Here's why the third-largest clothing chain thinks it can become Number One.
When you work in marketing, it’s hard to fight the temptation to regurgitate promotional spiel in an interview. So it was refreshing to connect with John Jay, president of global creative at Tokyo-listed Fast Retailing, the parent company of Japanese casual wear retail chain, Uniqlo. In an interview with Fortune, Jay, who is essentially the company’s marketing guru, was candid and occasionally critical about Uniqlo’s performance, positioning and plans for world domination in the fast-fashion clothing and apparel industry.
Founded in Hiroshima, Japan, in 1984, Uniqlo today counts more than 1,900 stores (47 in the U.S.) across 18 markets. Every week, there’s a Uniqlo store opening somewhere in the world. It’s the largest clothing chain in Asia, and the third-largest globally, with an eye on becoming number one. The brand’s global growth is paying off for its parent company: In an earnings report on Thursday, Fast Retailing announced that its operating profit hit a record high of 176.4 billion yen ($1.57 billion) for the year that ended in August, thanks in large part to a 95.4% increase in Uniqlo’s overseas earnings.
The Uniqlo chain is the brainchild of billionaire founder and CEO, Tadashi Yanai – a Time 100 nominee in 2013, and currently Japan’s second-richest person, with a net worth of $16.4 billion, according to Forbes.
Jay, a former creative director for Nike, shared the company’s four principles for building a global fashion brand.
1. Establish your “why”
Uniqlo (formerly the “Unique Clothing Warehouse”) sells fashionable, functional and technologically innovative clothes – called LifeWear – for men, women, children and babies. But more importantly, according to Jay, “Uniqlo was founded on being ‘democratic.’
“‘Made for all’ [Uniqlo’s slogan] is our philosophy. Our goal is to democratize all clothing by making it durable, accessible and affordable for everyone.”
Democracy extends beyond price point. Its founder’s business philosophy is underpinned by the belief that “an equal amount of work deserves an equal wage.” Yanai has proposed a universal pay system in which shop managers worldwide would receive the same salary (this is already in place for high-ranking Uniqlo executives).
2. Truth-telling trumps storytelling
The truth has universal appeal – what works in London will work in Los Angeles. So, hype and advertising “puff” play little or no part in Uniqlo’s global brand storytelling formula.
For instance, Uniqlo’s slogan, “Made for all,” isn’t just a token statement. The company’s philosophy of providing casual clothes that are made for all people (irrespective of age, gender, ethnicity, disability and other defining traits) is genuinely reflected in other parts of Uniqlo’s business, such as its selection of models, global brand ambassadors and so forth. The fashion brand’s sponsored athletes include Gordon Reid – the reigning Wimbledon wheelchair tennis champion and a Rio 2016 Paralympic Games gold medallist.
When it comes to brand-building, “Start with the truth,” Jay insists. “As a brand, ask, ‘Why do we exist? Why should anyone care? How do we contribute to the good of people and society?’ Then, you need creativity to tell your story with power, emotion and clarity.”
3. Be good, do good
“Brand trust can only come if you are consistent as a great product-maker and if your actions as a local and global citizen are trusted and admired,” Jay says.
Yanai subscribes to the same school of thought. While in his thirties, Yanai started writing what would eventually become 23 management principles, which he collectively terms the “soul” of Uniqlo. Foremost among these principles are fundamental tenets such as putting customers first and contributing to society.
Yanai has honed in on this latter principle, particularly in recent years. In August, the Asia Society – a New York City-based global non-profit – publicized the list of recipients of the Asia Game Changers award, which features the Uniqlo founder. According to the group, Yanai was made an awardee for “making philanthropy fashionable” by “building a global retail empire that gives back to local communities.” One example: In partnership with the United Nations High Commissioner for Refugees (UNHCR), Uniqlo Recycle has delivered 20.3 million clothing items to refugees, evacuees, victims of disaster, expectant and nursing mothers and others in need around the world since 2007.
4. Plan your location, location, location
Like property, Jay says, a brand’s global value is determined by the mantra “location, location, location.” With this principle in mind, Uniqlo wants its research and development (R&D) centers to strategically mirror the fashion capitals of the world – New York, London, Milan, Paris, Tokyo and the like.
Uniqlo City Tokyo: Global Innovation Center, which opened in March, serves as the central location for the company’s current and future creative R&D efforts, Jay says. But he notes that, “London has opened with a small team of researchers for Fast Retailing’s GU brand. This will eventually grow into a creative R&D lab for Uniqlo.”
Uniqlo’s fast-fashion future
In 2016, with a brand value of $7bn, Uniqlo ranked 91st on the Forbes list of the world’s most valuable brands.
“The fact that Uniqlo ranked 91 is evidence of how far we have to go…we have only just begun as a global brand,” Jay acknowledges. When reminded of the criticisms retail analysts level at Uniqlo – that it lacks online presence and has failed to adjust to non-Asian markets – Jay takes them on the chin. “This is absolutely true and [remedying these problems] is part of our digital strategy,” Jay says. “Our goal is to be a global digital retail company, and the launch of Uniqlo City Tokyo is the first step towards that objective.”
Uniqlo is the third-largest fashion retailer in the world – behind Swedish multinational H&M, and Zara’s parent company, Inditex, a Spanish multinational. Some retail analysts forecast that, if Uniqlo wins big in Asia – the world’s growth driver – it could become the number one fashion brand, even without becoming number one in the U.S.
But Jay is unequivocal about Uniqlo’s position: “That is not how we would like to achieve the number one position. We would be disappointed if we could not win the hearts and minds of the American people…Casual apparel is largely a Western/American invention, so we want to add to that legacy as a company born from Japanese culture and craftsmanship.
“Ultimately, we want to become number one not simply because we are bigger. We want to become number one because we are better.”