FAST Retailing, Asia’s biggest apparel business and parent company of Uniqlo, is betting on barcode-less checkouts, vast data collection and other technologies to reach its target of 10 trillion yen (S$86 billion) in annual sales.
The time-saving method, which can tally up purchases at one go due to radio-frequency chips embedded within each item’s price tag, is the brainchild of Takahiro Tambara, the company’s chief information officer.
It’s the kind of innovation he’s planning to introduce into every step of the company’s supply chain and sales operations.
Fast Retailing, which also owns GU, Theory and other brands, is riding a wave of consumer demand for simple, casual styles.
Its second stab at overseas expansion in Western markets is going much better than its first about a decade ago, when it had to close stores from a lack of brand recognition. This time, it’s seeing revenue in the US and Europe grow quickly despite competition from low-cost brands such as online retailer Shein.
“We’re going to invest aggressively in digital, and want to keep hiring talented people,” Tambara said on the sidelines of a retail conference in Singapore. “At the same time, we don’t just want to embrace technology for the sake of technology.”
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That pace of growth, especially in Europe, puts Fast Retailing’s supply chain at risk of falling behind, according to Tambara — that’s where the retailer is building its biggest-ever warehouse. Plus, there still some mundane tasks, such as checking delivery of stock to stores, that could become more efficient using wireless tags, he added.
Although Tambara declined to give specific numbers, he said spending on new tools and services has roughly doubled since 2017. More than 700 programmers and staffers work on production, supply chain, e-commerce and retail innovations under his group.
Initially, it was a challenge for Tambara to convince Fast Retailing chief executive officer Tadashi Yanai to use RFID tags, he said.
Although the price of the chips has dropped dramatically since they debuted decades ago, even a few pennies can add up for a company that measures the cost of every button and every zipper. Another concern was whether the technology might be at risk of becoming obsolete after a few years.
But it’s paying off for the retailer so far. After being introduced in the retail experience, Uniqlo stores were able to cut the number of employees involved in check-out, and re-deploy them to interact with shoppers, helping to drive sales, Tambara said.
There’s still more to do with the tags’ ability to track each item from production to sales, Tambara said. Fast Retailing now plans to use RFID and other tools such as QR codes to track products at the supplier level, wherever it makes sense.
“The goal is to deliver what customers what they want, when they want it,” Tambara said, using an oft-repeated mantra at Fast Retailing. “What we want to do is manage in a way where we operate as if we still run a single store, even if we scale up.” BLOOMBERG
