Uniqlo Marketing

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However, in some cases such as in South Korea and Taiwan, Uniqlo sells its products within department stores (for example, Lotte and Uni-Hankyu department stores respectively. In this case, the department store acts as an intermediary (a retailer), and Uniqlo follows Case 2. In some countries where Uniqlo creates a joint venture with a retail company, such as with Wing Tai Retail Pte Ltd, this company acts as the retailer, and thus in this case it also follows Case 2. In addition, it used to sell on JD.com, in which this e-commerce website acted as a retailer, thus also falls under Case 2.

Uniqlo undergoes exclusive distribution of its good; as a producer, it only selects one intermediary (or none at all) to sell its products. This is seen as Uniqlo, under Fast Retailing, operates as a specialty-store/retailer of private-label apparel (SPA)[5], which means that they would produce their own clothing, while also selling it exclusively.

Worldwide, Uniqlo employs multichannel and dual-distribution marketing channel designs. Under its multichannel design, Uniqlo integrates both electronic (through internet stores) and physical outlets (through retail stores) in order for customers to participate in transactions. Its internet marketing channel includes both a website and a mobile app that are personalized to each country’s branches (as each country Uniqlo sells in has different promotions and products), which allows consumers worldwide to order online and have the products shipped to their desired address. Uniqlo also employs a dual-distribution marketing channel in several countries, in which they sell through both its own retail outlets (Uniqlo’s own stores or global flagship stores) as well as through department stores, such as in the case mentioned above.

3. The first strength of Uniqlo’s multichannel marketing design is that it is able to expand its reach of towards its target markets. Selling through both traditional brick-and-mortar outlets and online outlets (Uniqlo.com and previously JD.com) increases the visibility of Uniqlo’s products to its target markets as well as the feasibility to which they can purchase the products. For visibility, having an internet marketing channel means that consumers can browse through the product choices and promotions through their mobile devices or computers conveniently while not having to visit a physical store. Online shoppers can also subscribe to their mailing list, in which Uniqlo emails them when there are promotions, thus increasing visibility. In addition, campaigns through Uniqlo China’s internet marketing channels have increased its consumer base drastically.[6] For feasibility, consumers who do not have time to visit a physical store are able to order the products online, while they can still buy from its physical outlets if this option is personally deemed more convenient. In addition, the Uniqlo mobile app in China “allows consumers to check the availability of stock in its online stores, but also offline stores within the closest proximity to the user”.[7] This function provides mutual functionality between the online and physical outlets, which thus aids to expand Uniqlo’s consumer base. Secondly, another strength of Uniqlo’s multichannel approach is that additional platforms increase the effectiveness of its promotional campaigns. In addition to promotions (e.g. Great Singapore Sale discounts) which are usually advertised in Uniqlo’s physical stores, the internet platforms (e.g. website, mobile app, mailing list) are able to emphasize on these too, reinforcing the existence of these promotions towards customers and thus increasing the likelihood that they will shop from the promotion. Thirdly, another strength is that a multichannel approach will create both economies of scale and economies of scope[8] for Uniqlo. This is because directing the same marketing efforts into different platforms may spread marketing costs across these platforms, thus making marketing campaigns more cost-saving and effective. For example, Uniqlo can use the same set of marketing specialists to use their expertise towards both marketing channels, instead of hiring two sets of specialists, saving costs.

The first weakness of the multichannel marketing channel is that firstly, the different pricing policies between its internet and physical channels may differ, thus confusing consumers. Uniqlo’s website itself states, “we are unable to always guarantee the same prices will be available both online and in the stores”.[9] This may deter or delay consumers from purchasing as they may have to spend time to search for the cheaper option. Secondly, multichannel marketing is costlier for Uniqlo to maintain as opposed to a single channel, as it requires more staff overall, especially to coordinate the promotions between one channel and the other.

An improvement Uniqlo could make to its multichannel marketing channel is to capitalize more on cross-channel promotions to improve the mutual functionality between the two channels. For example, online shoppers could be offered a discount if they picked up the items they have ordered at a physical store. This is beneficial as by incentivizing online shoppers to visit the actual outlet (to pick up their order), he or she may impulse buy additional products from that outlet, thus increasing that outlet’s sale volume. An opposite example could also be employed, in which during checkout at a physical store, the consumer may be given a promotion code for online purchase, thus persuading them to try out a new channel (internet). In this case, they may realize, this alternative channel might be more convenient for them. Thus, this physical shopper may end up purchasing more products online as a result of this promotion. Both promotion ideas mentioned are examples of how cross-channel marketing can increase the traffic of the other channel.

For Uniqlo’s indirect channels (e.g. with department stores), a strength is that having intermediaries helps Uniqlo lower overall costs expanding into new areas, as the retailer will incur most of the costs of setting up and running the outlet. In addition, retailers such as department stores help with transactional functions, e.g. selling and promoting its products, thus Uniqlo is able to reach more of the population in a shorter amount of time. However, a weakness of the indirect channel design is that there may be potential conflicts between Uniqlo and their intermediaries.

In comparison, Uniqlo’s direct channels (e.g. in Japan) has many strengths, particularly as it allows them to be a low-cost, high-quality producer. The first strength of its direct channel is that all control is under Uniqlo, thus creating consistency in its top-down approach. The image it wants to portray is consistent and easily