MEET THE ROBO-TAILOR
Japanese fashion brand seeks tech edge
The future of fashion, according to the Japanese online fashion mall Start Today, involves a custmer donning a black-andwhite polka-dot bodysuit and rotating in a full circle while being photographed by a smartphone.
The reason for this curious ritual: The polka dots on the garment, called a Zozosuit, and the company’s app work together to record the wearer’s measurements.
“I didn’t believe it would work,” said Tokyo resident Atsushi Kumon when he received his Zozosuit in May. He put it on, opened the Zozotown app and followed its robotic voice instructions, which told him to put the smartphone on a stand and move two metres away. Then, it asked him to rotate like a clock and started taking pictures.
When Kumon, 43, looked at the smartphone a few minutes later, the screen showed a 3D image of his body with 18 measurements from neck to ankle, down to millimetre scale.
The suit is free — its primary aim is to sell the company’s Zozo branded clothes, which are designed to fit each person perfectly.
Kumon was surprised when he put on a pair of Zozo jeans, which he bought for ¥3,800 (US$34.50). “The waist size is just right,” he said, pointing to his belly, which contrasts with his overall thin frame. “Not having to try on clothes is great.”
Zozo, which now offers jeans, T-shirts and business shirts, is the centrepiece of Start Today’s bid to transform the fashion industry. Its ambitious three-year plan calls for revenue to grow four times to ¥393 billion ($3.57 billion) by 2021, with ¥90 billion in operating profit. A large part of that growth will come from the Zozo label, which is expected to generate ¥200 billion, 40% of it outside of Japan.
“We will become one of the top 10 global apparel companies in the world,” founder and CEO Yusaku Maezawa told analysts in April. If that prediction proves accurate, the company will join the ranks of Uniqlo owner Fast Retailing, Zara owner Inditex and the luxury conglomerate LVMH.
The Zozosuit is meant to solve a common problem in e-commerce, where customers cannot physically try on clothes. Made-tomeasure clothes are usually expensive and time-consuming.
Maezawa, who admits to having difficulty finding clothes to fit his self-described short legs, believes that making size-fitting easier and more affordable will increase customers’ confidence and “make them want to try more items”.
If his strategy is successful, it could represent a breakthrough for Japan’s fashion industry, which flourished before the 2000s but has since struggled to open up wallets amid a prolonged economic decline. Avantgarde designs have been replaced by inexpensive fast-fashion brands.
Start Today, which has carved out a unique market by matching trendy brands with picky customers, is looking to shake up the industry by moving into manufacturers’ turf.
Of the customers who received a Zozosuit, 60% actually used it to take their measurements and half of those purchased a Zozo product. “The experience (of purchasing Zozo) itself is fun,” Maezawa told Nikkei in a recent interview.
Zozo clothes are manufactured in factories in China, chosen for their willingness to invest in cutting-edge systems, but “I’m thinking of doing it on our own,” he said. “It would be fun to make a solely automated factory in Japan.”
Maezawa, a former drummer in a rock band, founded Start Today in 1998, selling his favourite records and CDs by mail order. He eventually extended the business to fashion items and [in 2004 launched Zozotown]. The name Start Today comes from the title of a song by American punk band Gorilla Biscuits.
“Nobody thought we could sell fashion online,” recalled Masaaki Yajima, director of the e-commerce department at the clothing retailer Beams. The Japanese store brand was one of the first major companies to sell clothes through Zozotown, along with other brands such as United Arrows, in 2005.
Yajima said that one reason for its success was that the website offers an experience close to that of real stores. It presents fashionable images that make it easier for customers to imagine how products could be worn. Products are accompanied by detailed explanations of seasonal trends and material textures. Start Today also standardises sizes that differ between brands to prevent the confusion common in online shopping.
Its ability to gather the trendiest brands and combine them with the convenience of online shopping, which was still new at the time, catapulted Start Today into one of the world’s most successful online fashion retailers.
Thanks to its unusually high profitability, which derives from the high commissions it charges brands for selling their products on its website, its market capitalisation is now $12 billion, four times that of Japan’s biggest department store operator, Takashimaya.
The success has also turned Maezawa, 42, into one of Japan’s youngest billionaires, with a net worth of $2.7 billion, according to Forbes magazine. He grabbed international headlines last year, when he bought a painting by the late American artist JeanMichel Basquiat at an auction for a record $110.5 million.
But while Start Today is well known domestically, it is largely unknown outside Japan. “We were relying too much on domestic success,” Maezawa said.
Zozo is not the company’s first overseas venture. In 2011, it set up Zozotown pages on the Alibaba e-commerce site Tmall in China and eBay in South Korea. Both sites were eventually shut down after failing to gain traction. “Zozotown is not well-known abroad, and people were probably not so interested in Japanese brands,” said Takahiro Kazahaya of Deutsche Securities.
Maezawa nurtured the private-label concept for seven to eight years, a company spokesperson said, adding that he gathered a team and hired pattern makers and sewing operators about three years ago. “It took time to produce something that met our standards.”
Start Today is now launching its Zozosuit and private label in 72 countries this month, and it has set up subsidiaries in Germany and the US. Success in overseas markets is crucial, analysts say, considering Japan’s shrinking population.
But Zozo has not been without its problems. Its original bodysuit had a more futuristic look and was equipped with sensors that could detect measurements with ease. But StretchSense, the New Zealand-based company behind the technology, could not produce the suits on a mass scale. Faced with a huge backlog of orders, Start Today scrapped its partnership and its plan to acquire the startup.
“The cancellation of this project has meant that we have had to make 140 roles redundant. This has been an incredibly tough time for us and our team,” said StretchSense CEO Ben O’Brien.
The shift cost Start Today ¥4 billion. It announced the new version of its bodysuit in April, based on a technology developed by three researchers and purchased for ¥300 million. More than a million Zozosuits have been ordered.
The company has disclosed little about how exactly it will launch its products abroad or its supply chains. Some apparel industry observers question Start Today’s ability to build its production network on a large scale.
“The company said it has secured production, and that prevents the entry of other companies,” said Dairo Murata, senior analyst at JP Morgan Securities Japan. Still, he is highly sceptical of its threeyear sales target.
In the US and Europe, private labels and personalised styling services have become increasingly common for online fashion retailers trying to differentiate themselves.
Zalando of Germany launched its private-label unit in 2010 and has developed 17 original brands. San Francisco-based Stitch Fix, which listed on the Nasdaq last year, sends clothes curated by stylists and computer algorithms based on questionnaires filled out by shoppers. And then there is Amazon, which is making a push into fashion and recently set up a 7,500-square-metre photo studio in Tokyo.
A personalised yet large-scale privatelabel brand is unprecedented. Initial mishaps have not capped the excitement in Start Today — the stock jumped 8% on the day after the new version of the bodysuit was announced. When the company announced its third clothing offering — business shirts for men — on June 6, shares hit another all-time high.
In a sign of its commitment to the new private label venture, Start Today in October will change its name to Zozo — a coinage from the Japanese word sozo, which has two meanings: creation and imagination.
Maezawa’s unconventional approach has drawn some detractors. But, as he once responded on Twitter, “I will stand [against the critics] and definitely gain recognition [from them] some day.”
We will become one of the top 10 global apparel companies in the world YUSAKU MAEZAWA Smart Today founder and CEO