Uniqlo Strategy – The Differences with Competitors H&M and Zara

  • BRAND FOCUS
  • 7 min read
  • 22 October 2019
Uniqlo Strategy – The Differences with Competitors H&M and Zara

After a great success in its home country – Japan, Uniqlo quickly adapted its strategy to expand worldwide. Being the third-largest retailer in the world requires a particular strategy. « From Tokyo to the world »…

How will Uniqlo become the first largest retailer by 2020? Using RETVIEWS, we analyzed Uniqlo’s strategy to understand what makes this brand so successful.

 

SLOWER FASHION THAN COMPETITORS

Uniqlo stands out from its competitors because the focus is not oriented on the quantity of styles produced and their relevance to fashion trends, but rather their quality. The brand rejects the label of fast fashion, as Uniqlo’s CEO once said: 

 

“We do not make disposable clothes.”

Tadashi Yanai, CEO of Uniqlo

 

For Uniqlo, a good item would be made with good materials, good production and would fit many different types of people. Indeed, the Japanese brand is famous for creating the ultimate everyday clothes. People shop there to find great essential pieces as well as a fine selection of minimalist clothing. It is also a go-to for cheap techwear clothing.

uniqlo-competitors-number-items

 

Uniqlo produces far fewer designs than its competitors. This model is more sustainable than the frenetic pace its competitors keep relying on. Sustainability is nowadays more and more critical to the customers, so this is a system that would potentially work in the future. Producing less also makes it possible to create timeless garments that are made to last, which is a focal point of the brand.

 

uniqlo-competitors-materials-knitwear

 

The brand is famous for its knitwear using high-quality materials: almost 70% of the knits are made out of natural fabrics. In comparison, Zara uses only 20% of natural fabrics for its knitwear. Overall, Uniqlo uses 30% of cotton in its collections and only 20% of polyester. For its fast-fashion competitors, polyester is usually the preferred material choice. This is a favourable decision regarding the impact of polyester on the planet (See: Polyester Fiber – The Impact of Fashion Brands on Ocean Pollution). Despite a higher materials quality, Uniqlo is able to keep products at an affordable price. The average price for knitwear is 37,47€ for Uniqlo and 33,16€ for Zara, which is a minimal difference when looking at their higher use of natural materials.

 

 

Customers who are concerned about the environment or who simply prefer natural fabrics for quality, warmth and comfort might think that it would be a smart choice to go for Uniqlo’s wool sweaters rather than Zara’s synthetic ones. The brand has joined the Sustainable Apparel Coalition. It has committed to reducing its carbon footprint by 10% and the use of single-use plastics in the stores by 85% by 2020. It is also working on ways to produce cotton and jeans in a sustainable way, by reducing wastewater, purify and reuse water as well as using eco-stones to create a faded effect on the jeans.

 

A DIFFERENT ASSORTMENT STRATEGY

Using RETVIEWS, we compared the assortment mix of the three fashion giants and two product categories are interesting to watch.

uniqlo-competitors-assortment-mix

 

T-shirt is one of Uniqlo’s bestsellers counting for half of the Tops product category. In the assortment mix, a significant emphasis is also made on lingerie and hosiery with more than 50% of the accessories in these two product categories. This is an excellent strategy to attract customers into stores. Uniqlo offers accessories that need replacing more often and that are pretty cheap so that the customers will return to buy them again. These items are usually placed at the back of the store or on the second floor, so customers will have to go through the whole store, which triggers the purchase of other products.

 

uniqlo-competitors-lingerie

 

Concerning lingerie products, the brand used to focus on comfort-oriented underwear. Uniqlo has now collaborated with the French lingerie brand Princesse Tam Tam (which is also owned by Fast Retailing) to offer more delicate and sophisticated underwear.

 

QUALITY AT A COMPETITIVE PRICE

The pricing strategy of Uniqlo is fascinating as Uniqlos target market gathers people of all ages and both genders, belonging to all demographic backgrounds, and who want to get affordable, high-quality clothing. Therefore, prices are kept very low.

uniqlo-competitors-price-structure

 

About 70% of the prices fall under 30€, with most of them positioned between 10€ and 29,99€. Uniqlo wishes to offer excellent quality at a competitive price which is a pretty unique model. The most expensive item you would find at Uniqlo costs 179,90€, while for its competitors it would be around 500€. Buying in bulks and owning the whole production line allows the brand to reduce costs and thus prices, as well as to make sure the quality standards are respected.

uniqlo-competitors-price-t-shirt

 

If we take a closer look at the pricing of t-shirts, almost all of them cost under 20€. The price range is again tighter than competitors with minimum and maximum prices very close to the average price. With this strategy, Uniqlo makes it clear to the consumers that the focus is on simple products at low prices.

 

INNOVATIVE PRODUCTS

For the Japanese brand, innovation is widely used to differentiate itself on the market. New technologies are created to make their customers’ lives better. The goal is to make comfortable and practical clothes to accompany people every day.

 

uniqlo-competitors-innovation-roger-federer
  • Roger Federer announced that he loves the AIRism line: clothes made out of a fabric that is comfortable and dries very quickly.
  • Many people rely on the Heattech range to stay warm during winter: it is a collection of thermal underwear.
uniqlo-competitors-innovation-blocktechuniqlo-competitors-innovation-uvcut
  • For the rainy days, Uniqlo developed the Blocktech technology:
  • a lightweight windproof and water repellent fabric.
  • The UV Cut technology will protect you from UV radiations caused by the sun.

 

All these innovations are smartly protected by copyrights to prevent the competitors from stealing innovative fashion technologies.

 

COLLABORATIONS

Since the company doesn’t really follow fashion trends, the Uniqlo marketing strategy is very intriguing. To offer covetable items, they love to make collaborations with famous designers and artists.

For one, Lemaire was chosen as the designer of their Uniqlo U collection. Many designers have also collaborated with Uniqlo to create amazing collections: JW Anderson, Ines de la Fressange, Jil Sander, Alexander Wang.

 

 

Usually, prints are not very popular in their assortment, so artists work with the brand to create unique designs on t-shirts. Recently, the Uniqlo Kaws collaboration was a hit with young adults. Many other famous artists like Keith Haring or Verdy (the artist who created Girls don’t Cry) collaborated with Uniqlo.

 

MADE FOR ALL

When shopping in a Uniqlo store, have you ever had troubles finding your size? The Japanese brand makes sure you don’t.uniqlo-competitors-sizes-available

 

These numbers represent the average number of sizes available on the e-shop. Uniqlo offers fewer products than its direct competitors Zara and H&M but minimises the risk of losing a sale due to size unavailability. Their products fit a wide range of people often going from XXS to XXL.

 

uniqlo-competitors-sizes-available

 

Their mantra « Made For All » is also reflected in the wide colours range to choose from. The following chart compares the number of colours available with Uniqlo’s competitors.

uniqlo-competitors-number-colors

 

Uniqlo prefers to offer fewer items but more colour options for each of them. When customers like a product, they might buy it in several colours. It is broad and personalised at the same time, so the customer feels special, but the assortment simultaneously works for all types of people. 

 

THE BOTTOM LINE

To make its way up and become the largest retailer in the world by 2020, Uniqlo developed a unique marketing strategy. The focus is made on quality rather than quantity and trends to offer timeless pieces, in a somewhat sustainable model. The pricing strategy is consistent: low prices for all items thanks to owning the whole production line. Several innovations and collaborations are taking place to make the brand more exciting. Finally, the target market is extensive: the idea is to fit almost everyone.

 

 

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Want to benchmark your brand against Uniqlo? Ask for a free competitors review, now. 

 

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