GU smart cart smart mirror

TOKYO — After previously proclaiming that its Uniqlo chain is now a “digital consumer retailing company,” it seems that parent Fast Retailing has similar plans for its smaller, cut-price brand GU.

At a press conference here Thursday, GU’s chief executive officer Osamu Yunoki laid out a new strategy for the retailer that will be implemented from this fall season. As with Uniqlo, digitization and globalization are two key focuses.

Yunoki said GU will draw on e-commerce and omnichannel platforms to increase its reach to consumers, while also using the Internet and social media to track trends from the runways to the street, and then bring those trends to customers. The company aims to better match both information and products to consumers.

E-commerce currently makes up only 5 to 6 percent of GU’s total sales, but Yunoki said he wants to increase this to at least 30 percent as soon as possible.

“We have two strategies [for e-commerce],” the executive told WWD. “One is to make e-commerce the best flagship store, with the full product lineup and the best presentation, including various styling options and product information. E-commerce should have strengths that regular stores don’t have. Number two is to remove all the handicaps of e-commerce by offering services such as next-day shipping, the option to not only have orders shipped to your home but to pick them up from a store or convenience store, and more payment options, including deferred payment.”

Yunoki said that an important strategy moving forward will be to create synergy between physical stores and e-commerce, so that customers use both options. GU will test out some ways of achieving this at its largest store yet, which is set to open Sept. 15 in Yokohama, just south of Tokyo.

The 29,000-square-foot store will employ smart carts and smart mirrors, which will utilize RFID to give customers a more complete shopping experience. Simply by placing an item in the cart, shoppers will be able to see the stock information, other available sizes and colors, customer reviews, and styling suggestions. By holding up a product in front of a mirror, reviews and outfit options will appear.

Yunoki said the company plans to test these technologies in the Yokohama store and if they are well-received they could be implemented in other locations, and possibly Uniqlo stores as well.

The new store will also have 10 self-service registers. These have already been installed in 174 GU locations in Japan, after having been first introduced last June.

GU will be roughly doubling its product offering from this fall to offer more variety. While not every style will be available in every store, everything will be available for purchase online.

But even as the product offering grows, Yunoki said it’s important for GU to retain its character and strengths.

“Particularly outside of Japan, people say they like that our product offering is curated. We have the hit products from the big trends, but we don’t have everything,” Yunoki said. “So it’s easy for people to choose, to buy, to style pieces together, and to wear them. Basically, it’s easy to understand.”

While GU previously targeted mainly young working women, its customer base has expanded to include everyone from students to housewives. Those in their 20s and 30s are still the largest age group to shop the brand, but there are also teenagers and people in their 40s. Women’s products make up 60 percent of sales, but GU also offers men’s and children’s lines.

GU currently has 360 stores in Japan and 14 internationally in Taiwan, Hong Kong and China. It will be adding 40 to 50 doors a year in Japan, and aims to have 50 stores in international markets by the end of August 2019. To that end it will be increasing the rate at which it adds stores in existing markets, and Yunoki said he hopes to enter new markets as well. Next will be either Southeast Asia or South Korea, with Western countries to follow.

“We would like to be in every international market where Uniqlo has a presence,” the executive said. He said it has so far worked well for Fast Retailing to open Uniqlo and GU stores side by side, as the sales of each brand benefits from being near the other. The company plans to continue implementing this strategy whenever the real estate is available.

Fast Retailing chairman, president and ceo Tadashi Yanai is known for his lofty sales goals, and GU is no exception. Its current aim is to break 1 trillion yen, or $8.89 billion at current exchange, which Yunoki said he wants to do within 10 years. Fast Retailing does not break out GU’s current sales.

“[In 10 years] we may not be the biggest retailer in the world in terms of sales, but in terms of fashion I want us to be something that customers can’t live without. I want there to be people all over the world who would be really upset if GU were to disappear,” Yunoki said.