Read more Wikipedia. This allows the company to have full control over their value chain and profit from earning the full retail margin.
How they do it: Next to its physical stores, the company offers a holistic variety of its products in its online store allowing customers to directly order from and to their homes. As the offering in its physical stores and its online store is the same, customers can also use the online store to shop products in sizes that are sold out in the physical store. Clothes are placed on simple racks and shelves. Uniqlo's distribution channels are concentrated in its country of origin; Uniqlo store locations are in Japan.
Uniqlo's distribution strategy has centered on the timing of its products' introductions into stores, with new products created as a function not of quantity, but of demand. Uniqlo responds to changing trends in Japanese fashion and specifically caters its designs to mimic the minimalistic style that is popular in Japan.
This affects the appeal that Uniqlo may have for western distribution channels , and may be the determining reason behind its low number of store locations in the U. Alternatively, Monki sells clothing pieces that are half the price of those sold by Collection of Style and features designs that are comparably youthful.
Zara divides the products sold within its stores into lower garments and upper garments, with price points being higher for the upper garments. Zara hopes to be perceived as a high-end retailer with affordable prices. Its flagship stores are strategically opened in key traffic points worldwide that have high real estate costs, such as its Fifth Avenue location in New York City. Zara does not stress advertising as a part of its branding strategy , differing from Uniqlo; the company instead funnels the dollars that would have gone toward advertising into new store openings.
The adapted strategy from The Gap that Uniqlo employs is to position its brand as private-label apparel; the company creates its own clothing, and Uniqlo only sells it within the confines of its brick-and-mortar stores and on its website. The company also uses sporting events to appeal to the general population. To transport its goods from factories to stores, the retailer relies on rail and sea as a means to promote efficiency within its internal logistics. Zara is able to design, manufacture, and sell its products in stores quickly because the company owns many of the vertical factors of production.
Zara's approach to fashion differs from Uniqlo's in that it attempts to predict customer needs rather than follow current fashion trends. The turnover of products within the store is very high, with an average article of clothing remaining on the shelf for only a month.
Uniqlo manufactures its clothing within Japan. It began using cheap labor in China when Japan experienced a recession in the s. The company has contracts with 84 fabric mills. Uniqlo has also forged a partnership with the Japanese denim manufacturer Kaihara Denim. Fast Retailing. Accessed April 27, Pomona College. Company Profiles. Top Stocks. Dividend Stocks. Warren Buffett. Financial Technology.
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