Japanese clothing platform Zozo merges fine fashion with high tech
TOKYO – Despite a continued slump in the apparel industry, Zozo – the operator of the Zozotown clothing retail website – is doing well, with deal values reaching a new high for the Japanese company.
President Kotaro Sawada, who succeeded charismatic founder Yusaku Maezawa, makes the company a rock-solid fashion platform. Instead of betting on charm and hype, he seeks to create a strong corporate culture based on employees who are passionate about clothing.
“I’m not a charismatic manager,” said Sawada, who took over from the brilliant but flawed Maezawa in September 2019. He considers himself more down to earth, “a little different” from executives who instill personal dogma into their style. management.
Until now, “Maezawa’s very existence has been the management strategy.” The founder was known for his unique personality and penchant for creating controversial tweetstorms. His unorthodox demeanor, described by some as “mischievous” and unhampered by normal corporate conventions, was a driving force behind the company’s initial growth.
But did Zozo lose his advantage after Maezawa resigned? Maybe not, as Sawada now runs the business with words backed by action rather than glamor.
Fashion technology – with an emphasis on fashion – is what the company is targeting now. The employees who remained after Maezawa left are overwhelmingly devoted to fashion. Sawada called on the company to become the leader in fashion and technology and is dedicated to long-term growth.
Zozo began using a company-wide public address system to facilitate communication in 2020, unlike the previous leadership, where employees often learned about Maezawa’s thinking through random tweets.
Meetings have also changed. Before Sawada took over, instructions were given to each department in a top-down fashion and there was little communication between them. “Now information is shared at all levels, from management to the front lines,” said Sawada.
Sawada’s relationship with the companies that sell on Zozotown is also different from Maezawa’s. The Zozosuit – a bodysuit used to take full body measurements – symbolizes this.
Launched in 2017 under Maezawa’s leadership, the Zozosuit was designed for the company’s internal brands, a move that would curtail sales from other clothing companies selling on Zozotown, leading some concerned merchants to protest.
Zozosuit 2 announced in October 2020 is not only more precise but also allows other companies to use the technology. “This is an effort to optimize inventory across the garment industry,” said Hisashi Matsufuji of Zozo, who is leading the project. “We’re where we are today because of all the twists and turns we’ve taken.”
“We don’t do everything ourselves anymore,” Sawada said.
Zozosuit 2 now allows data on over a million body shapes to be shared with other companies, helping them develop clothing in more sizes. The strategy is to increase efficiency for both Zozo and Zozotown traders by reducing the number of returns and canceled purchases due to size issues.
Zozo’s reshuffled position in the fashion industry has helped him gain the trust of clothing companies during the pandemic. Companies experiencing a drop in store sales have found the Zozotown platform to be a reliable partner. In the fiscal year ended March 2021, the value of merchandise transactions increased 22% from the previous year, reaching a record high of 419.4 billion yen ($ 3.8 billion). “The time has come for us to take another step forward,” said Sawada.
In an effort to take the business to the next level, Sawada wants to transform Zozo into a system that works seamlessly with brands in all aspects of the apparel industry — from upstream manufacturing to sales to downstream detail. It will not only sell products, but also support manufacturers at the planning stage.
Specifically, Zozo envisions sharing demand forecasts collected by Zozotown, digitizing production management, and streamlining material supply and logistics arrangements through bulk orders.
The company created a specialized business unit this year that coordinates with brands to create the necessary infrastructure behind the scenes.
The seeds of fashion technology sown by Zozosuit have germinated, and Zozo is now trying to make the jump from a clothing shopping site to a full fashion site.
Along with the March launch of its cosmetics mall, Zozocosme, Zozo began giving away free Zozoglass, a glasses-like device that measures skin tone. Users open the Zozotown app on their smartphone and take a photo of their face while wearing the Zozoglass to analyze skin characteristics. The system then recommends products from Zozotown, such as foundations and other cosmetics, depending on the skin type.
The expertise gained during the development of the Zozosuit was used to create the new skin care technology. One can see the distinctive white dots of the Zozosuit attached to the Zozoglass. “It wouldn’t have taken shape if we hadn’t had the Zozosuit experience,” said Takayasu Yamada, head of the company’s imagination strategy office, which is in charge of new ventures.
Customers have placed over a million orders for Zozoglass. Demand from consumers who buy cosmetics from home during the pandemic appears to be driving the purchases. “I can quickly find a color that pairs well with my skin, rather than trying a lot of products in a cosmetic store,” said a woman in her 30s. Others commented that it was easier to find suitable products.
For sizing and shoe selection, Zozomat, which launched in February 2020, has reached over one million users in three months. Users place their foot on Zozomat and photograph it from multiple angles with a smartphone, with the shape of their foot being converted into three-dimensional data.
Artificial intelligence technology can then make individualized recommendations. “I sometimes feel bad for the store staff when I try on three or four pairs of shoes,” said Yamada. “Now it is easier for people in rural areas to buy in stores in Tokyo, even without coming to try the products. “
Zozomat for measuring the size of hands, wrists and fingers is also on the horizon, with the aim of boosting jewelry sales. About 86% of annual Zozotown users are active members – people who buy at least once a year – in the fiscal year ending March 2021. Many users sign up when they request a measuring device, which seems to lead to continued use and sales.
Zozo plans to start exporting its measurement technology overseas by the end of 2021. In addition to fashion, the company is considering a wide range of applications, including healthcare, health-related services. food and games.
“We still have a lot of unique ideas,” Yamada said. “We would also like to move forward with our goals overseas.”