Study: The brand strategy behind Uniqlo’s basics

Translated by

Cassidy STEPHENS

As UniqloLectraFast Retailing

Firstly, Uniqlo prices are different from country to country. The fashion chain is pursuing a more premium strategy in Europe, with an average price per item of $41, compared with $38 in the United States and $29 in Japan. As a result of inflation, its prices have risen by 8% year-on-year in Europe, and by 7% in Japan. In the United States however, prices have remained stable.

“In the US, we went through a long process of trial and error before deciding to break with the business model that sought to attract customers primarily on price. Instead, we have repeatedly communicated the merits of our ‘LifeWear’ philosophy by explaining how it ‘enriches people’s daily lives’, […] and by encouraging consumers to understand the value and merits of our clothing,” commented the company in a recent document outlining its plans for the future.

Uniqlo’s pricing and discount strategy is different in each market – Retviews

Nevertheless, the United States is the market where Uniqlo will be running the most promotions in 2023. Fourty three percent (up 25% on 2022) of items will have crossed-out prices, with an average markdown rate of -55%. In France, promotions account for only 31% of the offer (down 3% year-on-year), while in Japan they represent 41% of products.

“The US market shows the highest discounting, with the proportion of items on sale and the average discount rate respectively 5% and 31% higher than in Japan. With Uniqlo potentially struggling to manage its inventory in the US, is it implementing the most relevant collection for the US market?” asks Retviews.

In the United States, Uniqlo has a smaller range than its competitors, introducing a lower number of new items each month than the likes of Old NavyZara

As far as manufacturing is concerned, Uniqlo is focusing on premium materials such as cashmere, linen and wool, which account for 4%, 2% and 7% respectively of its offer in the United States. These shares are slightly higher than the US market average, “thus solidifying its more premium status as a mass brand,” according to the analyst.