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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.
AGE a2 TEARS OUD OCCUPATION WHITE & BLUE COLLAR ADULTS
OCCUPATION UNDERGRADUATE & ABOVE GENDER MALE & FEMALE
GEOGRAPHIC LOCATION URBAN AREA GEOGRAPHIC LOCATION URBAN AREA
RACE & ETHNICITY ALL RACES RACE & ETHNICITY ALL RACES
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.Uniglo, 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 strategy focuses on the moment the product is on the shelf, with meeting the existing needs of consumers as the goal rT) UNIQLO Global Flagship
EE and Hotspot Stores JAPAN INTERNATIONAL
UNIQLO Japan Stores UNIQLO International Stores (FY2019 forecast) (FY2019 forecast)
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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
Performance by Group Operation (Billions of Yen)
Aug 2022 Nine months to May 2023 | Three months to May 2023
(Sep 2022 - May 2023) (Mar 2023 - May 2023) 3Q Actual Actual (yly) Actual | (yly)
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 1.3.9 Cost structure
Uniqlo’s cost structure is divided into these parts: e Employees salary
@ Marketing tools e@ Tax e Manufacturing e Shipping and storing
@ Research and development e Applying hightech
1.4 Business operation overview e 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 e Merchandising
Contingencies nh
Contingency planning is crucial to address unforeseen challenges that may arise during the digital transformation process: e 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 e 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 ố
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 70
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
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.