The Markets in which the UNITED ARROWS Group Operates

Markets in which the UNITED ARROWS Group operates

The UNITED ARROWS Group classifies the apparel market into two broad categories: the volume market, which mainly consists of relatively low-priced daily clothing, and the trend-conscious market, which is for consumers who are highly sensitive to fashion trends. The main thrust of the Group’s business activities is directed toward the latter trend-conscious market. As such, our customer base is made up of consumers who have a strong interest in and want to enrich their lives through fashion. Specific operating activities are driven by an awareness of this customer segment.

It is said that the basic trend-conscious and new basic trend-conscious segments within the trend-conscious market have expanded as the consumer societies in Europe and United States have matured and the trend toward digitization has gained momentum. In the future, Japan’s market is also expected to mature and increasingly mirror the market structures of Europe and United States as a result of various factors including changes in consumer values. As far as UNITED ARROWS LTD. is concerned, the Company will promote a medium-term strategy that is geared toward addressing these market structural changes as outlined in its Medium-Term Vision announced in May 2017.

Market positioning map

Market positioning map

*1 GMS: General Merchandise Store

Changes in the Company’s customers

In addition to the market in which the Company operates, UNITED ARROWS LTD. has also witnessed a significant change in its customers over recent years. These changes have impacted the assumptions made when putting in place the Medium- Term Vision.

1. Changes in the value customers place on clothing

The marked polarization of consumption that is impacting a variety of fields is spilling over into the apparel market. There are signs that the value individual customers place on an item is growing increasingly diverse with a clear and astute distinction being made between favored and necessity goods.

2. Changes in the way customers purchase items

Online activities are also progressing at a rapid pace in the apparel industry. With a strong emphasis on convenience, customers are increasingly able to lay their hands on a desired item, in a shorter amount of time, thanks largely to innovative technologies and a growing distribution network. Meanwhile, the effective use of e-commerce channels is also helping to reaffirm the added-value of physical stores.

3. Changes in the way customers spend their money

The amount of money previously spent on clothes has declined in recent years as customers’ purchasing patterns have expanded to include an increasingly diverse range of items and services. For its part, the UNITED ARROWS Group will enter into fields that extend beyond apparel in a bid to address the expectations of customers who hold the Company in high esteem.