with plans to overtake Zara, H&M and Gap shortly)? How does dressing the world’s best tennis player - Novak Djokovic - play a part in this? What’s the Uniqlo entry strategy into Australia and how have they learnt from their past mistakes? The Uniqlo’s presentation to the 2012 Westfield Retail Study tour spoke of their innovations in fashion manufacturing, their attitude towards recruitment and culture, along with the way they "arrive" in a new country to be very intriguing. 

Location; store design; visual merchandising; PR/marketing; customer service; who and how they employ & induct; culture; profitability; and a product that tests apparel traditions – Uniqlo gets top marks in every area.

In 1985 under the name ‘Unique Clothing Warehouse’, a unisex casual wear store opened in Hiroshima by a 35 year old Mr. Tadashi Yanai.  Now known as Uniqlo, in 1995 they hit 100 stores in Japan and entered into a strategic arrangement with Toray industries - a synthetic chemistry company specialising in fibres and textiles. Their first innovation led to the production of a ‘micro fleece’ jacket for a fraction of the price of comparable products and in the minds of many provided the catalyst for Uniqlo's rapid global expansion which was to follow. But it wasn’t always easy for Uniqlo and their parent company Fast Retailing.

‘Learn by your mistakes’ is a phrase easier said than done. It was in 2000 and with 500 Japanese stores trading well, a thirst for international expansion saw a number of stores open in London. But in the words of Mr. Yanai, “we failed completely”. Three years later and most of the London stores had closed. Two store openings in Beijing in 2005 were closed within a year. With no brand recognition, poor store locations and the perceived need to hire experienced local store managers, their international growth strategy was a disaster. Greater determination and a detailed plan which addressed the reasons for failure has since seen the successful opening of 200 international stores in China, France, Hong Kong, Malaysia, the Philippines, Russia, Singapore, South Korea, Taiwan, Thailand, the United Kingdom and the United States. 

So what’s changed? What can we first expect in Melbourne in 2013 as their Australian store rollout kicks off? Having sat through a riveting presentation by their Head of International Expansion – Mr Shoichi Miyasaka - and having shopped at their stores in Japan, New York, Paris and London, I have a few ideas.

Poor store location and fitout were a major factor in their first London experience but the flagship stores they have opened over the last 12 months point to something very different. Each store contains a real wow factor! Located smack bang in the middle of Tokyo's most expensive retail real estate in the ‘Ginza’ district and surrounded by every luxury brand you can think of, you can't miss the massive 12 storey (4,959 sq metres) jewel in the Japanese crown that opened in March 2012. Boasting the latest and trendiest in the Uniqlo range of products, it acts as a ‘showcase’ for the brand and employs 520 staff, including 100 foreigners whose language skills also cover English, Korean, Chinese, French and Spanish.

Equally impressive is their New York masterpiece again located in a prime spot on Fifth Avenue with 1500 newly recruited staff ready to please. Designed by award winning architect Masamichi Katayama and his firm Wonderwall, this certainly doesn't look like another big box retailer. Instead, applications of natural wood floors, the combination of direct lighting, along with some 300+ LCD screens, 50 registers and 100 change rooms as well as a mammoth atrium as you enter this four storey store, create an atmosphere and experience that won't be forgotten.

The PR and marketing used to create brand awareness when they first arrived in Shanghai involved massive staged promotions and pictures which heavily featured the name UNIQLO and included advertising blitzes on buses, subways, billboards, flyers, even paper bags used by sandwich shops. Stage 1 had images of just the product (ie. top, trousers and accessories) with emphasis on colour and design - the aim to highlight the quality and fashionability of the product. Stage 2 comes a few weeks later and shows an image of the exact same product, but with the addition of price (jeans at AUD$23 and t-shirts AUD$10), shocking the customer at the low prices after admiring the quality. The 3rd stage then shows an image of the same product along with the price, but this time the exact same product is worn by high profile celebrities who have endorsed and partnered with the Uniqlo way. These include Charlize Theron, Susan Sarandon, Cyndi Lauper, Dakota Johnson and Orlando Bloom to name a few.

By mid 2012 Uniqlo was expanding rapidly in the US, China, the UK and France, and had begun searching for a site in Australia. It was also the year Novak Djokovic claimed his fifth career Grand Slam title - the 2008, 2011 and 2012 Australian Open, 2011 Wimbledon and the 2011 U.S. Open. In addition to this, he also won the Men’s Singles title at the China Open in Beijing and competed strongly in the French Open. In a great coup, Uniqlo beat rivals Adidas and Nike to sign him to a 5 year deal as the prime Uniqlo Global Brand Ambassador. In late 2012 they announced the launch of “Clothes for Smiles”, a program developed in collaboration with Djokovic which will establish a US $10 million fund and use it to bring smiles to kids all over the world, nurturing their dreams and giving them the tools to build a better and brighter future. The fund will be established from the USA winter sales of two of their product innovations - HEATTECH and Ultra Light Down.

So what is Heattech and Ultra Light Down? Does hiring Store Managers with NO retail experience work? Where will Uniqlo be by 2020? Will Novak Djokovic win another Australian open? The answers to all of these in Part 2

Until then, happy hiring

Garry