He then opened a new store called Unique Clothing Warehouse in 1984, which was later shortened to Uniqlo as a mistake between the letters “c” and “q” of trademark registration in 1988..
Overview of the enterprise
The history of formation and development
UNIQLO's predecessor was a small clothing store called "Ogori Shoji" in Ube City, Yamaguchi Prefecture which is famous for its mining industry Therefore, Ogori Shoji was initially founded as a textiles manufacturer which specialized in providing suitable clothes for the workers of industrial zones As the store's business continued to thrive, the Yanai family opened other branches
The business was so successful that the Yanai family established Ogori Shoji Co., Ltd in the spring of 1963 which had continuous growth for 20 years
In 1972, Tadashi Yanai inherited his father's menswear chain He then opened a new store called Unique Clothing Warehouse in 1984, which was later shortened to Uniqlo as a mistake between the letters “c” and “q” of trademark registration in 1988
In 1994, Uniqlo was officially listed on the Hiroshima Stock Exchange Now it is a global brand with over 1000 stores around the world
Picture 1.1 Logo of Uniqlo over time
When it comes to the recent logo, this detail is assessed that Uniqlo wants to imply that the brand has been globalized, but still has a strong national identity.
Vision and Mission
The announcement of the Uniqlo fashion brand encapsulates a clear vision: "Uniqlo is a modern Japanese company that inspires the world in the everyday clothing segment" The brand's strategy, instead of following fast fashion trends like other competitors, focuses on brand philosophy which is to create durable, easy-to-wear and affordable clothing for everyone
Three pillars underpin the business: People, Planet and Society
Uniqlo employs thousands of people around the world and aims to foster diverse workplace environments and opportunities for all people to excel, regardless of their background (such as race, gender, religion, ethnicity, social status, sexual orientation or age)
Uniqlo’s LifeWear concept offers simple, exceptional, and affordable clothes filled with attention to detail and tailored to each person’s lifestyle To ensure that everyone’s lives around the world are enriched by their clothes, Uniqlo are committed to all aspects of our products - from the function and quality to the type of materials and how they are made Great clothing can enhance the lives of people everywhere In addition to making great clothes and providing excellent service, Uniqlo gives back to communities at the local and international level
Six material issues are related to sustainability efforts which are implementing as part of business strategy:
● Create New Value through Products and Services
● Respect Human Rights in Our Supply Chain
Uniqlo has adopted a new sustainability mission statement “Unlocking the Power of Clothing" Good clothing means simple clothing, high in quality, and built to last Their clothes are simple and essential yet universal, so people can freely combine them with their own unique styles, in any way they choose, every day of the year With a focus on products, supply chain, employees, stores and communities, Uniqlo is aiming to change the world for the better through their business This is their promise: to always work toward a better, more sustainable society.
Business model and Revenue model
Picture 1.2 Uniqlo business canvas model
The potential customers of UNIQLO are all genders and all ages, who live in urban and suburban, with medium and above wallet Uniqlo's target market, divided into 3 groups: Men, women and kids, towards those who care for trendy, casual and comfortable clothes
Uniqlo’s value proposition is comfortable shopping, low price and high quality and function They focus on developing strategic products: AIRism, HeatTech, LifeWear, etc which satisfy basic demand of wearing things like light, cool, soft, breathable, sweat- absorbent, or heat retention
Through Re.Uniqlo, Uniqlo is uniting with customers in a drive to become a brand that is better for the environment and communities alike In the process, waste, carbon dioxide emissions, and resource consumption are reduced throughout product life cycles
Uniqlo has no factories All of the products are processed and manufactured at factories located in other countries: China, Vietnam, Indonesia, Bangladesh… The purpose of Uniqlo is to hold the core part of the product, which is design, fabric materials, garment accessories, machines They make use of skilled human resources, low cost in places to benefit customers with high-quality products at a reasonable price
Uniqlo sets up its own warehouse department to proactively maintain optimal inventory levels in each country
Uniqlo distributes its products directly by building a chain of stores and websites for each country or through major e-commerce platforms like Amazon Uniqlo's distribution
NHÓM-7- Phuclong - Hope it helps
Chuyền đổi số 100% (1)18 strategy focuses on the moment the product is on the shelf, with meeting the existing needs of consumers as the goal
On account of customer-centric strategy, Uniqlo has established Customer Service Centers for rapid response of customers’ feedback which then is used in product development The Uniqlo updated website highlights products improved in response to customer feedback, including details of what improvements were made and why Also, Uniqlo often has special offers to grate on old customers as well as attract new ones
Uniqlo's main source of profit is mainly from international branches The best-selling product of Uniqlo is items of HeatTech as well as the profit of women’ and men’s clothing outweigh that of baby and kids
Picture 1.5 Uniqlo’s result summary to May 2023
Uniqlo makes an impression with a strong brand name when pursuing this new, internationally unique category of clothes, called LifeWear, striving to provide both the highest quality and a price that is affordable for all
In addition, in order to build a consistent customer experience in all parts of the world, Uniqlo has invested a lot in human resources In Tokyo,Uniqlo university is constructed with the dream of training 1500 new store managers every year Not only focusing on training, this brand also always shows respect and compliance with employees' rights
Uniqlo branches worldwide are also key resources for the brand's growth as they get access to all audiences in the world
Uniqlo has a very clear philosophy in the production "developing its products of exceptionally high quality" Instead of following fashion trends, Uniqlo focuses on research and development to constantly improve products, so that their customers always have the best products Uniqlo's innovation projects include HeatTech, AIRism and Lifewear, but HeatTech is the most famous of them all Uniqlo is constantly improving on its technology for innovative new fabrics
Uniqlo has a great sense of contributing practical values to society and the community as they encourage customers to collect their old Uniqlo products and take them to any Uniqlo store for recycling These items are collected and then redistributed to refugees and others in need around the world Since 2007, Uniqlo has partnered with the United Nations High Commissioner for Refugees (UNHCR) to deliver more than 20.3 million suits to refugees They focus on social media which is accessible to customers such as Facebook, X for those in the UK and the USA, Renren for those in China
Customer satisfaction is one of the key activities that Uniqlo cares for as they follow the customer-centric approach
Toray Industry is a long-lasting partner with Uniqlo which attained big achievement: the subsequent development of Heattech The partnership has expanded to include a range of other materials, including the light and silky AIRism innerwear fabric, ultra-light down jackets, and, most recently, the highly functional yet environmentally friendly Dry-Ex
In Vietnam, Uniqlo has cooperated with many famous artists such as Vu Anh Tuan, Garden of Illustration, Tohe to launch 3 collections of UTme motifs!
Uniqlo makes collaborations with famous athletes and designers Throughout the brand development journey, UNIQLO has many cooperation projects with many different brand ambassadors The company worked with the world's top athletes who represent strong, resilient personalities and inspire positive optimism such as tennis champion Roger Federer, legendary golfer Adam Scott etc Collaboration with athletes who are often associated with high-end sport brands Uniqlo also collaborates with other brands such as Disney, Lego, etc
Uniqlo’s cost structure is divided into these parts:
Business operation overview
Research & Development (Designers/Pattern Makers)
An important part of R&D at UNIQLO is developing products that respond to customer requests, while also identifying emerging needs Accordingly, Uniqlo R&D centers constantly incorporate customer opinion while researching global fashion trends and new materials
One year before a product's intended launch, the R&D department holds a concept meeting with a diverse range of representatives from the merchandising, marketing and materials development teams to determine the right design concept for each season Their designers then begin the process of preparing designs and refining samples Even after a design is decided, its color and silhouette can be refined multiple times before it is truly finalized
The merchandising team plays a vital role in the product creation process, from product planning through production Deciding product lineups and volumes through the year is an important aspect of the department's job To do this, merchandisers communicate closely with R&D, the production department, and other divisions to determine the designs and materials required for each season's products They also manage the launches of our strategic products in close cooperation with other key departments
Development and Procurement of Materials
Uniqlo can secure stable, high-volume supplies of top-quality materials at low cost by negotiating directly with materials manufacturers worldwide Utilizing their economies of scale enables us to achieve more favorable terms than any other manufacturer The materials used for their core items are particularly important Uniqlo’s in-depth research and experimentation generates improvements in the functionality, feel, silhouette, and texture of our clothes
Uniqlo assigns production department members, who manage product quality and production progress, and Takumi (skilled artisans) to production offices in Shanghai, Ho Chi Minh City, Dhaka, Jakarta, and Bengaluru (formerly Bangalore) Production office representatives visit factories weekly to resolve any issues The production department swiftly addresses any quality concerns raised by customers and implements improvements if required
The inventory control team works to improve management efficiency by supplying inventory that reflects the sales capabilities and product sales of each individual store The team monitors weekly sales and stock at each store and dispatches inventory to fulfill orders and maintain appropriate inventory levels At the end of each season, merchandisers and the marketing department coordinate sales promotions and help reduce residual inventory
Each season, Uniqlo conducts promotional campaigns for core products such as HeatTech, Ultra Light Down, AIRism, and Bra Tops During the campaigns, Uniqlo advertises the products' unique qualities and features through TV commercials and online ads In Japan, Uniqlo uses apps, email, social media, and flyers delivered with newspapers to notify customers about limited-period discounts, typically of 20-30%, on new seasonal ranges.
Analysis of the enterprise
SWOT Analysis
Certainly, here's a SWOT analysis (Strengths, Weaknesses, Opportunities, Threats) for UNIQLO, a global clothing retailer known for its affordable and trendy apparel:
- Possess a clear and strategic vision:
+ Uniqlo's strategic vision and style are very clear, this is the foundation for the company to build the success of Uniqlo's marketing strategy The company has a very clear philosophy in the production of its products "developing its products of exceptionally high quality" Uniqlo is focused on making the 'life-enhancing' basic wearable for everyone With a commitment to low prices and good fabric quality, Uniqlo clothing is mass-produced and focused on the most
"basic" apparel that everyone needs Unlike direct competitors, whose brands regularly conduct market research to discover the latest trends and imitate them, Uniqlo does not “We don't follow trends People often mistakenly say that Uniqlo is a fast fashion brand But no, we make clothes for everyone,” said Uniqlo CEO Tadashi
+ UNIQLO's focus on providing functional and high-quality basics, combined with its ability to cater to a broad range of customer needs and preferences, allows the brand to target a diverse market segment that spans across age groups, lifestyles, and geographical locations Currently Uniqlo's target market is both men and women, between the ages of 18-40 The brand targets people who are trying to find clothes that are trendy, casual and comfortable Uniqlo clothing is not just limited to the rich The excellent quality and reasonable price show the strong consumer appeal of the brand This strategy has enabled the brand to expand its target market as all consumers are trying to find high quality clothing at affordable prices Uniqlo also targets the working class, middle and upper class by psychological segment to expand its business
- Global Brand Recognition: UNIQLO has established itself as a recognizable and respected brand in the fashion industry, with a strong presence in various countries UNIQLO's global brand recognition is evidenced by various factors that showcase its widespread popularity and influence in the fashion industry
+ International Presence: UNIQLO has a significant presence in numerous countries across the globe It operates thousands of stores in various regions, including Asia, Europe, North America, and Australia The sheer number of physical stores indicates the brand's reach and its ability to cater to diverse markets
+ High Customer Awareness: UNIQLO's name is widely recognized by consumers worldwide Many people, even those who may not shop at UNIQLO, are familiar with the brand's name and logo due to its consistent and impactful marketing efforts
+ Social Media Following: UNIQLO boasts a substantial following on social media platforms like Instagram, Facebook, Twitter, and YouTube These platforms allow the brand to engage with millions of followers, share its products, promotions, and brand values, and connect with a global audience
+ Media Coverage: UNIQLO frequently appears in international media outlets, fashion magazines, and online publications This media coverage highlights the brand's designs, innovations, and business strategies, further solidifying its status as a global player + Cultural Impact: UNIQLO's influence extends beyond retail, as it often participates in and sponsors cultural events, art exhibitions, and community initiatives Uniqlo also sponsors world-class athletes as part of its Global Ambassador Program In Uniqlo's Marketing strategy, the brand has targeted famous athletes around the world, in order to expand certain global coverage through Influencers who can convey the true meaning of Uniqlo's brand This involvement helps the brand connect with different cultures and communities, contributing to its global recognition
+ Consumer Demand and Sales: The consistently high demand for UNIQLO products across various markets demonstrates its global appeal The brand's ability to generate strong sales in diverse regions underscores its recognition and popularity among consumers worldwide + Global Marketing Campaigns: UNIQLO's marketing campaigns are often designed with a global audience in mind Its advertisements and promotional materials are often translated into multiple languages, showcasing the brand's commitment to reaching and engaging with customers from different backgrounds For example, Since 2007, Uniqlo has partnered with the United Nations High Commissioner for Refugees (UNHCR) to give more than 20.3 million suits of clothing to refugees
+ Global Trendsetter: UNIQLO's innovative fabric technologies, such as HEATTECH and AIRism, have gained international recognition and set trends in the apparel industry These innovations contribute to the brand's reputation as a global leader in functional and stylish clothing
+ Market Share and Competitor Analysis: UNIQLO constantly competes with other global fashion giants and maintains a significant market share Its ability to hold its own against fierce competitors attests to its strong brand recognition and customer loyalty
- Innovative Products: UNIQLO is known for its innovation in fabric technology and design, producing high-quality and functional clothing items Yanai has been constantly driving innovation at Uniqlo, and innovation is present in every part of the Company from cutting- edge technology in fabrics to extremely lean operations The HeatTech product line is a prime example of the innovation behind everything Uniqlo does HeatTech is described on Uniqlo's website as "a fabric that has a competitive advantage because of its ability to absorb body heat and store it in air pockets deep within the fabric to help keep the wearer warm” This fabric was researched and developed by Uniqlo in collaboration with a materials science company HeatTech's fabric is thin, creating a comfortable feeling for the wearer This special fabric makes it possible for designers to create a variety of elegant clothing styles that are different from the usual standard of warm clothes HeatTech technology continues to be improved over time with new fiber technology In 2003, 1.5 million HeatTech products were sold worldwide and this number has grown to over 130 million products by 2012 HeatTech is just one of Uniqlo's breakthrough products outside of the United States alongside other products such as AIRism (a stretchy fabric) and Lifewear (a mix of sportswear and casual wear)
- Sustainability factor and diverse Product Range: UNIQLO is renowned for its sustainable, diverse product range, offering a wide variety of clothing items for men, women, and children This broad and inclusive selection caters to different styles, preferences, and occasions, making UNIQLO a go-to destination for a wide range of consumers
+ Although Uniqlo produces far fewer designs than its competitors, it is able to create sustainable apparel, which is a hallmark of the brand
Number of products available from 3 fashion brands
+ Along with that is the variety of sizes and colors available in stores
- Supply Chain Efficiency: UNIQLO's vertically integrated supply chain contributes to efficient operations and cost control UNIQLO's supply chain efficiency is a key factor contributing to its success in the fast-fashion retail industry The company's ability to manage its supply chain effectively has enabled it to deliver high-quality products to a global market while maintaining competitive prices
+ Vertical Integration: UNIQLO is known for its strong vertical integration, which means the company is involved in various stages of the supply chain, from design and manufacturing to distribution and retail This integration allows UNIQLO to have greater control over its production processes, ensuring quality and minimizing delays
Competitive Analysis
Fast Retailing is a famous retail group in Japan with many different fashion brands From Theory a workwear brand for newcomers, to J Brand a premium denim brand – –Among those fashion brands, however, Uniqlo is Fast Retailing's largest and most popular globally This company is known for its good quality and trendy In fact, their material innovations such as Airism and Heattech technology have set new standards in the fashion industry
At the same time, Uniqlo has become an exciting collaboration machine with designers, celebrities, artists and licensed brands In 2020 alone, they have launched collections featuring JW Anderson, Marimekko, Jil Sander, Basquiat, Billie Eilish and several other celebrities
But of course, Uniqlo has more competitors than ever before Many of them also offer high quality items at affordable prices
So what are UNIQLO's competitors in the same industry? And how is their strategy different from UNIQLO? We will learn and discuss in the section below
Fierce competitors in the fast fashion sector include Zara, H&M, GAP, Forever21, etc
Now we will analyze SWOT of UNIQLO’s competitors:
BRAND STRENGTHS WEAKNESS OPPORTUNITIES THREATS
-Attract a large number of buyers
- Not specialize in any one thing
- Prevalence of E- commerce worldwide -Growing Vietnam market potentially
- Low advertising -War of price
GAP - A strong portfolio of distinct brands across multiple channels
- Increasing the efficiency of online sales
- Further decline of sales and profits
- Global presence of the brand
- Presence of timeless iconic products
- Strategic supplier relationships sales channels efficiently
- International market expansion focusing on Asia
- Risks related to global sourcing and manufacturing
- Inability of the management to turn around the business
Applications of UNIQLO
*RFID IN LOGISTICS & SUPPLY MANAGING:
Four years ago in February 2017, Uniqlo opened a 200,000 square meter headquarters in Tokyo This project aims to promote a new strategy to transform the business model from
“Sell what we produce” to “Produce only what we can sell” According to Tadashi Yanai, CEO of Uniqlo: “The strategy represents a shift from ‘Made for All’ to ‘Made for You’ through digital integration of planning, production and sales.” He came up with an ambitious plan called the Ariake Project Aim to revolutionize the entire supply chain; Applying the most modern technologies to the supply chain operating model; Help collect data faster and produce products of the highest standards The new headquarters is designed to promote integration by placing 1,000 employees from different departments into the same workspace All planning, marketing, production and logistics departments on the same floor and connect them through a common digital platform As a result, the collection and processing of information between departments is many times faster than before; helps to control the logistics process more tightly Until the new headquarters opened, it took Uniqlo 6 -12 months to decide on the design, procurement of materials, product manufacturing and delivery to its retail stores This, in turn, leads to a mismatch between customer needs and products, resulting in lost sales opportunities and excess inventory But then the company started putting RFID tags on all products and connecting RFID data to a digital platform With this new system, Uniqlo's goal is to provide an accurate forecast of daily sales at each retail store, and to plan and manufacture its products in real time
- Improved Inventory Accuracy: RFID enables real-time tracking of products throughout the supply chain, leading to better visibility and accuracy in inventory management UNIQLO can reduce instances of stockouts and overstock situations
- Enhanced Traceability: RFID tags allow for detailed product traceability, helping UNIQLO monitor the movement of goods from production to distribution, ensuring compliance with regulations, and facilitating recalls if necessary
- Efficient Warehouse Operations: RFID technology speeds up the process of receiving, sorting, and locating items within warehouses, leading to increased operational efficiency and reduced labor costs
- Quick and Accurate Audits: RFID enables faster and more accurate inventory audits, eliminating the need for manual counts and reducing downtime during audits
- Demand Forecasting: Real-time data from RFID tracking can provide insights into consumer behavior and demand patterns, allowing UNIQLO to optimize its supply chain and production planning
- Reduced Shrinkage and Theft: RFID helps prevent theft and unauthorized removal of items, contributing to decreased shrinkage and losses in the supply chain
- Omni-channel Integration: RFID technology can facilitate seamless integration between online and offline sales channels, enabling better inventory visibility and order fulfillment
- Faster Replenishment: UNIQLO can use RFID data to identify low-stock items quickly and initiate replenishment processes promptly, reducing the chances of out-of-stock scenarios
- Implementation Costs: Integrating RFID technology into existing systems requires significant upfront investment in hardware, software, and employee training
- Complexity: Implementing RFID across the supply chain can be complex and may require changes to existing processes and workflows
- Privacy Concerns: RFID tags can raise privacy concerns if customer data is collected and stored without proper consent or security measures
- Data Management: The massive amount of data generated by RFID systems requires robust data management and analytics capabilities to derive actionable insights effectively
- Interference and Read Errors: RF interference and read errors can occur, leading to inaccuracies in tracking and potentially disrupting supply chain operations
- Change Management: Employees may require time and training to adapt to the new technology and processes, leading to temporary disruptions during the transition
- Maintenance and Upkeep: RFID hardware and software require regular maintenance and updates to ensure smooth operations
- Lack of Human Judgment: RFID lacks human judgment capabilities and may not be suitable for tasks that require complex decision-making or subjective evaluations
For UNIQLO, implementing RFID technology in logistics and supply chain management can offer substantial benefits in terms of improved efficiency, accuracy, and visibility However, careful planning, investment, and addressing potential challenges are essential to successfully leverage these advantages
On November 13, 2019, Fast Retailing, the parent company of Uniqlo, said that the company had signed global strategic cooperation agreements with two robot development startups Mujin (Japan) and Exotec Solutions (France) According to Mr Tadashi Yanai, CEO of Fast Retailing, with these agreements, Fast Retailing aims to fully automate the work in Uniqlo's warehouse system within the next 3-5 years This is the latest step in a 100 billion yen ($917 million) supply chain overhaul project announced last year by Fast Retailing Now, Uniqlo has taken a big step towards that goal In October, Uniqlo announced a partnership with material handling equipment maker Daifuku to help automate jobs at Uniqlo's giant warehouse in Tokyo's Ariake district Since then, the number of employees working in this warehouse has decreased by 90% In addition, thanks to robotic transportation, this warehouse can operate 24 hours a day Daifuku's robotic system is designed to transport clothing products loaded by trucks to Uniqlo's warehouse This system will read the labels attached to the products to confirm the stock number and other information The system then packs the products and places them in cartons and onto a conveyor belt that runs to storage
- Increased Efficiency: RPA can automate repetitive and manual tasks, leading to improved process efficiency and reduced human error This allows employees to focus on more strategic and value-added activities
- Cost Savings: RPA can lead to significant cost savings by streamlining processes and reducing the need for manual labor It can also result in faster task execution, leading to higher productivity
- Enhanced Accuracy: RPA systems perform tasks with high accuracy and consistency, minimizing the risk of errors in data entry, calculations, and other routine activities
- 24/7 Operations: RPA bots can work around the clock without breaks, enabling continuous and non-stop processing of tasks, which is particularly useful for processes that require constant monitoring
- Scalability: RPA can be easily scaled up or down based on business needs, allowing UNIQLO to adapt quickly to changing workloads and demands
- Faster Processing: RPA can complete tasks at a much faster pace compared to manual processing, leading to quicker turnaround times for various operational activities
- Data Integration: RPA can integrate data from multiple sources and systems, enabling seamless data exchange and improved decision-making
- Regulatory Compliance: RPA can ensure that tasks are performed consistently according to defined rules and regulations, reducing compliance risks
- Initial Investment: Implementing RPA requires an initial investment in technology, software licenses, infrastructure, and training
- Complex Implementation: Integrating RPA into existing processes can be complex and time- consuming, requiring thorough planning and coordination
- Change Management: Employees may resist or require training to adapt to the new technology, leading to potential resistance and disruption during the transition
- Limited Cognitive Abilities: RPA is designed for rule-based tasks and lacks cognitive abilities to handle complex decision-making or tasks that require human judgment
- Process Standardization: RPA works best with standardized and well-defined processes Complex, non-standardized processes may be challenging to automate effectively
- Maintenance and Upkeep: RPA systems require regular maintenance, updates, and monitoring to ensure proper functioning and avoid technical issues
- Security Concerns: RPA introduces new cybersecurity risks, including potential vulnerabilities in automated processes and access controls
- Dependency on Technology: UNIQLO becomes dependent on the proper functioning of RPA technology Any technical issues can disrupt operations if not managed promptly
For UNIQLO, implementing RPA can offer numerous benefits in terms of increased efficiency, cost savings, and accuracy However, careful planning, employee training, and addressing potential challenges are crucial to ensure a successful integration and maximize the advantages of RPA
Uniqlo's new shopping application launched on November 5, 2021 brings many valuable utilities Now, shopping "believers" just need to stay at home and still freely buy beautiful things and enjoy many exclusive deals After 2 years of development, Uniqlo Vietnam's shopping application has set an "airtime" date, bringing a variety of attractive experience features to meet the needs of modern consumers With the Uniqlo online store, users can easily find and buy many satisfactory products and "extremely good" discount deals
- User-Friendly Interface: A well-designed and intuitive user interface enhances the user experience and makes navigation through the app easy for customers
- Mobile Shopping Convenience: The app allows customers to browse, shop, and make purchases from their smartphones, providing convenience and flexibility
- Product Variety: The app showcases UNIQLO's diverse range of clothing and accessories, allowing users to explore a wide selection of styles and options
- Exclusive Offers and Promotions: UNIQLO often provides app-exclusive deals, discounts, and early access to sales, incentivizing customers to engage with the app
- Personalized Recommendations: The app may offer personalized product recommendations based on users' browsing and purchase history, enhancing the shopping experience
- Easy Checkout: A streamlined and secure checkout process can simplify the purchase journey, reducing cart abandonment rates
- Order Tracking and History: Users can track their orders and view order history, helping them stay informed about their purchases
- Store Locator: The app may include a store locator feature that helps users find nearby UNIQLO physical stores
- Technical Issues: Like any app, UNIQLO's app may occasionally experience technical glitches, such as crashes, slow loading times, or compatibility issues with certain devices
- Limited Features: Depending on its development, the app might lack certain features that users find valuable, such as advanced search options, size recommendations, or virtual try-on tools
- User Reviews and Ratings: Negative reviews or low app ratings due to technical problems, user interface issues, or unsatisfactory experiences can discourage potential users
- Limited Availability: The app may only be available in certain regions or countries, limiting its accessibility to a global audience
- Privacy Concerns: Users may have concerns about data privacy and security when using the app to make purchases and share personal information
- Network Dependence: App functionality depends on a stable internet connection, which can be a limitation in areas with poor connectivity
- Resource Usage: Depending on its design, the app might consume significant device resources, including battery life and storage space
- Competition: The app competes with other fashion retailer apps, and its success depends on its ability to stand out and provide a superior user experience
Most retailers in the world today focus on selling online on websites, applications or e-commerce platforms Because once promoting the trend of online sales, in addition to selling goods, companies also know the shopping history of customers From there, they will analyze and know the customer's preferences and make appropriate recommendations for the next purchase Not standing in the same battle with other retailers, Japanese fashion giant Uniqlo chose for itself a separate direction: planning to apply technology to stores to solve the above problem
Specifically, Uniqlo uses artificial intelligence (AI) systems to improve inventory levels, making the connection between factories, distributors and retail stores faster and easier
By analyzing data in real time, AI will make recommendations so that the right products appear in stores at the right time In addition, the location of the clothes is also arranged in the right place, reasonably to attract customers And the product that is considered Uniqlo's biggest technological breakthrough at the moment is a kiosk containing an AI system called UMood, currently some Uniqlo stores have UMood Kiosks arranged It helps to measure the customer's reaction when choosing the color and style of the product, namely the T-shirt Then, make recommendations on suitable products for customers to choose from
- Improve customer experience when coming to UNIQLO
- Expand the scale and reach of users
- Installation and commissioning costs are a problem for UNIQLO
- Being a new product, it has not been widely used
Solutions/ Recommendations
The new digital transformation model export model is based on the successes of the old application and solves the drawn inadequacies In it, our main goal is to focus and promote
Now we will point out clearly each solution through solving drawbacks of those applications which are mentioned above a Security Countermeasures: Protect data and user information when using RFID
Besides the benefits in supply chain management and inventory control, when applying RFID in online sales, the buyer's data can also be leaked at any time And that is the main drawback that we will learn and find a solution to overcome
There are several methods being used as countermeasures to the security threats presented against RFID technology These methods can be categorized into two groups; non- cryptographic systems and cryptographic algorithms To diminish costs, non-cryptographic security countermeasures are deployed One of the easiest ways to safeguard consumer privacy is tag-killing (Shih, Lin, & Lin, 2005) This method kills the functionality of the RFID tag once it is at the point of sale The Kill command is built into the RFID tag and is executed once the RFID reader sends a code or PIN at the point of sale to make the tag unusable (Juels, Rivest, & Szydlo, 2003) Utilizing the tags read-writable memory is another popular non cryptographic security approach, which uses a secret and temporary ID code in the RFID tag’s RAM (semi active tags) and the tag’s serial ID number that is put in the ROM by the manufacturer The result is when the tag is in ROM mode object there is unrestricted object identification to whichever user that needs information and in RAM mode there is a restriction of object identification to limited users Cryptographic algorithms are more costly to implement but can provide better security and privacy, including Hash Based Access Control, Minimalist, Re-encryption scheme and universal re-encryption, and Advanced Semi-Randomized Access Control (A-SRAC) Hash Based Access Control uses hash- enabled tags that have a segment of memory set aside for a temporary metaID This allows the tag to function in a locked or unlocked status A hash algorithm is utilized to generate an indiscriminate key for the metaID, the reader checks the local database for the corresponding hash key to be sent to the tag, the tag receives the hash key and checks it against the metaID and if it corresponds, the tag unlocks and allows full data retrieval to the readers The Minimalist method uses a list of pseudonyms that is unique to the keys stored in the RFID tag The reader is validated after it has been authenticated by the tag and the tag is validated by the reader by sending an authentication key Once the validation process is complete, the RFID tag releases its data to the reader Then the reader renews the pseudonym and authentication keys in the tag Re-encryption and universal re-encryption systems use public key cryptographic methods and require more memory and server resources on the back end due to the type of algorithms being employed They can keep the tag identifier from being disclosed by utilizing the re-encryption system The A-SRAC algorithm employs minimal calculations and keeps the messaging size small The back end servers keep the old and new data from the tags, w The A-SRAC algorithm employs hash functionality, a random generator, and also utilizes metaID b Optimizing business operations
Besides the efficiency and advantages of the supply chain that UNIQLO is applying, there are still downsides somewhere Specifically, because the production process is too fast and too much, supply chain disruption is completely possible To overcome and limit this situation, UNIQLO should take measures to optimize and simplify the production process
In particular, UNIQLO should use RPA more widely to help improve process efficiency and reduce human error It's a way to limit disruptions in the supply chain
For example, RPA can be applied in the management of materials and production, this is a stage that requires high accuracy, so if you assign this work to RPA, the case of errors will be minimized, thereby helping for the next steps, the next process can go smoother
In implementation, we will follow these steps to optimize business operations through RPA:
To implement RPA in the enterprise, there are the following key steps:
Step 1: Analyze business processes and look for automations This is an important step in determining the appropriate processes for RPA implementation
Step 2: Identify technical needs After defining the business process, the business needs to determine the appropriate technical and technology requirements for implementation
Step 3: Select solution: After determining the technical requirements, enterprises need to choose the appropriate solution to deploy There are many different RPA solutions on the market, so businesses need to choose the right solution for their technical requirements and size
Step 4: Deploy and test After choosing an RPA solution, businesses need to deploy the solution and test to ensure that business processes have been automated correctly and efficiently
Step 5: Train employees After implementing the RPA solution, businesses need to train employees to use and manage the RPA solution This ensures that the RPA solution is used efficiently and meets your business requirements
Step 6: Evaluate and improve After implementing the RPA solution, the enterprise needs to evaluate and improve to ensure that the RPA solution meets the business requirements of the enterprise and brings economic efficiency
At inventory control and freight, UNIQLO should use RFID applications to increase productivity and accuracy in small jobs
At the stage of checking the quantity of inventory and shortage of goods, RFID is an important factor to reduce manpower instead of machines to limit errors in quantity
In the operation stage, UNIQLO will reduce the labor time in locating items Thereby reducing interruptions in each working stage and optimizing profits and quality of the business c Transforming the business model
Uniqlo constructs a vertically-integrated supply chain system by unifying all stages of the supply chain, which helps ensure high-quality products at reasonable prices However, Uniqlo’s senior management focuses in Japan with only regional flagship stores in major cities in foreign far countries without other small/medium-sized retail outlets (duty-free stores) can hugely decrease the customers’ accessibility and improvement pace (Woo & Jin2014) Although flagship stores can increase brand awareness and sustain quality management, they will lose the advantage of the brand’s offline accessibility which belongs to duty-free stores at airports, tourist attractions, megamalls, etc (Woo & Jin 2014).Furthermore, flagship stores also increase the investment cost and logistics costs for delivering to the end customers.
In order to solve this limitation, UNIQLO should change the business model by combining online and offline sales as well as expanding the scope of sales in potential cities instead of just focusing on big cities
Encourage users to buy online by launching many promotions
Make the "UNIQLO app" more popular with customers with an easy-to-see interface and meet the needs of buyers: full display of price segments and products for buyers to choose
Use RPA in order management quickly without having to use manual labor From there, the scale of online sales will be greatly expanded and the productivity of businesses will also increase Here are the steps of RPA when making a sale
And here are the risks and drawbacks of manual closing
Also UNIQLO's business model can use "interactive fitting room" The interactive mirror system uses RFID technology and a touch screen integrated mirror to improve the shopping experience of customers in retail stores Customers can view images of their selected products, detailed information about these products, and receive product recommendations, thereby enhancing the customer experience
+ The customer chooses an item that he finds interesting
+ Customers enter the fitting room with the RFID interactive mirror, the system immediately reads and detects that product
+ The display of the RFID interactive mirror shows both the customer's reflection and the product's image, along with information such as available colors and sizes, ingredients, prices, and more Customers also receive tailored product and accessory recommendations + With the RFID interactive touchscreen, customers can browse other products, ask staff to bring in a product, and more
Implementation of the Digital Transformation Project at UNIQLO
The necessity of the project
The onset of the new digital era has formally arrived, and while the idea of digital transformation remains unfamiliar to many, it is poised to become a global norm in the not- so-distant future Embracing and accelerating the shift from conventional methods to digital strategies is imperative This offers an opening for those aiming to evolve and innovate, while simultaneously posing a challenge to prevent falling behind This transition goes beyond simple digital alterations in sales and delves deeper into scrutinizing the conversion process and suggesting viable approaches that UNIQLO can adopt to bolster operational efficiency, stimulate inventiveness and adaptability, activate personnel systems, and cultivate a contemporary operational atmosphere This entails reinforcing connectivity, sharing information, and fostering the generation of significant concepts for the company
The fashion sector isn't solely about adjusting sales channels; it also encompasses the integration of various technologies in the Industry 4.0 era to adapt to changing times The incorporation of digital applications in management and the assimilation of technological advancements in the fashion industry, like A.I, big data, and 3D printing, are becoming progressively prevalent and hold the potential to reshape the industry's future During its growth phase, UNIQLO is assessed not just as a fashion brand but as a tech enterprise as well The company consistently introduces technologically advanced service offerings that captivate customers, such as Umood Kiosk, RPF applications, RFID, and more, to carve out its unique identity However, these efforts alone might not suffice Addressing concerns related to supply chains, market receptiveness, and digital retail operations still demands comprehensive solutions Beyond the expansion of technological applications within stores, the business should optimize its existing technological potential further to develop shopping systems, expedite delivery speed, and meticulously select suppliers to ensure product quality Technology inherently offers a substantial competitive edge by anticipating forthcoming digital transformation trends and efficiently managing businesses in the contemporary era, enabling enterprises to excel even in traditional sectors This trend triggers significant shifts in the value chains of industries and global supply networks
Given the current context of the digital economy, traditional organizations, businesses, and models must undergo substantial adaptations to remain viable and realize growth As one of the early adopters of digital transformation in the fashion realm, UNIQLO must persist in advancing, refining, and overcoming prevailing limitations to uphold its pioneering position within the industry and achieve enduring expansion.
Detailed Project Implementation Plan
This process will be deployed particularly below
● Implementation Scope: All Uniqlo stores nationwide
● Implementation Participants: Entire Uniqlo leadership and staff
Stages Timeline Implementation steps Object
Enhancement (August to the end of September)
- Procure RFID tags, readers, and antennas Collaborate with RFID solution providers
- Begin tagging products with RFID during the manufacturing process
- Set up RFID readers and antennas at warehouses, distribution centers, and retail locations
- Test the RFID system in a controlled environment to ensure accuracy and data synchronization
Anti-Theft Integration (October to the end of November)
- RFID tags, readers, antennas, and installation costs
- IT team for system integration and maintenance
- Training for employees on how to work with RFID technology
- Integrate RFID data with inventory management and order fulfillment systems
- Implement RFID-enabled shelves and racks to automate tracking of inventory movement
- Install RFID-based anti-theft gates at store exits to enhance security
Enhancement (December to the of
- Develop and implement RFID- enabled interactive mirrors in fitting rooms
- Train store staff to utilize RFID technology for quick item location
(Febuary to the end of April) The first phase of UNIQLO's digital transformation focuses on implementing Robotic Process Automation (RPA) to streamline key business processes Over the course of three months, UNIQLO will assess core business processes, identify areas suitable for RPA, and assemble a cross- functional team The team will conduct technical assessments, select an appropriate RPA solution, and initiate the deployment of RPA bots in selected areas such as order processing and inventory management Continuous testing and optimization will be critical during this phase to ensure smooth RPA integration
Training (May to the end of July) Building on the foundation laid in Phase 1, the subsequent phase will involve expanding RPA
RPA implementation team including developers and analysts deployment to additional business processes As RPA bots are integrated into various operations, they will gradually increase efficiency and reduce human errors The importance of employee engagement cannot be overstated In Month 6, comprehensive training sessions will be conducted to familiarize employees with RPA usage and management Simultaneously, UNIQLO will provide ongoing support and develop user guides to address any queries or concerns
Enhancement and RPA Integration (Aufgust to the end of October)
In this phase, UNIQLO will focus on enhancing its online sales channels and further integrating RPA capabilities The company will launch targeted promotions to encourage online sales and app usage, thereby increasing customer engagement At the same time, the
"UNIQLO app" interface will undergo enhancements to improve its user-friendliness RPA will also be implemented in order management processes, expediting online order processing and improving overall efficiency
Digital transformation improves the management model
Build and refine the management model from organizational structure to manufacturing plants, supply chains, and retail management Apply digital transformation to the human resources and payroll management process, specifically by utilizing the Human Resources Information System (HRIS) and RFID technology
Human Resources Department, Finance Department
Apply technology to the production management process, inspecting goods through ID and barcodes
Utilize technology to optimize storage space for warehouse information
Implement Total Chain Management (TCM) technology in the supply chain management process
Apply RetailID technology for retail management and customer care
Implement the digital transformation structure of the business organization
Continuing to apply digital transformation to enhance store amenities, elevate customer experiences (such as electronic payments, smart fitting rooms, robotic packing, IoT management, the Uniqlo app, cloud computing, and big data) IT Department Building shared databases and information systems as core foundations
Implementing technology across different stages and tasks of the business (service management, product data management, enterprise human resource management, ERP, etc.)
Developing business data security policies
Integrating the management model with the business model
Establishing a business data security policy
Integrating new technologies into the previously implemented digital transformation systems to create a continuous interconnected system
Connecting the data of various systems to complete the innovation process.
Resource Estimation
To ensure the successful implementation of the digital transformation plan, UNIQLO will allocate resources strategically:
Budget Allocation: UNIQLO will allocate a significant portion of the budget towards acquiring the necessary RPA software and licenses, RFID technology for interactive fitting rooms, and AI technology partnerships for UMood Kiosk implementation Expertise: Investment will be made in hiring or training RPA developers and technical experts to oversee the integration of RPA and RFID technology Collaboration with AI tech companies will provide access to specialized expertise for the development of UMood Kiosk
Marketing Budget: A dedicated marketing budget will be set aside for launching online promotions, enhancing the "UNIQLO app," and driving customer engagement initiatives.
Contingencies
Contingency planning is crucial to address unforeseen challenges that may arise during the digital transformation process:
RPA Delays: Should RPA implementation face unexpected delays, UNIQLO will have a backup plan involving manual processes to ensure continuity and minimize disruptions to business operations
Technical Glitches: In the event of technical glitches with the RFID technology or RPA bots, a dedicated technical support team will be readily available to troubleshoot and resolve issues promptly
App Adoption: If the adoption of the "UNIQLO app" is slower than anticipated, UNIQLO will launch targeted campaigns with incentives to drive app usage and gather valuable user feedback
Risk Forecasting
Alongside the benefits and successes that a digital transformation project can bring, there are also risks and unwanted shortcomings that might occur Therefore, it's essential to conduct analysis, research, and predictions to be well-prepared Risk forecasting can be divided into three main areas as follows:
Uniqlo being a fashion business, the implementation of a digital transformation project will inevitably impact the company's business strategy
+ Customers: Changes in customer shopping habits Some customers may lean towards online shopping through the company's app for convenience, potentially resulting in a significant loss of revenue from direct retail
This leads to concerns such as maintaining cash flow, staff leasing costs, and efficiently utilizing applied technologies in stores
+ Competitors: Applying digital transformation to the business is no longer unfamiliar to major fashion companies worldwide, such as H&M, Zara, etc
+ Business Environment: Adopting digital transformation could bring changes to the business environment (both internally and externally) Hence, comprehensive research is required when making decisions
5.2 Operational Risks in Applying Digital Transformation
RFID technology offers various benefits to businesses, saving time and enhancing work efficiency Although relatively new, its potential is substantial, and it is predicted to become a powerful asset for companies in various fields in the near future As an integrated RFID system involves a computer network application, security threats are similar to those faced by computers and networks In general, apart from computer networks, security threats for RFID include:
+ First, data security threats within tags: Due to tag costs, the tags themselves may lack the capability to ensure safety Thus, they face a significant issue Unauthorized users could use legitimate readers or build their own readers to communicate directly with tags This way, data stored in the tag can be easily acquired For readable tags, there's also the risk of data forgery + Second, security threats on communication links: When the tag transmits data to a reader or the reader challenges the tag, its communication link is a wireless link, and the wireless signal is inherently open This provides convenience for unauthorized blocking Common deployment methods include:
1 Unauthorized hackers intercepting communication data Data is intercepted by an unauthorized reader, or the tag's information is eavesdropped on remotely due to the asymmetric forward and backward channels of RFID
2 Denial of service attacks, where unauthorized users block communication links by transmitting noise signals, causing the reader to be overwhelmed and unable to receive regular tag data
3 Impersonation tags are used to send data to the reader, so the reader processes all the counterfeit data, while the actual data is hidden
4 Destroying tags by emitting a specific electromagnetic wave
+ Third, security threats of reader protocols: There are three main aspects to the security threats of reader protocols Security issues that RFID faces are much more complex than conventional computer network security issues By analyzing the security threats of the RFID system, data that is unlawfully attacked can be stored in tags, readers, or when data is transmitted between components We must have appropriate coping measures
Additionally, a research paper by a European group of scientists warned that RFID tags are highly susceptible to virus contamination, which can modify the auxiliary database and cause serious chaos at airports and supermarkets Creating self-replicating RFID viruses requires just one infected RFID tag, similar to a biological attack, and discusses the possibility of attacking auxiliary databases in an RFID application scenario, then spreading to newly uninfected tags Therefore, enhancing safety measures to prevent the use of RFID tag data for attacking auxiliary systems is necessary Researchers also suggest that intermediate RFID software programmers should accept proper safety measures against RFID viruses, for example, filtering special characters, eliminating control-creating languages, limiting permissions for databases, and isolating intermediate RFID servers in the DMZ, so that the intermediate RFID part can avoid potential weaknesses from the Internet
Similar to RFID, RPA brings significant benefits to development, but the likelihood of meeting the company's expectations is not very high
Employee resistance to RPA: Provide thorough training, involve employees in the transition, and address concerns transparently to gain buy-in
5.2.3 Market response to new sales channels
Conduct in-depth market research and pilot tests in select locations before expanding to new outlets
5.2.4 Technical challenges with UMood Kiosk
Establish a technical support team and schedule regular maintenance to ensure the system's reliability.
Conclusion
Solution evaluating
In conclusion, UNIQLO, a renowned fashion retailer, has embarked on a transformative journey to enhance its operations, customer experiences, and business model through a series of innovative solutions The company recognized the need to evolve in the face of changing consumer preferences, technological advancements, and market dynamics From its inception as a Japanese clothing brand to its current status as a global fashion giant, UNIQLO has demonstrated adaptability and a commitment to innovation.
Solution controlling
UNIQLO's adoption of Radio Frequency Identification (RFID) technology has revolutionized its supply chain and inventory management practices This technology optimizes inventory accuracy, streamlines warehousing operations, and enables real-time tracking of products throughout the distribution network By effectively addressing security concerns, UNIQLO can ensure the privacy and protection of customer data while leveraging RFID's benefits
Robotic Process Automation (RPA) is another pivotal solution that UNIQLO has embraced to enhance efficiency and accuracy By automating repetitive tasks across various business functions, UNIQLO mitigates human errors, reduces operational costs, and paves the way for smoother supply chain operations However, a successful RPA implementation requires comprehensive planning, employee training, and strategic integration
The development of the UNIQLO app signifies the brand's commitment to seamless online-offline integration and personalized customer experiences Through user-friendly interfaces, exclusive offers, and personalized recommendations, the app serves as a conduit for connecting with consumers in a digital age
UNIQLO's strategy of transforming its business model by combining online and offline sales, expanding its market presence, and leveraging AI for market responsiveness demonstrates its forward-thinking approach By analyzing Big Data and leveraging AI algorithms, UNIQLO can anticipate customer demand, tailor its product offerings, and enhance the shopping experience Additionally, the implementation of interactive fitting rooms and the UMood Kiosk showcases UNIQLO's dedication to leveraging technology to engage customers and provide a unique shopping environment
In essence, UNIQLO's journey from being a traditional clothing retailer to an innovation-driven enterprise exemplifies its commitment to embracing technology and data- driven strategies By addressing challenges, optimizing operations, and enhancing customer experiences, UNIQLO is not only meeting the demands of today's discerning consumers but also shaping the future of fashion retail Through the integration of RFID, RPA, AI, and a customer-centric approach, UNIQLO is poised to continue its legacy as a global fashion leader while maintaining its core values of quality, accessibility, and innovation.
Group member peer evaluation form
Evaluation form
The link below is a evaluation form of Group 8 throughout our process doing the final essay: Evaluation form
Trello
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