Uniqlo Wants to Make Fashion Personal: Is It Out to Disrupt the Industry, or to Redefine Itself?

You can feel the urgency every time Uniqlo talks about its philosophy and the changes it wants to make.

Before showing the 2016 autumn/winter collection to more than 100 journalists from 18 markets, Tadashi Yanai, chairman and CEO of Fast Retailing Co., Ltd. (Uniqlo's parent company), decided to say what he thinks about the apparel industry.

"I've been thinking about what the future of clothing looks like… Uniqlo may offer semi-customized products. In the past our clothes went from the factory to the store; in future they may go straight to the customer, as carefully designed goods. The apparel industry still overproduces, but it is still a promising industry… If we want to change the way we talk to customers, we have to change this industry first."

Then the remarks ended. The questions that followed were about the challenges Uniqlo faces, its internationalization strategy, and so on. No one picked up "semi-customization." Even when the conversation later turned to the Ariake Project, no one asked what this so-called future of the apparel industry had to do with what Yanai had just said.

The Ariake Project is a 36,000-square-meter distribution center that Uniqlo opened in October 2015 near the venues for the 2020 Tokyo Olympics. The stated purpose at the time was to close the experience gap between stores and online shopping: if a customer tries something on and the store is out of stock, she can order it online right there, and the item may be waiting when she gets home.

A Uniqlo manager confirmed to QDaily that the Ariake Project includes the semi-customization Yanai mentioned: Uniqlo supplies a set of basic templates, consumers do their own combining and personalizing, place the order, and the order ships directly to them.

Something may really be shifting in the apparel business. Two months before Uniqlo floated semi-customization, Nike had announced a new Nike+ app that let customers pre-order products. Nike CEO Mark Parker said at the time: "Over the next ten years, the innovation this industry is most likely to produce is personalized products. Not just changes and innovation in function and aesthetics, but entirely new ways of making things that we can't do today."

Technically, on May 25, 2016, Uniqlo became the second apparel manufacturing giant to announce it was remaking its production process — informally, at least. But no one cared about that. Or rather, Uniqlo had something more important it wanted people to notice.

Uniqlo staged its first runway show when it presented the 2016 spring/summer collection, but half a year ago nowhere near this many media outlets were sitting around the catwalk.

By autumn/winter 2016 there was more than a runway show. There were also IKEA-style room sets, with models chatting and laughing inside them as though they had always lived there.

An American reporter asked: "Uniqlo has always marketed itself on fashion, but now you're doing runway shows. Don't you think that's a bit much?"

"There's some risk in it, but we have to show more. You know, a pair of trousers can't just look like a pair of trousers."

"A lot of people think we're big, successful, a major international brand. But no. We've taken the business global, but go ask Americans whether they know what Uniqlo stands for — they don't. Ask Chinese people — they don't either… We have a lot of ability we haven't used yet. If someone tells me again, 'You're so successful,' I'll say, 'Thank you, but we still have a long way to go.'"

Those words come from John Jay, who became Fast Retailing's president of global creative in 2014. A former Wieden+Kennedy partner who had done creative work for Nike, Coca-Cola and Microsoft, John Jay says such things easily. He is good at reminding people, in a matter-of-fact tone, that a giant like Uniqlo still has the appetite of a startup. Where Yanai might say that a leader's idea cannot be realized overnight, John Jay will stand in front of more than 100 media outlets and say: "None of Uniqlo's growth so far has been real growth."

John Jay's job is to help Yanai make target consumers around the world understand Uniqlo, and then to build brand dependence on top of that understanding. What he has to instill is not only Uniqlo's values but its aesthetics.

John's cleverness is that he asks the question before anyone else can raise it as a doubt: who is Uniqlo?

On Uniqlo's role, Yanai has given all sorts of answers to the press over the years. Around 2010: "Uniqlo isn't a fashion company, it's a technology company," and its only competitor was Apple, not Gap. By 2015, Uniqlo was talking often about international markets and saying that the lesson of its sub-brand GU was that a company must build "price leadership" and "fashion leadership" at the same time.

However he phrases it, what people know about Uniqlo still rests largely on basics and value for money. The industry barrier Yanai spent so much effort building is now getting in the way of adding further value to the brand. In China, after the phrase "it all comes down to your vibe" went viral, it became for a while the best gloss on the styling skill a Uniqlo outfit demands.

Even Yanai cannot explain clearly what fashion benefit Uniqlo offers its customers. "We don't absorb every fashion trend," he told CNN in a 2015 interview. "We think of clothes as fashion parts… Clothes don't need personality; the customers who choose them need personality. Mixing and matching is the new pleasure of fashion."

That asks a lot of the target consumer. For rivals such as H&M and Zara, the way to win is to put out near-identical products right after the designer shows and stay on the heels of every fashion detail. Uniqlo doesn't do that. Before 2014 it didn't even offer much in the way of fashion reference: leave aside a few flagship stores, and even the mannequin styling in its shops was thin.

In 2014 Uniqlo began rebuilding its management team, trying to use the experience of these outsiders to soften a face defined by value for money. It poached Jörgen Andersson from H&M as global co-CMO, and hired streetwear godfather NIGO as creative director of the UT line. The KAWS collection NIGO recently led set off a buying frenzy; in China alone it brought in more than 100 million yuan.

Also in 2014, Uniqlo restarted the +J line, a selection from its earlier work with minimalist designer Jil Sander. The same year, its collaboration with French model Ines began. By 2015, Carine and Lemaire had joined the list of collaborators.

All of this gave the brand talk and foot traffic. People could dimly sense that Uniqlo was trying at fashion, but the sense was so faint that it did nothing to override the mental setting of price and basics.

Uniqlo needed the currently fashionable "ability to tell a story" — which is to say, it needed more people who know how to sell a pair of trousers and sell a good deal more besides.

Talking about fashion may make people laugh, but Uniqlo has no choice. It is speeding up its expansion into global markets, and competition is getting harder — in new markets such as Britain and the United States, and in a steadily profitable market such as China. The company's own explanation is that the SPA model (Specialty Store Retailer of Private Label Apparel, or manufacturer-direct retail) it relied on for fast expansion may not be able to support fast growth in the more diversified, information-driven environment ahead.

It has not mentioned its "2020 Plan" in a long time. Under the original plan, Uniqlo's sales were to reach US$50 billion by 2020, with at least 1,000 stores in China (nearly twice the current number), making it the world's largest clothing retailer. But as of fiscal 2015, Fast Retailing's annual sales were still under US$20 billion. H&M's were about US$23 billion and Inditex, Zara's parent, was at US$25 billion (converted at the exchange rates of the time). Their sales grew 15% and 19% respectively, and they had 2.3 times and 1.3 times as many stores as Fast Retailing.

In Japan and China, Uniqlo has more than 1,200 stores, 70% of its worldwide total. In fiscal 2015, Chinese consumers accounted for more than half of Uniqlo's overseas sales. Outside Asia, though, almost none of Uniqlo's expansion has worked. We have written before about why Americans don't like Uniqlo; in Europe, Uniqlo has entered only five markets so far.

In those countries Uniqlo faces the same problem of stating who it is. Fashion and cross-industry cultural collaborations have become the most sensible way to build a relationship.

On the first day "Uniqlo and Lemaire" went on sale in October 2015, some styles sold out at several New York stores. A reporter for the fashion site Fashionista wrote, after the press preview, that she had only chatted with Uniqlo's people a little longer than usual and her size had already vanished from the rack. In Britain, Uniqlo has even pushed fashion out front, which is unusual for it. The UT line it launched with the local luxury department store Liberty London was officially described as "a fusion of past and future, creating a bold new fashion crossover."

The key is picking the right sacred objects of local taste. In a market like China the Liberty collection is just a pile of floral prints; in London it is a collaboration with a top trend-setting department store.

On March 18, 2016, Uniqlo reopened its London flagship. It had opened this store briefly in 2007, then had to close it because it understood the British market too poorly. To stir up interest this time, Uniqlo ran a local campaign called "This Way to Utopia," in which several modern dancers performed on train platforms, in parks and elsewhere in the city. Inside the store, retro industrial styling is paired with fixed-gear bikes; on the outside wall is a huge cartoon mural by designer Jean Jullien, full of people of every look, skin color and identity, showing London's cultural variety.

All of these scenes appeared in the video shown before the May 25 autumn/winter presentation. In the footage playing on a loop, Uniqlo displayed its busy presence in many countries — the part it wants to be seen playing.

"What Uniqlo is best at is speed," Yukihiro Katsuta, Uniqlo's director of research and development, told QDaily.

He has been at Uniqlo for 11 years and led the HEATTECH partnership with Toray single-handedly; almost all of Uniqlo's technical fabric development sits under him. Before joining Uniqlo he was a buyer for department stores including Bergdorf Goodman in New York and Barneys in Tokyo, and he handled Uniqlo's design work until 2011, when Yanai poached Naoki Takizawa from Issey Miyake as design director.

The designer and artist collaborations that get Uniqlo talked about involve a complicated division of labor inside the company. With a partner whose own design ability is strong, such as Lemaire, Katsuta takes charge, because he is better than the designer at controlling fabric. With a creative figure such as Ines, Naoki Takizawa works out the design details with her while Ines supplies the inspiration from life. As for someone like KAWS, inside Uniqlo that kind of partner is simply called Content, and NIGO handles it.

Uniqlo doesn't publish any of this. What it promotes is a single concept: LifeWear. According to Naoki Takizawa, Uniqlo doesn't want to sort clothes by function and price the way a department store sorts floors — sportswear, casual, formal and so on. It wants to "shape the brand around how people feel." At the same time, "as a company whose production orders start at 10 million pieces, Uniqlo makes clothes for people who don't care that much about fashion, so that they can also be reasonably in step with the trends."

After all of Yanai's various formulations, LifeWear is Uniqlo's latest definition of itself. You can probably read that ambition in the room sets too — though a great deal can change between the display floor and the actual store.

Katsuta's version of LifeWear is more idealistic. He thinks a store model built on mass production can only solve the problem of efficiency; to meet today's demand for personalization, stores have to build communication with consumers. Ideally, every store could develop the operating character that suits its area while the brand stays consistent.

What Katsuta may not know is that this is exactly the retail reform Nike CEO Mark Parker set about after taking the job — the tastes of the surrounding population decide what a Nike store is. A store in Beijing's Sanlitun and a store next to a university in Shanghai, for instance, might sell with completely different emphases.

Is Uniqlo copying Nike? Probably not. The only sure thing is that it is looking for its own identity, and that everything from design collaborations to supply chain and retail reform is meant to answer that question of who it is.

Cover image from Racked