Driven by technology changes, RFID helps Uniqlo solve inventory

　　Fast Retailing Group hopes to achieve more automation of logistics and retail functions through a series of technology-driven changes, and to better understand and adapt to the preferences of consumers in different regions online and offline.

　　As of April this year, the total value of Fast Retailing Group’s backlog of sweaters, HEATTECH thermal underwear, down jackets and other clothing is approximately 44.8 billion yen (approximately 2.84 billion yuan). In order to solve the problem of inventory backlog, Fast Retailing implemented technology-driven reform measures to accelerate the integration process of online and offline operations, involving thousands of stores and the entire supply chain process in more than 20 countries around the world.

　　We have integrated the two elements of production and retail, and all that remains to be done is to integrate information technology and industry services. We need to transform into an entity that connects all processes.

　　-Yanai Masa

　　Four major changes

　　Improve supply chain efficiency

　　Fast Retailing has established a global strategic partnership with logistics company Daifuku Co, and plans to invest 100 billion yen to automate warehousing and distribution systems. Under the current logistics system, HEATTECH thermal underwear must be stored in the warehouse in advance in May, which brings a lot of additional costs to the company. After the system is updated, the delivery of goods will become more rapid, and at the same time as the time for entering the warehouse can be postponed, the company can maximize cost savings. It is predicted that after the full automation is completed, the number of employees in the Ariake warehouse will be reduced by 90% and 24-hour operation will be realized.

　　Strengthen demand forecasting

　　Inventory backlog is a common problem in the retail industry. In addition to some discounts and promotions, Fast Retailing will also use information technology (forecasting demand) to provide products that consumers really need to solve the problem from the source.

　　For example, the new Advanced solutions Lab established in Tokyo with Google Cloud, a subsidiary of Google, will further increase the speed at which demand is transformed into products and services, and achieve its goal of becoming an information-based production and retail company.

　　In addition, Fast Retailing also invested tens of billions of yen to introduce RFID electronic tags in all stores around the world. Electronic tags can not only save time for payment and inventory management, but also obtain detailed information for analyzing consumer behavior, such as when consumers pick up the product, put it back on the shelf, and when and where the product is sold.

　　Strengthen customer connection

　　Launched Uniqlo's artificial intelligence (AI) shopping assistant Uniqlo IQ to improve online consumption experience. Uniqlo IQ is not a new mobile application launched by Uniqlo, but the Google Dialogflow dialogue interface is built into the artificial intelligence customer service system in the brand app, which can not only help consumers Users search for product information and related wear information, confirm the inventory of a single product, place an online order, and answer shopping-related questions.

　　In addition, UNIQLO also introduced other corresponding measures to strengthen the connection:

　　Digital stores and online semi-customization and the launch of the automatic clothing vending machine Uniqlo to Go.

　　Enhance brand image

　　Brand image upgrade is also one of Fast Retailing Group's current goals. According to Masa Yanai, the group will also redesign the stores and change the logo design of Uniqlo to highlight its Japanese characteristics.

　　In addition, "black technology" fabrics are also one of the reasons why many people choose Uniqlo. Fast Retailing also continues to maintain and strengthen its advantages in this field. In 2018, Fast Retailing announced the strengthening of strategic cooperation with Shima Seiki to "accelerate the comprehensive development and technological innovation of both parties in the field of knitted products."

　　On the premise of maintaining the advantages of UNIQLO's core brand, Fast Retailing Group has also acquired several brands, but in Yanai Masayuki's view, the group's basic strategy is still to "promote organic growth."

　　If we want to borrow money, we can borrow trillions of yen, but what do we want the money for? Buy Inditex, Zara's parent company, or Gap? (Acquiring these two companies) does make us the number one in the world, but this is not interesting enough, things are only fun if we really do it ourselves.

　　-Yanai Masa

　　UNIQLO’s recent sales data for the Japanese market in June showed that sales increased by 27.3% year-on-year, and the traffic of Japanese stores and online stores increased by 25.6% year-on-year, and the average purchase volume per customer increased by 1.4% year-on-year. This is the beginning of 2019. The best data ever.

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