Fast Retailing, an apparel company that distributes the Uniqlo brand, has embraced digital technology and artificial intelligence (AI) as part of its journey to become a digital consumer retail company.
The move enables the company to meet consumers' dynamic needs and improve operating efficiency.
"Information is very important in our business today. We fully understand that using information in every step of the process can bring new levels of value for our customers," Takahiro Tambara, the company's chief information officer, told the Bangkok Post.
Fast Retailing is the world's third-largest fashion apparel company.
"We work to innovate and create positive change all over the world through our business in order to complete our mission of changing clothes, changing conventional wisdom and changing the world," said Mr Tambara.
Previously the company operated as a speciality retailer of private label apparel, meaning it controlled every step from design and production to logistics and sales in physical stores.
"Now we're transforming into a digital consumer retail company. This shift puts the customer at the centre," he said.
"We're leveraging digital tools to create a dynamic and interconnected business model where information flows seamlessly."
The adoption of digital technology allows the company to anticipate customers' needs and deliver the right products, in the right quantities, to the appropriate locations when they want them, said Mr Tambara.
This is a circular approach that ensures a constantly optimised and customer-centric shopping experience, he said.
"This is why we are transforming to this new business model leveraging the power of information," said Mr Tambara.
The company considers all sorts of input to be valuable, including feedback from customers and staff around the world, as well as broader trends in fashion.
"By listening to these voices, we can inform every step of the process, from product development and production planning to order placement, delivery and supply chain management," he said.
"By maximising the use of this information and leveraging digital tools like AI and robotics, we are striving to elevate the retail experience. We use AI to analyse customer feedback and share it with the designer merchandise teams in Tokyo, Paris, London and New York for new product development."
Fast Retailing also uses AI to conduct demand forecasts and deploys algorithms to optimise inventory and automation of warehouses.
This project started in 2016 and since its digital investment has doubled, said Mr Tambara.
Connecting the dots
He said to achieve its transformation journey, the company must connect all information and elements of businesses from physical stores to online business, linking the retail environment with the supply chain, and matching customers with technology.
Uniqlo innovates to improve the customer experience, with one area of focus the use of radio-frequency identification (RFID) chips to track inventory and streamline management.
This led to the development of self-checkout systems that are faster and more convenient for customers, said Mr Tambara. Uniqlo plans to expand these systems globally.
Moreover, Uniqlo is working towards complete control over its supply chain, he said. This includes using RFID and other digital ID technologies to track materials and products throughout the production process, allowing the company to ensure quality, manage environmental impact and meet customer demand more effectively.
Automated warehouses are being built around the world to increase logistics capacity and shorten delivery times, said Mr Tambara.
In addition, Uniqlo values customer feedback, receiving millions of comments and suggestions annually that are used to improve products, he said.
The company believes AI can enhance its ability to capture and utilise customer data, leading to better products in the future, said Mr Tambara.
Uniqlo's e-commerce business is growing rapidly, accounting for 15% of total sales in fiscal 2023.
This trend is expected to continue, with a focus on integrating online and in-store experiences for customer convenience, he said.
Mr Tambara said specific technologies and innovations such as RFID, self-checkout, automated warehouses, AI and robotics are all important for producing positive results.
Becoming a digital consumer retail company requires integration and smart coordination across the whole business and supply chain, not only specific parts, he said.
"To help us achieve this aim, we will prioritise talent and partners with leading expertise in AI and robotics. We are looking for people who can apply these technologies on a global scale to match our business," said Mr Tambara.
"I am building a truly global team, in terms of both physical location and diversity. We are a global company and global mindsets and views are important for our future.
"We must always remain focused on the customer and make the best use of technology for their benefit. Customers are the reason we are transforming our business model, creating an easier, more convenient, efficient and positive experience for them."