Uniqlo’s blend-in brand well-poised to win market share

A bit of unfamiliarity goes a long way in managing expectations

Experts say Uniqlo can snag market share from fast-fashion competitors such as Zara and H&M when it makes its Canadian debut in 2016 if it capitalizes on its uniqueness and recognizes key differences about the Canadian shopper.

The Japanese retailer confirmed long-standing speculation about a Canadian expansion Monday when it announced the opening of two flagship stores in Toronto: a 24,000-square-foot shop in Yorkdale Shopping Centre and a 28,000-square-foot-shop in the Toronto Eaton Centre.

According to Vicky Applebaum, senior consultant with Toronto’s Retail Category Consultants, Uniqlo’s novelty will earn it an eager clientele at first. The challenge for Uniqlo will be growing and sustaining interest.

“Their first six months will be terrific,” said Applebaum. “The question will be, is novelty a sustainable strategy?”

The retailer has several things working for it. Unlike the outgoing Target, which battled Canadians’ expectations about pricing based on their U.S. shopping experiences, Uniqlo (and its prices) are less-known to Canadian shoppers. The company will have to keep an eye on the Loonie and manage price perceptions carefully, she said.

Uniqlo also has a leg up among millennials, who prefer to build their own personal brands rather than gravitating to major logos, Applebaum said. “They are famous as the un-branded brand.” It’s known for its everyday, casual wear, particularly its denim. And like H&M, it sells everything from socks to business shirts to weather-resistant activewear. But it emphasizes quality and its proprietary materials over style.

“I think their point of difference… is that they actually consider themselves more a technology company and not a fashion company. That’s what really differentiates them from retailers like H&M and Zara. The founder of Uniqlo actually said a good Uniqlo product is one that doesn’t stand out. It blends in. The win is not in the polo player on the shirt or the red sole of the shoe. It’s how the product feels when it’s on.

“The company experiments with synthetic fibres to create these technologically advanced materials in their clothing, so they can withstand various conditions in everyday life.”

Those advancements proved popular in the U.S., where the hint of high-tech anything sells well, but Canadians are slightly different, said Applebaum. We may like what Uniqlo’s “heattech” might do to keep us warm, but we don’t get as excited over the technology.

Uniqlo Canada has plans to eventually branch out to Vancouver and other Canadian cities, said Larry Meyer, CEO of Uniqlo USA and Canada.

“Entering the Canadian market is a milestone for the company and a significant step in our growth strategy,” he said, in a statement.

Canada will be the 18th market for the retailer, which opened its first store in Hiroshima in 1984. It has since branched out to more than 1,500 locations around the world. Its expansion to Canada comes ten years after opening in the U.S., where its multiple stores in Manhattan have long been a draw for Canadian tourists.

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