As I write this, I am completely naked.

Naked, that is, except for items from Uniqlo – underwear, socks, t-shirt, trousers and a fleece. Everything is in an inoffensive anonymous style that will never go out of fashion and I will get bored with before it wears out. However, since the whole ensemble cost me less than $100, I can live with that.

Uniqlo is Japan’s #1 retailer and well on the way to being the global #1. Uniqlo’s CEO, Tadashi Yanai, is Japan’s richest person and in the top 100 worldwide. Walk anywhere in Japan and it seems pretty much everyone is wearing something from Uniqlo. They are today what M&S were in the UK back in the 1970’s. They have achieved all of this by following a rather different path from most fashion retailers.

For a start they are not really a fashion retailer, but a clothing retailer. Their clothing lines tend to be highly anonymous. This helps in two ways. First, the lines can stay in store for a long time, much longer than their fashion conscious competitors. Second, it’s not an issue if you bump into someone wearing the same black fleece since they are so indistinctive – there is not – “oh, that’s too common” effect. This means they can grow to high market penetration.

Historically clothing has been a high gross margin (on any individual item sold), low net profit business based around rapidly changing fashions (but most of which end in the half price bin end of season). Uniqlo have redefined their business around a low gross margin, high net profit business.

A lot of this is a function of more general trends. Fifty years ago, clothing was a primary way to express individuality. Today, with social networks, and an explosion of lifestyle hobbies, there are more ways than hours in the day to do this. Fashion is a smaller part of the world than it once was. Mark Zuckerberg wears the same grey t-shirt every day. Clothes no longer maketh the man.

photolib_uqginza_06l

Action: Don’t take an established market definition for granted. Rethink what people really want. Look to where the market is going, not where it’s been.

Uniqlo stores are very distinctive in a number of ways:

The interior is completely white (actually a touch off-white to be easier on the eye), and very well lit. In comparison a typical competitor may leave the ceiling un-panelled and might have only 1/2 or 2/3 the lighting.

The clothes are densely packed. Typically stacked on shelves rather than hangers. With a preference for bright colors, it looks what we might technically term as yummy. Again, competitors prefer hangers as it takes less work. Uniqlo staff apparently spend up to 70% of their time folding clothes back onto the shelves. They fit more clothes and more staff into the same real estate. They also fit more customers.

Action: Presentation counts. Think Apple. Design is the highest ROI you can leverage. Today, B2B applications are still playing catchup with the level of UI provided by consumer apps.

Uniqlo stores can’t be separated from their products. Everything else is stripped away to place the product front and center. It’s a bit like the Apple web site – imagine what that would look like if they removed all the product pictures – there wouldn’t be anything left!

Uniqlo’s clothing lines are created by the same design team and use the same color palette. At any one time, there are maybe 50 or so colors in use. This means when looking around the store, it looks good (Design 101 – restrict and control your palette). This also makes it easier to coordinate when the piping on your jacket matches the color of your polo shirt.

They sell everything from casual to formal, and don’t shut down the winter line at the end of autumn – people actually do buy winter clothes in winter – not everyone plans ahead. Uniqlo have made it the easiest place to buy a complete wardrobe from one place.

Action: Think of the overall solution from the customer’s standpoint. Can they get everything they need from you? Simplifying their buying process will maximise your revenue.

Uniqlo have invested heavily in IT and their supply chain. Because of this, they can create new fabrics which address both the need for warmth in winter as well as the need to keep dry in Japan’s hot and humid summers. You look a lot better dry in a $10 Uniqlo polo than sweating in a $100 Lacoste shirt.

Because they keep their fashions anonymous, they keep their lines longer, and support a broader range of colors. They’ve figured out that color is actually a bigger differentiator than style most of the time, especially for staples. This helps them mass-produce and keep prices low. By dealing direct with suppliers, they can control the product and look not at shirts, jackets, socks etc, but instead look at their summer line as a coherent whole. They employ designers, not buyers.

Action: The product is not just the product – it’s how you make that product too that creates your differentiation.

People have long spoken about the consumerization of B2B software, but there is a broader principle at work here. B2C often pioneer best practice quicker than B2B with their faster pace, and are worth studying for innovative marketing ideas.