When Japan hosted its first Olympic Games in 1964, it marked the country’s emergence from the post-war era and a return to the global stage as a major economic force. Since then, Japan became the leader in technology and innovation in Asia[1]. And the Japanese government hopes to replicate that success in the upcoming Tokyo Olympic Games.
Yet, ZOZO Technologies, Inc., the platform developer for Japan’s largest online fashion online shopping website ZOZOTOWN, foresaw significant technical challenges. The Games are expected to put unprecedented pressure on networking and IT infrastructure. Any downtime could cause a decline in sales and brand equity for the company and its thousands of partners.
Unexpected Digital Acceleration
Two years ago, ZOZO Technologies calculated it would need hundreds of servers to carry out tasks. To avoid costly upfront investments, ZOZO Technologies shifted to a hybrid cloud model. It seamlessly integrated VMware Cloud on AWS into existing infrastructure. This transformation helped ZOZO Technologies process three times more traffic during its 2019 winter sale. Beyond expanding infrastructure capabilities, enabling remote work was also critical to avoid overcrowding on public transport systems during the Games.
The company was in the middle of testing contingency plans when the COVID-19 pandemic postponed the Games. What started as a business decision to buffer networking challenges has become critical to keeping the company’s lights on. And in the most startling and unexpected manner, the pandemic also accelerated demand for online shopping and set the stage for the retail industry’s transformation.[2]
Understanding Fashion’s Place in Japanese Society
As one of the most fashion-forward capitals in the world, Tokyo’s brick-and-mortar fashion retailers are at the epicenter of Japan’s mainstream and diverse subcultures. Retailers represent a way of life and service, such as:
- “Fast fashion” retailers that champion comfort and individualization within a fuss-free, self-service culture.
- Custom suits to conform with the strict codes of conduct in corporate Japan.
- Traditional kimono shops that celebrate individual milestones, while doubling as a symbol of class and stature.
But the COVID-19 pandemic forced a rethink of retail in Japan, a country where sales are tied to so many factors, like experience, location and the intangible ideals of self-expression.
Stepping Up to Take the Lead
As Tokyo entered an uncertain lockdown, many brands weren’t ready for online selling, despite the impact on their bottom lines.
“Our goals are not just to sell the clothing from those brands online, but to reconsider the idea of real shops and to assist their teams to make best use of their abilities. That is our way of helping the fashion brands that are working with us,” said Masayuki Imamura, former CTO, ZOZO Technologies.
Careful inventory planning and pricing strategy are just as important as ensuring a pleasant shopping experience.
Elevating Customer Experience
To accelerate innovation, ZOZO Technologies created teams focused on new customer solutions.
“There are two fields where we continuously invest. The first one is optimization of trying on clothes online,” shares Mr. Imamura.
ZOZO Technologies introduced ZOZOSUIT, where customers take measurements with a smartphone camera. A 3D-model is created instantly, and body measurements are saved on the ZOZOTOWN mobile app.
Up until now, it's impossible to do those things without going to the shop. Our goal is to make the shopping experience easier and for online shopping to become something that's more convenient.
Masayuki Imamura, former CTO, ZOZO Technologies
Other innovations include:
- ZOZOMAT helps customers find the right shoes for every occasion.
- WEAR is Japan’s largest fashion app that offers fashion and styling content. Users can post their outfits as well as search, view and save those of other users. The most popular users with over 2 million followers are certified as a “WEARISTA”.
- ZOZOUSED is an online shop for secondhand/vintage apparel with more than 800,000 items, from 9,000 brands, at any given time.
- Artificial intelligence automatically filters through more than 730,000 items and suggest similar items for purchase.
Mr. Imamura said, “We want to apply big data and artificial intelligence to optimize the shopping experience. We have built ZOZO Research, a center that brings together specialists to conduct fashion-related research that helps bring our vision to life.”
Staying Committed to Digital Transformation
To take a company forward, businesses must understand changing markets and shifting consumer mindsets.
“While our innovations have already helped us to achieve more sales, we are continuing to think about new strategies. Businesses have undergone a big change, and we must change our mindset to meet the challenges head on. The continuation of our business was possible because we accurately predicted the future impact on retail through reversed calculation,” Mr. Imamura said.
When asked what advice ZOZO Technologies would provide to retailers on the cusp of making the decision to digitalize, Mr. Imamura said, “We're here today because we managed to invest in relevant areas. We cannot guarantee what will happen in the future, but our best opportunity is to continue to invest in digital transformation. The more you do it, the better it gets.”
Even as the pandemic hangs over the future like a specter, Japan’s fashion retail is entering a new era, and its future looks brighter than ever.
[1] Between 2015-2017, more patents were filed in Tokyo, Japan, than any city in the world. Source: How Japan is using technology for the 2020 Olympics, World Economic Forum, June 24, 2019.
[2] Virus pandemic pushes Japan’s shoppers to finally buy online, Japan Times, April 10, 2020.