The more desperate the situation, the more sober we must be.
Text丨Chinese businessman Taolu Zhize
September 18, 1997, Shizuoka Prefecture, Japan.
The elderly Kazuo Wada walked into the local court and formally filed a corporate bankruptcy petition.
He was once the unbeatable "retail emperor" of Japan, and at its peak, Yaohan owned more than 400 stores around the world and annual sales of more than 500 billion yen. Today, he is a homeless man with huge debts.
In the era when Japan's economic bubble collapsed and consumption shrank, many consumer giants went bankrupt like Kazuo Wada, and "low desire" became synonymous with Japan society. But on the side of the sinking boat, there are also people who turn the crisis into an opportunity and become the winner against the current.
【Reopening Business Model】
In 1992, Yanai Masa, the founder of Uniqlo, was "cut off from funds" by Hiroshima Bank. The governor advised him:
"You've got a lot of stores, it's time to stop."
This year, Japan's economic bubble burst, many of the bank's loan companies collapsed, and the president felt that Uniqlo would not last long.
On the other hand, consumer trends are also changing dramatically.
After the Plaza Accord in 1985, the yen appreciated rapidly, purchasing power increased, and Japan consumers bought global luxury goods. At its craziest, 90 percent of women in Japan own a LV and nearly 60 percent own a Prada.
However, in 1992, the size of the Japan apparel market took a sharp turn, and the growth rate fell sharply from about 7% in 1991 to -7%. Japan media described the people as waking up from a "hangover".
Since then, the size of Japan's apparel market has shrunk at a rate of almost 5% per year.
Yanai Masa's life is not easy either.
Uniqlo, which originally focused on low-cost casual wear chains, has grown like a bamboo since its first store opened in 1984, but after the economic crisis, its low-price advantage has also failed. On the day of the opening of the new store Chiba Midorichi, Yanai was eager to help the scene, but he saw that there were no customers in the store.
In the following four years, Uniqlo's new store was repeatedly cold. From 1996 to 1998, Uniqlo lowered its performance expectations for three consecutive years.
At the Hokkaido store, where the situation is most serious, Yanai laments:
"You can't even sell a single piece of clothing here!"
The situation is urgent, and Yanai is immediately launching a rescue operation.
He invested 1 million yen for UNIQLO to advertise in newspapers across the country and solicit it from the public, what are you dissatisfied with about UNIQLO?
There are more than 10,000 feedbacks, almost all of which say that Uniqlo's products are of poor quality, cheap and not good: "The sweatshirt will be opened after washing it once." "The neckline of the T-shirt comes loose after one wash."
There are also consumers who said that they were afraid of embarrassment when they bought Uniqlo clothes, so they deliberately cut off the signage. After learning from the pain, Yanai is taking immediate action:
Keep prices low, but improve quality.
First of all, we vigorously optimize the supply chain and temper a team of suppliers who can play the best.
In the past, Uniqlo's garments were outsourced to Chinese OEMs. At that time, these factories had low labor costs and cheap products, but the quality was average. Many products cannot be sold in stores, and in the end, they can only be further reduced in price.
Yanai Masa's approach is to survive the fittest and restructure suppliers. Of Uniqlo's 140 suppliers in China, he cut only 40 to ensure that the remaining suppliers responded quickly, had good quality, and could fight a tough battle with the brand.
Moreover, he will also send people to keep an eye on the suppliers who are left behind.
After the decline of Japan's textile industry, a number of skilled workers faced unemployment, and Yanai recruited these workers to assist in production in Chinese foundries.
At the same time as the quality is improving, Yanai is realizing that in the face of new forms of consumption, management must also be changed: the power of leaders should be split, so that the business team can fight faster and smarter.
He first set up a decision-making team at the headquarters to be responsible for Uniqlo's strategy: "This group of people has better minds than me, and they can always produce a clash of ideas, which is much better than the way I make decisions alone." ”
At the same time, Yanai Masashi also delegated the power of the headquarters. In the past, the product display, purchase operation, publicity and marketing of Uniqlo stores were all made by the headquarters. Now, the store manager can adjust all the changes according to the situation of the store.
In order to motivate store managers, the compensation system has also been restructured: in the past, store managers' income was based on the group's performance, but now it is based on individual evaluation, and whoever does a good job in the store can receive a high salary, up to 10 million yen.
After reinventing the wheel from quality to management, Yanai began to lead UNIQLO to build a more differentiated core value: creating its own unique flagship products.
He set his sights on the polar fleece, a popular product at the time. This fabric is cold-resistant than wool, and is light and easy to clean, but it is monopolized by United States companies.
Yanai is determined to bring down the price of polar fleece.
After in-depth understanding of the product supply chain, he devised a production path that best reduced costs: buying raw materials in Japan, primary processing in Indonesia, and finished products in China.
In the past, Japan wanted to buy a fleece sweater for 10,000 yuan, but after this transformation, the price of Uniqlo's fleece sweater was directly 1900 yen.
On the first day of listing, the new product sold out directly. Japanese media sighed:
Uniqlo is selling like crazy!
In 2000, Yanai sold 26 million fleece sweaters a year, more than double expectations.
After a series of reforms, Uniqlo began to grow even more rapidly. Since then, Yanai has continued to expand with the low-priced, civilian Uniqlo and from Japan to the world, soon becoming a new pole in the global apparel field.
In 2009, Yanai became the richest man in Japan with a net worth of 579.5 billion yen; So far in 2022, Yanai has been the richest man in Japan again, and his latest worth is close to 6 trillion yen.
In fiscal year 2023, Uniqlo generated 2.77 trillion yen (about 127 billion yuan) in revenue and 296.2 billion yen (about 13.6 billion yuan) in profit. The current market capitalization is close to 14 trillion yen, or about 640 billion yuan.
In just 40 years since the first UNIQLO store, Yanai has grown from scratch to become the world's third-largest apparel retailer, and is still expanding its success.
【Maintain the initiative to attack】
In 1992, at the age of 60, Toshifumi Suzuki officially succeeded Masatoshi Ito as the president of the Ito-Yokado Group, taking the helm of the convenience store brand 7-Eleven.
He was dealing with a declining market.
In the 80s, when new convenience stores sprung up in Japan, Toshifumi Suzuki said, "This is the decade when convenience stores have taken root in Japan. ”
However, after the bursting of the bubble economy, the retail industry was hit hard, and supermarkets, department stores, and convenience stores ...... All players are thinking about transformation, or price wars.
At its worst, Japan closed more than 2,000 convenience stores in a year. Some Japanese media shouted that the saturation era of convenience stores has arrived.
But Toshifumi Suzuki said internally: "I never think about winning by price, as long as we can meet consumer demand, there is still room for convenience stores." ”
Toshifumi Suzuki believes that, like other retail companies, fighting a price war, involution in similar products can only be a dead end, and 7-Eleven has only one way to go, constantly developing perfect products, beyond consumer awareness.
Toshifumi Suzuki said, "As long as we create new product value, we can avoid 90% of market competition. ”
For example, rice balls are a classic category of convenience stores. At that time, the mainstream rice ball in Japan convenience stores was 100 yen per piece, and the price was often reduced. The R&D staff advised Toshifumi Suzuki: "Shall we make cheaper rice balls?" ”
But Toshifumi Suzuki decided to make the rice balls exquisite, and he launched salmon rice balls, which sold for 160 yen each, but they became very popular.
For another example, Toshifumi Suzuki saw that in the past, convenience stores only had canned coffee, and women didn't drink it much, so he pushed for a freshly ground coffee machine in all stores to attract more mainstream consumers.
This decision gives 7-Eleven one more tool to acquire customers from a group of convenience store brands.
And the "not delicious" products, no matter how well they sell, Toshifumi Suzuki insists on killing them.
7-Eleven once developed a red bean glutinous rice ball, which was quite popular after it came out, only Suzuki Toshifumi was dissatisfied: "The rice ball should be steamed, you cook it in a pot, it is not soft and glutinous at all!" ”
Another popular product, fried rice, Toshifumi Suzuki was furious after tasting it at lunch: "Your wok is not hot enough, the rice grains are sticking together, this is not fried rice at all!" He informed the person in charge on the spot that if he couldn't make authentic fried rice, the product would be permanently removed from the shelves.
In Toshifumi Suzuki's view, the two products make the mistake of "seller's perspective", for consumers, if the food does not taste as good as cooking at home, then why should I go to a convenience store to consume?
In addition to products, Toshifumi Suzuki also insisted that retail must not wait for consumers to come to the door, and must take the initiative to create demand and attack the market.
Since a convenience store is called a convenience store, it should provide all services related to the convenience of life, and should not only sell food.
For example, Toshifumi Suzuki once insisted on moving ATMs into 7-Eleven stores for the convenience of consumers. The decision was met with opposition both inside and outside, with Japanese media reporting that now that banks are struggling on the verge of bankruptcy, it is wishful thinking for 7-Eleven to wade into troubled waters.
There are also bank chairmen who find Toshifumi Suzuki: "I hope you can stop the precipice." ”
By the time the ATM was installed, not only did there be a long queue of customers to withdraw money, but it also drove sales from 7-Eleven. In just three years, its ATM business was profitable.
Under the promotion of Toshifumi Suzuki, 7-Eleven has also launched a number of convenience services that seem to have nothing to do with retail. For example, you can make a copy of your identity and pay your utility bills. Customers can drink coffee and eat bento boxes while they wait, and enjoy free internet.
In terms of the pace of expansion, Toshifumi Suzuki is also quite scheming.
On the one hand, he demanded that 7-Eleven must open every store.
He said: "Business is not a numbers game, and indiscriminately setting store opening targets is going the wrong way." The real goal of a convenience store is store quality. ”
On the other hand, he demanded that stores must be opened intensively, and a brand war with multiple stores to penetrate the minds of consumers.
In a word, more and better, first good, and then more.
This allowed 7-Eleven to buck the trend and expand aggressively. In 2007, 7-Eleven surpassed McDonald's to become the world's largest chain brand in terms of the number of stores.
Today, 7-Eleven is the world's largest convenience store brand and the fourth largest retailer, with revenue of 11 trillion yen and profit of 500 billion yen in 2023, and the latest market value of nearly 4.7 trillion yen, or about 218 billion yuan.
【Retain Consumers】
In 1993, don Quijote founder Takao Yasuda felt chills for the first time.
Since 1991, Japan's retail industry has turned downward, and the national retail sales of goods have fallen from 8.7% growth all the way to negative growth of 2% in 1993.
Don Quijote is also in the discount retail store track, and the competition is also extremely fierce.
Previously, Japan's retail industry hegemon Daiei Group engaged in discount stores, and successively established a number of brands modeled on Wal-Mart and Costco, but fell into continuous losses after the bursting of the economic bubble.
From Daiei's failure, Takao Yasuda sees the weakness of discount stores:
Supply!
The supply of discount stores is generally expiring food, defective products or obsolete tail goods. These products are inexpensive, but they struggle to mobilize long-term consumer enthusiasm.
There are not many types of goods in Darong Group, and the homogenization is serious, and there are only a few things that are bought and bought, and there is no freshness; The shortage of small and medium-sized discount stores is serious, and the experience is extremely poor.
To be a stand-up discount store, it is necessary to find the best and most cheap sources.
Takao Yasuda offered a set of methods, first of all, to tilt resources to high-quality suppliers, and the payment was settled in cash, and the account period did not exceed three days!
This means that don Quijote is facing extremely high capital turnover pressure, but it also has the advantage of being ahead of its opponents and giving priority to the best quality sources in the industry.
The second is to mobilize the creativity of all employees. In don Quijote stores, each regional leader can choose the purchased goods independently, and even directly purchase them with the company's budget. Takao Yasuda also deliberately set up an award, if the store manager can make the surrounding rival stores close, the headquarters will directly award a gold medal.
This creates a bizarre scene, a chain of retail stores, each with different goods and prices.
Finally, it is to develop its own brand to fill the gap, which is similar to Uniqlo's independent products. In 2009, don Quijote officially developed its own brand, and by 2022, its local private label sales have accounted for 15.3% of total sales, covering more than 1,200 products.
With cheaper, higher-quality and diversified products, Yasuda has also devised a set of sales tactics that are unique in the industry to further boost sales.
He asked don Quijote stores that the product mix must be 60 percent regular goods, 40 percent discount products, and the discount products must also be placed in a conspicuous position, and the shelves should be stuffed, the more the better.
Even, don Quijote holds a "display ironman" competition every year, and there is only one competition to see who can stuff more goods on the shelves.
There have been cases where an employee violated the requirement by placing discounted items in the back row. Takao Yasuda, who was furious, summoned all the clerks and lit a 10,000-yuan bill on the spot:
"Am I ridiculous? But you are even more ridiculous! I only lost 10,000 yuan, and you will lose hundreds of thousands of dollars by doing this! ”
In addition, he pairs the discounted items with the most pompous copy.
Takao Yasuda has set up a professional department in each store, and there are various marketing posters and copywriting for cheap products, but the core is one cheap: "Absolutely low price, overwhelming the opponent!" "If it's expensive, we'll refund it!"
Takao Yasuda said, "Retail is not a store, but a buying store, and posters are our love letters to customers. ”
He also wrote the theme song for Don Quixote, the lyrics of which read:
"First come, first served, dream world, coming to Don Quixote is addictive, impulsively buying but feeling that you have earned it."
All of the above creates a strange phenomenon: consumers come to don Quijote with messy display and irregular pricing, which is more of an adventure than a purchase.
Compared to other discount stores, the don Quijote experience is irresistible. Don Quixote also bucked the trend as a result.
In 1998, don Quijote was listed on the Tokyo Stock Exchange. By 2023, don Quijote will record a revenue of 1.94 trillion yen and a profit of 66.2 billion yen.
Don Quijote's latest market capitalization is about 2.5 trillion yen, or about 110 billion yuan, and it is already the fourth largest retail brand in Japan, after 7-Eleven, Aeon and Uniqlo.
【Name Recovery】
"Be sure to keep your name safe."
In 2001, the Japan animated film "Spirited Away" became popular all over the world. Director Hayao Miyazaki emphasized in the film that people should stay away from magic and find their real names, which is a metaphor for the young people of a desireless society who should stay away from the hustle and bustle and regain their strength after the bubble bursts.
For Japan companies in the downward cycle of consumption, the same is true:
Forget the desire for expansion and impetuousness in the prosperous era, and find the essence of your business.
Takao Yasuda once lamented that in the eighties, there were thousands of discount stores in Japan, but these small bosses lacked perseverance, and when they had a little success, they immediately went to speculate in real estate and stocks, instead of continuing to improve their business, and the result was all folded in the crisis.
Looking back at the era of consumption downturn, the Japanese companies that have successfully broken through are:
Absolute emphasis on the consumer.
Even if consumers become passive and lazy, they can dig out new growth points.
Japan's lost three decades have given rise to a massive single-person economy, where young people lie passively and lose their enthusiasm for the real world.
But as a human being, the most basic material needs are still there.
As a result, since the nineties, Japan's affordable catering has become very popular, and one-person beef rice from Shiqijia and Yoshinoya has become popular all over the country; Convenience stores are also selling small portions of fast food.
These successful companies come from all walks of life, but they all have one distinct characteristic:
Take the initiative to change and reposition your market and operations.
For domestic entrepreneurs, there is no better experience than this:
The essence of the so-called catering to the times is to cater to the consumers of the times.
Why do consumers choose themselves?
This is the "real name" of the enterprise.
[References]
[1] "One Win and Nine Defeats" Yanai Masa
[2] "The Philosophy of Retail", Toshifumi Suzuki
[3] "My Don Quixote Life", Takao Yasuda
[4] "The Optimal Solution of Japan's Discount Format: Analysis of Don Quixote" Qicheng Capital
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