In Japan, an aging population and declining birthrate have led to labor shortages and fewer customers. These issues are challenging for the retail industry, including the apparel sector. Solutions to these challenges include implementing online-merge-offline (OMO) strategies and sustainability initiatives. In the apparel industry, the adoption of omnichannel strategies is gaining significant attention.

In this article, we discuss omnichannel strategies that Japanese apparel companies can adopt. We also explain the importance of these strategies and key points for store staff.

What’s in this article?

• What are omnichannel strategies?
  
• The market size of the apparel industry in Japan
  
• Why omnichannel strategies are important to Japan’s apparel industry
  
• What do omnichannel strategies demand from store staff?
  
• Examples of omnichannel strategies in Japan’s apparel industry
  
• How Stripe Terminal can help
  

What are omnichannel strategies?

The term “channel” in “omnichannel” refers to “sales channels.” These are the points of contact companies use to interact with customers during sales activities. Specific examples of sales channels include:

• Physical stores
  
• Ecommerce sites (including ecommerce malls and apps)
  
• Social networking services (SNS)
  
• Apps
  
• Email newsletters
  
• Direct messages
  
• Catalogs and magazines
  
• Commercials
  
• Other advertising
  

In other words, “omnichannel” refers to a sales strategy that integrates and coordinates these points of contact (i.e., sales channels) to approach customers across all channels. This can help customers experience consistent shopping experiences and can help businesses improve customer satisfaction. This can lead to increased sales opportunities.

Differences from single channel strategies

“Single channel” refers to a limited sales channel where a company interacts with customers through a single point of contact. The business types below are classified as single channels:

• Individual stores
  
• Catalog sales
  
• Online shops
  

Unlike omnichannel strategies, single channel strategies use one point of contact with customers, which can restrict promotional activities. For items that are hard to find—such as exclusive or valuable goods—a single-channel approach can be effective.

Differences from multichannel strategies

Omnichannel strategies and multichannel strategies might seem similar. Their fundamental concepts are the same, but they are different strategies.

For example, omnichannel strategies integrate data from multiple sales channels. In contrast, multichannel strategies simply offer customers multiple sales channels to use. In other words, multichannel strategies involve each channel operating independently with no coordination among the channels.

While multichannel marketing can expand brand awareness and sales across each channel, it requires separate sales strategies, information management, and personnel for each channel. Ultimately, this can lead to issues such as increased costs and excessive workload.

Differences from cross-channel strategies

Cross-channel strategies provide multiple points of contact between the company and customers. They also integrate information across each channel. For example, a cross-channel service would allow customers to order items from an ecommerce site and pick them up at their nearest physical store.

The difference between cross-channel and omnichannel strategies is that cross-channel strategies do not centrally manage customer information, rewards points, and other data in the same way as omnichannel strategies. As a result, customers tend to consistently use the same sales channels.

On the other hand, omnichannel strategies integrate channels. In comparison to cross-channel strategies, omnichannel strategies allow customers to enjoy a simpler and more convenient shopping experience. Therefore, omnichannel strategies are an enhanced version of cross-channel strategies.

Differences from unified commerce

Unified commerce manages customer information in an integrated way to provide customers with personalized, valuable shopping experiences. Unified commerce enables this by consolidating customer data collected from ecommerce sites and physical stores. This includes member information, browsing history, purchases, inquiries, and reward point use. Because this data is shared in real time, customers have a consistent shopping experience in each sales channel.

Unified commerce is built on the foundation of integrating omnichannel data. Therefore, establishing an omnichannel presence can be considered the foundation for advancing unified commerce.

Furthermore, omnichannel strategies do not offer personalized and optimized approaches, which are fundamental in unified commerce. Omnichannel strategies are simply marketing strategies that integrate multiple sales channels. This is the key difference between the two.

The market size of the apparel industry in Japan

In 2024, the Yano Research Institute conducted a survey on the size of Japan’s domestic apparel market. Here are the results:

• 2019: ¥9.1732 trillion
  
• 2020: ¥7.5158 trillion
  
• 2021: ¥7.6105 trillion
  
• 2022: ¥8.0591 trillion
  
• 2023: ¥8.3564 trillion
  

The size of the apparel market declined in 2020 compared to the previous year due to the impact of the COVID-19 pandemic. However, since 2021, the year-on-year results have exceeded previous years. When examined by sales channel, the recovery of physical stores—such as department stores and specialty shops—was particularly notable. This is attributed to increased opportunities for outings as the pandemic subsided, which boosted demand for clothing. Meanwhile, ecommerce experienced rapid growth during the height of the pandemic, but its growth slowed as the pandemic eased.

Many project that the apparel market will steadily recover over the next few years, with the market size eventually returning to pre-pandemic levels. In the long term, there are concerns that the apparel market will gradually shrink because of the declining birthrate, aging population, and population decline. However, if labor wages continue to rise, clothing expenditures are also expected to increase.

Why omnichannel strategies are important to Japan’s apparel industry

Below, we detail the primary reasons why omnichannel strategies are important for solving challenges in the apparel industry.

Increase sales

One of the purposes of implementing omnichannel strategies is to increase sales by counteracting the declining birthrate, aging population, and population decline. To maximize profits, it is important to increase the average purchase amount and purchasing frequency of each customer. Omnichannel strategies enable the consolidation of data from physical stores and online (i.e., ecommerce) channels, making it possible for businesses to retain customers and effectively prevent lost sales opportunities.

Resolve labor shortages

The lack of sufficient labor is one of the biggest problems the apparel industry is facing. Omnichannel strategies are gaining attention as a way to address this labor shortage.

Omnichannel integration centrally manages information gathered through multiple sales channels. Through this, businesses can achieve operational efficiency and simplified processes in inventory and order management. Furthermore, promoting the use of ecommerce sites can also help reduce workload for staff in physical stores.

For example, with consolidated inventory data from physical stores and ecommerce sites, store staff can quickly check inventory on a mobile device. That way, even if a product is out of stock at a physical store, staff can direct customers to the ecommerce site or the nearest store that has the product in stock.

Support smartphone users

Before the widespread adoption of smartphones, the primary sources of information about trends and sales were paper ads, television, and fashion magazines. Now, smartphones are the most common way to gather information.

With a smartphone or other mobile device, customers have the ability to check fashion-related information any time. For example, customers on an ecommerce site can receive sale information and new item updates via email or push notifications. They can also easily check posts from their favorite brands and stores on social media.

In this context, integrating data from multiple sales channels through an omnichannel approach helps to create a consistent shopping experience in physical stores and on ecommerce sites. This can enhance customer satisfaction among smartphone users and could increase the likelihood of larger and more frequent purchases.

Use precise marketing strategies

Omnichannel strategies involve consolidating and storing data across various sales channels. This makes it possible for more granular data analysis than what is achievable through physical stores or ecommerce sites alone.

For example, there is a system that attaches quick-response (QR) codes to products in physical stores. When customers scan these codes, they can view detailed product information and reviews. This enables businesses to understand which products in physical stores are interesting to customers and use this data for marketing strategies.

Furthermore, as opportunities to gather information across multiple sales channels increase, businesses can collect more data. This can enable the business to implement more precise strategies. For example, businesses can use this collected data to make product recommendations customized for each customer’s needs and implement sales promotions aligned with their buying patterns.

What do omnichannel strategies demand from store staff?

Below, we explore the issues that store staff should consider when businesses implement omnichannel strategies.

Staff training

When implementing omnichannel strategies, it is important to focus on training to ensure that every staff member at a physical store can readily handle operations. Here are some specific examples:

• Providing customers at physical stores with products purchased from ecommerce sites
  
• Explaining and suggesting services available on ecommerce sites and in physical stores
  
• Operating the digital tools used during work hours
  

Appropriate inventory management

If customers can pick up items ordered from the ecommerce site at a physical store, it is important to maintain product stock at the store. Therefore, store staff should monitor inventory levels and check the number of in-store pickups daily.

Examples of omnichannel strategies in Japan’s apparel industry

MUJI

MUJI—a popular brand across a broad spectrum of age ranges—focuses its efforts on strengthening its apparel business. As part of its omnichannel strategy, the company has launched a smartphone app called the MUJI App.

The primary functions of most smartphone apps offered by retailers include ecommerce-related features, such as online shopping via the app, order tracking, and review posting. While MUJI’s app does include these features, it also has a reward points program called the MUJI GOOD PROGRAM. Through the app, this program creates a flow that guides customers to the ecommerce site and to physical stores.

There are various ways to earn MUJI points, such as posting reviews and registering favorite products. In addition, the omnichannel-focused programs that integrate physical stores also include the initiatives shown below. By performing these actions, MUJI App users can earn points:

• Purchase products: Customers can shop at physical or online stores.
  
• Use reusable bags: Customers can bring their own bags when shopping in physical stores.
  
• Check in: Customers can tap “Check In” at the store displayed in the app based on their current location.
  
• Participate in ReMUJI: This is an environmental recycling program where physical stores are collection hubs for unwanted products to be reused or recycled.
  

Because of omnichannel strategies, customers can use earned points at physical stores and the ecommerce site. The ability to use services that bridge these boundaries can be a major benefit for customers.

Furthermore, the MUJI App offers services that assist both online and offline customers:

• Store inventory search: Customers can search to find which physical stores currently have products in stock.
  
• App-exclusive bonuses: App users receive preferential treatment and coupons.
  
• Barcode scanning: When a customer is unsure about purchasing an item in a physical store, they can scan its barcode to look at more detailed information and reviews of the product.
  

UNIQLO

UNIQLO has also effectively implemented an omnichannel strategy by integrating online and offline efforts.

UNIQLO operates physical stores in Japan and around the world. The company has introduced the shopping assistant UNIQLO IQ as part of its omnichannel initiatives. UNIQLO IQ is a customer service system that uses artificial intelligence (AI) chatbots with the following capabilities:

• Order-related inquiries: The chatbot can handle issues such as requests for extending the pickup period at physical stores for items purchased online.
  
• Item suggestions: IQ can provide recommendations for coordinated outfits and items based on the customer’s fashion tastes and preferred styles.
  
• Size consultations: IQ can assist in selecting a size when the customer isn’t sure which one would fit best.
  

The chatbot can handle customer concerns and requests that store staff alone cannot fully address. It also allows the company to collect more detailed data on customer needs, purchasing behavior, and product search patterns.

The app also includes the following features, which were designed to encourage in-store visits:

• Up-to-date stock information: Customers can check new arrivals at the physical stores they save in the app.
  
• Store inventory: Customers can check the in-store availability of the products they view in the app.
  
• Basic store information: Customers can check a store’s location and business hours.
  

As the app’s utility improves, customers can enjoy shopping more comfortably in physical stores and on the ecommerce site. As part of its omnichannel strategy, UNIQLO uses a variety of app-based services that were designed to spark interest in its physical stores.

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