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Fast Retailing plans to use AI for business reform

  • Category:Shopping

Tadashi Yanai, chairman and president of Fast Retailing Co., which operates the Uniqlo clothing store chain, revealed a plan to use artificial intelligence to drastically reform the company’s product development, during an interview with The Yomiuri Shimbun on March 17.

Yanai will introduce a system that quickly reflects changes in consumers’ needs in the product lineup, shortening the time it takes for a product to go from the drawing board to store racks to just 10 days.

Yanai will also strengthen online sales channels, aiming to put the company’s business performance, which has not shown remarkable growth recently, back on a growth path.

In the interview, Yanai emphatically said, “From the business model in which we sell clothes that were already produced, we will shift to a business model in which we produce only clothes demanded by our customers.”

Yanai plans to speed up development of products by instantly collecting and analyzing information about hot-selling products, with electronic tags attached to the products feeding into the AI program.

“We will produce in a week and distribute in three days. I will realize the plan in the coming year or two,” Yanai said.

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Under his plan, the new headquarters of the Uniqlo chain, which opened inside a distribution center in the Ariake district of Koto Ward, Tokyo, will collaborate with production plants all over the world. Under the new system, products will be placed on store shelves 10 days after the planning of the products.

It will be a shift away from the conventional system in which products are planned and produced several months before being sold.

Fast Retailing will also reinforce distribution channels to compete with major online retailing companies, which have seen dramatic growth.

“I hope that if customers place orders in the morning, the products will reach them in the evening on the same day,” Yanai said, revealing a plan to start within a year or two same-day delivery of products sold over the internet.

Fast Retailing is offering a service in which customers can receive ordered products at convenience stores in cooperation with Seven-Eleven Japan Co. Yanai aims to increase the number of convenience stores where such a service is available to more than 40,000, by making the service available at FamilyMart Co. and Lawson Inc. convenience stores as well.

Growth of Fast Retailing’s business performance has been sluggish. The company lowered its midterm sales target for the period through fiscal 2020 from ¥5 trillion to ¥3 trillion.

About the target, Yanai emphatically said, “We must achieve it.”

 

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