Q1: Is there a brand you can point to as being particularly appealing or stimulating?
Uniqlo. They’re very innovative. They have the ability to change their operations every day. I think Uniqlo is the first Japanese brand to succeed with large stores. They adapt the content of their product line and distribute it far and wide. For instance, they’ve created a shop within a shop for lingerie. They’ve developed lingerie meant for individual shops and with that alone they can build a business. While maximizing it to a level where they could sell only that, they’ve set up lingerie departments in stores that are 3,000 or 2,000 square meters in size. That’s how they do business.
With MUJI, we have about 110 stores in China right now. H&M and Zara each have 130 to 150 stores. But Uniqlo has 250 stores. In this new market, Uniqlo’s capacity to innovate is overtaking all these brands that lead the world. They maintain their innovative capability and wield a brand that is recognized by the mass market. Because they can do this, and China will be the biggest market in the future, I’m watching them very closely.
Super-brands like Gucci and Chanel are also very inspiring. Gucci makes merchandise only in its factories in Italy. They thoroughly maintain Gucci quality, and only sell products that they can be proud of. It’s the same with Hermes. They’ve catered to European nobility. There aren’t many companies in the world that can respond to that kind of demand.
In addition, Gucci and Hermes foster workmanship. Just a few elite people graduate from specialized technical schools, and they tend to get hired by these companies. Hermes hires 200 people a year, while 100 people retire. That difference of 100 people represents an equivalent increase in production.
It’s very difficult to protect a single brand with that sort of business model for 100 or 200 years. And that’s why we refer to that kind of business model. For generations they have protected their market position, and they still do. They must continue doing so in the future in order to survive. In that sense, they have a history and the essence for creating a brand as a principle.
Q2: What is the fundamental relevance of the MUJI brand to the business and to MUJI in the future?
With a brand, it’s very important to maintain trust. Some things shouldn’t change, while other things have to change. That’s the main idea for keeping a brand alive. Maintaining balance between things you much change and things you mustn’t change — it’s crucial to maximize the value of a brand over time. In our case, with products that are low tech, it’s important that customers choose to buy them. Our brand represents a culture and a system that needs to be protected in order to create goods and services, and if those two wheels don’t spin together then things become difficult.
Q3: What do you do to strengthen your brand, especially overseas?
We have about 250 stores overseas right now. Many are in Asia. The European economy remains sluggish, so demand changes and Zara and H&M are getting out, too. With such market penetration, the MUJI brand is slowing down. We must unify our brand penetration with the rate of our growth. That is our issue in Europe. The American market is directly oriented toward value sense in terms of price and quality.
We entered Europe in 1991, and now, 20 years later, our brand recognition is fading, so in order to bring it back we have opened stores of 250 or 330 square meters, but the MUJI world has not yet expanded as a result. Therefore, we need flagship stores in England, France, and Germany, too. So far, we have somehow managed to stay in the black, but now we need to broaden the MUJI world by opening flagship stores.
New stores that were placed on the outskirts of large cities haven’t been doing so well. Customer numbers have been good, but not that many people ended up buying MUJI products. It means recognition is high, so we have to think about how to be more precise with our location planning. We have to study the business figures of stores that are close to us in terms of brand taste and price.
You have to consider a particular market in terms of locality. But sometimes a market is unified and global. It’s useful when a single brand can do business in the world. We have to pay attention to timing when we introduce certain products. The key issue is localization, especially when you decide to open a store. You absolutely have to follow local standards. What’s basic is early entry: just open the store, while there are customers who will buy MUJI. In that regard, developing countries and semi-developing countries offer better opportunities.
Q4: Digital media such as smart phones and SNS are broadening. How do you address these media in your global development scheme?
It’s mainly centered on Muji Card. Right now we are in the process of making a system for Passport. Overseas we have plans for internet sales. As the number of brick-and-mortar stores increases, so do recognition and sales, but some people prefer shopping over the internet because it saves time. The demand is overwhelming. Right now we are trying to set up more stores in order to increase penetration and profit.
Operations can be included in something like Mujigram, a system that covers all of Japan. Different countries have completely different regulations, so we are thinking of building it with resources that can be used in any country. We will do it at the same time as we open new stores and promote Internet sales.
Q5: How do you convey your brand concept to your employees and get them to share it?
Concept is everything. These are the concepts we value. Mujirushi Ryohin will not:
• put a brand name on its products
• add unnecessary features
• sell any merchandise other than that which has been designed for Mujirushi Ryohin
• sell to other stores merchandise that has been designed for Mujirushi Ryohin
• use strong colors
• use excess packaging
• use celebrities in its advertising
• publicize collaborations with famous designers
• sell merchandise in a place where it cannot control decor, layout, and product line
• use discounts to attract customers
• prioritize stock work over responding to customers when it comes to retail activities
• carry products that are not useful on an everyday basis in spaces larger than a two or three-bedroom apartment
• target customers based on demographics
• open a store that is not ready to be opened or which cannot meet the capabilities of merchandise development
Removing unnecessary features in order to make something simple is basic to Japanese zen and sado (tea ceremony), eliminating things in order to be plain and reinforce quality and function. The product itself becomes the lifestyle and the sense of value, and that is the supreme characteristic of our brand. But it includes a system of motivation that depends on the season. It is important that things like history, brand concept, and the transition of time permeate the merchandise. And most importantly, the employees should understand in their bones what Mujirushi means. We buy our own products and use them.
Q6: Do executives inspect the stores?
Yes, about twice a year. But there are limits. Again, the best way to carry out penetration is through products we use in our everyday lives.
Also, the people responsible for the brand and their roles should, in principle, change over time. Although the basic concept of Mujirushi doesn’t change, as time goes by certain conceptions do change. The result has been World MUJI and Found MUJI. In particular, our way of developing merchandise changes over time.
In the past, Mujirushi’s goal was to increase sales. You have to fill new stores with merchandise. When there is no product development, a major factor is filling stores with merchandise. So as we increase sales we develop our merchandise. But eventually we were opening 3,300 square meter stores, and it became discouraging, so we had to come up with a new method to develop merchandise.