uniqlo moves into the fast lane with convenience store pick …€¦ · · 2017-05-11microsoft...
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1 DeborahWeinswig,ManagingDirector,FungGlobalRetail&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
April24,2017
Uniqlo Moves into the Fast Lane with Convenience Store Pick-Up in Korea
1) UniqloannouncedthatcustomersinSouthKoreawillbeabletopickuptheir
onlinepurchasesat7-Elevenstoresacrossthecountry.UniqlohasalreadylaunchedsimilarinitiativesinJapanandTaiwan,andunveiledanewuniqlo.comsiteinMarch2017.
2) Forretailers,thekeyadvantagesofconveniencestorepick-upincludelowerlast-miledeliverycost,amoreintegratedomnichannelofferingandhighercustomersatisfaction.Fromthecustomers’standpoint,onlineshoppingwillnowbecomeevenmoreconvenient.
3) Inthisreport,wealsolookatthefuturegrowthprospectsoftheconvenienceretailingindustry.Wearepositiveontheindustry’sfuturegrowth,drivenbyitsdiversifiedserviceofferingandalignmentwithconsumers’preferenceforconvenience.
4) Lookingahead,webelieveprivatelabelcollaborationbetweenbrandsandconveniencestoresrepresentsahugeopportunity,andgivesbrandsexposuretothestrongdistributioncapabilitiesandstronggrowthmomentumofconvenience-storechains.
UniqloLaunches7-ElevenPick-UpinSouthKoreaStartinginJuly2017,onlinepurchasesfromJapanesefashionbrandUniqlocanbepickedupat7-ElevenstoresacrossSouthKorea.Onceapurchaseismadeonthecompany’sofficialwebsite,thecustomercanopttopickuptheorderatthenearest7-Elevenstore;atextmessagewillbesentinformingthecustomerwheretopayandpickuptheproduct.
KoreaisthelatestmarketinwhichUniqlohaslaunchedthisconveniencestorepick-upservice,followinglaunchesinJapanandTaiwan.
• Japan:UniqlofirstlaunchedtheconveniencestorecollectionserviceinJapaninFebruary2016;onlinepurchasescanbecollectedat5,7007-ElevenstoresacrossJapan.In1Q17,thecompanyextendedtheservicetoincludeotherconveniencestores,FamilyMartandLawson,bringingthepick-upnetworktoapproximately43,000stores.
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Source:uniqlo.com/jp/delivary
2 DeborahWeinswig,ManagingDirector,FungGlobalRetail&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
April24,2017
• Taiwan:InMarch2017,Uniqlolaunchedthepick-upserviceat7-ElevenstoresinTaiwan,wherethereareover5,0007-Elevenstores.
WeviewthisinitiativeaspositiveforUniqlo,itscustomersandtheconveniencestoresitiscooperatingwith.
• BenefitforUniqlo—alignswithcompany’sonlinestrategy:Uniqlohasapositiveviewofonlineshopping.Theconveniencestorepick-upserviceshouldhelptoeffectivelyreducedeliverycostsforUniqlo.
• Benefitforcustomers—makesitevenmoreconvenienttoshoponline:Customerswillbeabletoplaceanorderonlinethenpickuptheirorderatthenearestconveniencestore—anytime,anydayandfreeofcharge—eliminatingmisseddeliverieswhentheyareatwork.
• Benefitforconveniencestores—increasesfoottraffic:CooperatingwithUniqloandaddingthispick-upservicehelpstofurtherdiversifytheirservicesand,ultimately,helpincreasetraffictotheirstores.
Uniqlo’sOnlineStrategy:Comprehensive,Enjoyable,ConvenientOnlinesales,whichcompriseover20%ofrevenuefromtheUSandover10%fromChina,arecriticaltoUniqlo’sstrategy.InordertoincreasetheproportionofonlinesalesinJapanfromjust6.2%(asoffirsthalfoffiscal2017),thecompanyhasbeenaggressiveinenhancingtheonlinecustomerexperienceanddeliveryservices.
InMarch2017,Uniqloannouncedthatithadupgradeditsuniqlo.comonlinestoreforJapanesecustomers,withtheaimofstreamliningtheonlineshoppingexperiencebymakingitmorecomprehensive,enjoyableandconvenient:
• Comprehensive:Thenewonlinesitehasawiderproductselectionthananyofitsphysicalstores.Thereareover22,000itemsinsizesfromXSto4XLandexclusivedesignsthatarenotavailableinstoresinJapan.
• Enjoyable:Thesiteadoptsanintuitiveandthumb-baseduserinterfacewhichprovidesanenjoyableandconvenientshoppingexperience.Thesiteoffersadditionalfeatures,suchasShopbyLookforeasymixing-and-matchingofitems,andimagesearchforfindingsimilardesigns/looksfoundinmagazines,etc.
• Convenience:Customerscanoptforhomedeliveryorpick-upfromaUniqlostoreorconveniencestore.
Retailing—theBiggerPictureWebelieveUniqlo’sconveniencestorepick-upserviceispartofabroadertrendwherebyretailersaregravitatingtogreaterchannelintegrationinordertoappealtotheircustomers.
Inresponsetostructuralchangesinconsumerdemographics—anagingpopulationandconsumers’desireformoreconvenienceandon-demandservices—retailershavegravitatedtosmaller-storeformatsinurbanareas,steppedupintegrationacrossmultiplechannelsandofferedexpeditedlast-miledeliveryservices.
US• Amazonhasbeentestingbrick-and-mortarconceptswithacashier-less
conveniencestoreandgrocerypick-upstores.AmazonFreshPickup,launchedinMarch2017,letscustomersplaceordersontheAmazonapp,andpickupatdrive-instores.
3 DeborahWeinswig,ManagingDirector,FungGlobalRetail&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
April24,2017
• WalmartannouncedaplaninApril2017toprovidediscountsforcustomerswhopurchaseonlineandpickuptheirgoodsinstore.
• Seven&Iacquired1,110conveniencestoresunderthetradenamesAPlusandStripesfromSunoco.Theoperatorof7-ElevenstoreshasbeenaggressiveinexpandingintheUS.
Asia• JD.com,China’ssecond-largestB2Cplatformannouncedthatitwillopenmore
than1millionconveniencestoresinChinaoverthenextfiveyears.CustomerswhopurchaseonJD.comwillbeabletopickuptheirpurchasesatthesestores.Priortotheannouncement,JD.comhadbeenexpandingitsphysicalpresenceinChinawithaphysicalnetworkoffranchisedstorescalledJingdongBang.
• CU,thelargestconveniencestorebrandinKoreaoperatedbyBGFRetail,withover10,000stores,definesaconveniencestoreasa‘dailylifeplatform’andusesbigdatatoanalyzeconsumptiontrends.ThechainopenedthefirstkaraokeconveniencestorewithaCUstoreonthegroundfloorandhasdiscoballsinstalledwithK-popmusic.Overthepastfiveyears,thenumberofconveniencestoresinKoreahasmorethandoubledtoreach32,000in2016,accordingtotheKoreaAssociationofConvenienceStoreIndustry.
• Lawsonand7-EleveninJapanhavelaunchedfooddeliveryservicestotargetseniors.
• Fashione-tailerZaloracooperateswithconveniencestoresinHongKongtoprovidepickupandreturnservices,whileASOSletsconsumersreturnmerchandiseatconveniencestores.
Figure1.CUKaraokeConvenienceStore
Source:InsideRetail
PrivateLabelaSignificantGrowthOpportunityConveniencestoresandconsumergoodsmanufacturerscouldcollaboratetocreateawidevarietyofproductsfortheirconsumers.Brandscanleveragetheirmarketingeffortsthroughconveniencestores’vastdistributionalchannels,andconveniencestorescanleverageonthebrands’existingfranchises.
4 DeborahWeinswig,ManagingDirector,FungGlobalRetail&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
April24,2017
• 7-Elevenderives50%ofitsnetsalesfromprivate-labelproducts,accordingtotheAssociationforConvenience&FuelRetailing.
• E-mart,oneSouthKorea’leadingconveniencestorechains,togetherwithSMEntertainment,oneofKorea’smostinfluentialshowbizagencies,haslaunchedprivate-labelproductssuchasK-popartists’brandedinstantnoodles,snacksandsoda.
• CU’sprivate-labelproductscompriseroughly25%ofallproductssoldatitsstores.
Figure2.E-mart:Private-labelcollaborationwithSMEntertainment
Source:Allkpop
ImplicationstoRetailersWeseethefollowingtrendsplayingoutintheconvenienceretailingandbroaderretailindustryinthenearterm:
• Retailerswillincreasinglyshiftfrombigstoretoconvenienceretailformatsinurbanareas.
• Retailwillcontinuetobeamulti-functionalplatformcollaboratingwithotherindustries.
• Thestrengthofconvenienceretailingwillcontinue,giventheirextensivedistributionchannels.
• ConvenienceretailinginChinawillenterarapidgrowthphase,primarilydrivenbychangesinconsumptionpatternsinurbanareasandexpansionplansofconveniencestorechainssuchas7-ElevenandLawson.Theratioofconveniencestoretosupermarketsis8:92inChina,below54:46inJapan,accordingtoebrun,ane-commercemediasiteinChina.
• ThedistributionalcapabilitiesofconveniencestoresdifferacrossAsianmarkets,withJapan,KoreaandTaiwanoutperformingChina.DespitetherapidgrowthofconvenienceretailinginChina,thedistributionofthecountry’sconveniencestoresisfragmented.Brandswillhavedifficultyfindingasuitablepartnertoimplementconveniencestorepick-upservices,duetotheabsenceofaconvenience-storechainwithaclose-knitnationwidestorefootprint.
5 DeborahWeinswig,ManagingDirector,FungGlobalRetail&[email protected]:917.655.6790HK:852.6119.1779CN:86.186.1420.3016Copyright©2017TheFungGroup.Allrightsreserved.
April24,2017
DeborahWeinswig,CPAManagingDirectorFungGlobalRetail&TechnologyNewYork:917.655.6790HongKong:852.6119.1779China:[email protected]
ZaneYangResearchAssistant
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