3 Insights from UNIQLO’s Growth Hack

Hello Internet, it’s Bryan from Tutum. I’m Tutum’s resident Growth Hacker and I wanted to share what I think is one of the greatest growth hacks I’ve seen outside of the Internet.

My girlfriend recently came to visit in NYC and since we’re both huge fans of the Museum of Modern Art (MoMA) we decided to go on a Friday and to our delight and surprise we happened upon what’s called UNIQLO Free Fridays. Every Friday admission is free for all visitors from 4:00pm to 8:00pm.

Looking at UNIQLO’s website, this is a multi-year sponsorship that started May 3, 2014, and was previously held by Target. Here are three things that I learned from UNIQLO and their decision to take over this role as sponsor.

Screenshot 2014-05-20 12.05.04

 

First Insight

Partnering with another brand allows you to inherit their image and reputation.

A great piece of advice from Seth Godin who came to speak to us at Techstars ties directly into this. People are going to talk about your brand/company/product whether you want them to or not, and they’re usually going to do it in a couple of sentences. You can either sit back passively and let people create their own phrase about you, or you can give them the exact phrase you want them to use. You may not be able to control whether people will share you through word of mouth, but you can help shape what they say if they do share you.

 

Screenshot 2014-05-20 12.06.11

 

I’m actually already a fan of UNIQLO but this made me see an entirely new dimension to their brand. In my mind they already had certain attributes mapped to them. They used to include “innovative, cheap, stylish, product focused” but by offering free admission to thousands of people every week they’ve added “community, giving, awesome, and generous.” With their new association to MoMA “cool, artistic, and edgy” come to mind as well. Partnering with a Museum, not to mention one of the most well-known in the country is a great move. Now UNIQLO has effectively tied their brand to one of the coolest museums in the world.

When people describe UNIQLO, even if they’ve never been to the store to shop before, they can now say “they’re awesome, they gave me free tickets to MoMA, you should totally go on Friday,” and that’s huge. Not only have they strengthened their brand with their current customers but they’ve allowed non-customers to become advocates.

 

Second Insight

People don’t have to be customers in order to be advocates.

If you’re interested in growth, your job is to explore and identify the various growth levers at your disposal. You start realizing that acquiring new users is extremely context sensitive. For example a brand that I really like is Darn Tough wool socks because they come with a lifetime guarantee. If they ever rip or wear down you can send them back to the manufacturer and they’ll send you a brand new pair. If they could gain exposure to new customers for $1 each at a Tough Mudder race (really fun race if you can find some friends to do it with), this would probably be profitable for them. These racers enjoy being rough on their equipment and would probably find value in something they never have to worry about “breaking.” However, if they were to go to a tech conference it would probably be a large waste of money, because it’s not their target audience.

 

Screenshot 2014-05-20 12.07.51

MoMA is the perfect target audience for UNIQLO because a large percentage of people attending MoMA probably care about fashion. I have a mental picture of the typical MoMA attendee and of the typical UNIQLO shopper, and I think there is a lot of overlap. I’m sure the marketers at UNIQLO saw the same opportunity.

UNIQLO is not only having potential customers exposed to their brand, but allows them to share the brand in a positive way. They can tell their friends, which is meaningful, because they are probably similar enough to fall within UNIQLO’s target audience. Now all of a sudden UNIQLO is building two viral channels into their customer acquisition funnel.

The first viral channel is helping existing customers reaffirm their belief that they made the right choice in shopping at UNIQLO (I’m glad I shop at UNIQLO, they’re doing good in my community and I love MoMA). The second viral channel, which is possibly even stronger, enables non-customers to share the brand with no prior exposure (just got back from checking out MoMA, thanks for the free admission @UNIQLO!).

This results in a lot of people being exposed to UNIQLO, and the likely scenario of being exposed to the brand multiple times by different people. Since museum-goers are probably friends with other museum-goers, this can be extremely powerful in converting a non-customer to a customer.

 

Third Insight

Conversion doesn’t happen all at once.

Most people interested in their companies growth will come to bow to the key performance indicator (KPI) Gods one time or another. Most every growing company will say they’re “data driven, data informed, powered by analytics” or some other catchy phrase that shows they’re doing their due-diligence. However, conversion doesn’t occur in a vacuum.

Customers are coming with preconceived notions of what they’re looking for, of what you provide, how that fits into their world view, what they ate that day, how they’re feeling, how much time has passed since they last posted a picture to Instagram, and is it too early to post another? There are just too many factors to control, and that are more importantly, out of our control.

What’s great about UNIQLO’s growth hack isn’t that they are making immediate customers of everyone they provide free admission to. What they ARE doing is creating more impressions of their brand. I know what you are thinking, “who cares? I don’t want impressions, I want clicks/purchases.” I know in my experience with purchasing things, I almost never buy the first time I land on a website or go into a store. It’s almost as if I have a little progress bar that goes from “completely unfamiliar” on one end to “buy” on the other. I have a bunch of other progress bars too, where the end result may not be “buy,” but instead “share, research, get opinion from friends, and promote.”

 

ProgressBars_GrowthHacking_blog

 

These progress bars are all impacted and filled at different rates, but they are all fueled by the same thing: impressions. Positive impressions move the bar toward full, and negative impressions move the bar back towards empty. What’s rare here is filling an entire progress bar with just a single impression. What’s the last app that you downloaded on your phone? Did you download it the first time you had a chance? If you’re like me you already have 4 pages of apps that you don’t even use. The progress bar for me to download and try a new app is pretty long, and it is only becoming longer.

Here’s what is required for me to download a new app: it takes me discovering the app, friends telling me about it, reading about how it’s so wonderful and different from other apps out there, reading positive reviews on the app store, and only now will I finally download and try it out. A lot of this stuff is impossible to track, but each step is meaningful and critical for me on my journey to becoming a user of that app.

UNIQLO is moving the progress bars on all of the their customers, prospective customers, and non-customers. And why do non-customers matter if they are never going to become customers? Sometimes non-customers can be your greatest evangelist because they have no “ulterior motive.” They will bring up your brand in conversations with people in your target audience that you would otherwise never reach. I know that I’ve recommended products/brands that I’ve never used, just because I thought they were so great.

These are a few of the insights I learned from UNIQLO. I hope you found this useful for your business or it helps spark an idea to try. Even if you’re not a “growth hacker” there is probably some project you have that you wouldn’t mind getting a little more web or foot traffic to. Or maybe you know someone who would benefit from talking about growth.

Right now I want to know what you think.

Did I leave something out?

Have you tried reverse engineering another’s strategy for growth? How did it work out?

Let me know what you think by leaving a comment.

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Posted in General, Growth, Startup
15 comments on “3 Insights from UNIQLO’s Growth Hack
  1. Duncan Bell says:

    Very interesting! The case study of UNIQLO and the MoMa is a great example of how an outside the box approach can really grow a business.

    • Bryan Lee says:

      Thanks Duncan, and I definitely agree. I think there’s a mental divide between “traditional marketing” and “scrappy startup marketing,” but I think they are both just tools in the toolbox. There’s no reason why larger brick and mortar type businesses can’t adapt and use tech startup strategies and vice versa.

  2. Miu Eng says:

    Uniqlo is quintessential Japanese design – beautiful simplicity with functionality. Modern art is still too abstract for most people to understand and appreciate. I thought the Target sponsorship was a good fit, but Uniglo can push their merchandise in the MoMA store, a real win-win for both, this is a case of 1 + 1 = 3.

    • Bryan Lee says:

      Thanks for the comment Miu. I also think this partnership between UNIQLO and MoMA is a better fit than with Target. They have an entire UNIQLO section in the MoMA gift shop and it doesn’t seem out of place at all. Another interesting partnership that MoMA recently announced is with Kickstarter, which I think is another big win/win situation where the brand image is improved for both parties.

  3. EAT MKTG says:

    Ever since visiting Tokyo in ’07 I have been enamored with Uniqlo. They exemplify the quintessential concept of simplicity and style at an affordable price. The partnership with MoMA is brilliant and your article is fantastic. If you aren’t familiar with “Contagious” by Jonah Berger go get it. He like Godin talks a lot about why things go viral and especially using other brands to elevate your own. I believe that brands are starting to realize that whoever spends the most isn’t the best. It’s nice to see the companies are going back to the basics to engage with their customers.

    Great post!

    Thanks

    • Bryan Lee says:

      Thanks! Will definitely have to check out Contagious. I’ll make it next on my read list, thanks for the recommendation. Anything related to psychology and how things spread or why we do things really interests me.

  4. Excellent analysis Brian! Thanks! I think this is the key point: “…people attending MoMA probably care about fashion.” – Uniqlo understands their audience and chose a great partner. It’s also a good look for MoMA to align with a growing, relevant brand that appeals to a young audience – very cool.

    • Bryan Lee says:

      Thanks Ray. I think the Uniqlo – MoMA partnership helps both brands much more than the previous Target-MoMA partnership. I guess what will be interesting to see, is if they both agree to renew their partnership when the contract expires.

  5. Patrick Deane says:

    Great read, really good insight here.

    This comes at an interesting time for me. I’m currently consulting for a leading UK bank and over the last couple months I’ve seen the evolution of a proposed (an eventually failed) partnership between two huge brands. The partnership would have consisted in the bank funding large-scale refurbishment of one of the UK’s football (or soccer…) stadiums in exchange for a marketing deal with the stadium owners and the English football league that would have ultimately let to a change in the stadium’s name: “[leading UK bank] Stadium”, much like New Jersey’s Metlife Stadium or DC’s Fedex Field.

    Over the half-year, various consulting firms presented business case after business case containing impressive analysis on the effect the partnership would have had on “mentions” of the bank — Line graphs and projections showing that the deal would lead to an X% increase in the number of times the bank’s name was said. At the time I was impressed by the statistics the consultants were able gather, but after reading your post, I realize that they missed an important piece of the equation: The quality of those mentions.

    The insight of yours that resonated the most with me is exactly that point: People are going to be talking about your brand, steering that conversation in your favor can have powerful effects on your business. In the case of my bank, I think that too little time was spent on analyzing this effect. Even a slight change in conversation from “Oh right, [leading UK bank], weren’t they responsible for the financial crisis?” to “Have you seen what [leading UK bank] has done with the new stadium?” would go a long way in changing people’s mindsets towards the brand, with, what I believe, would be a significant impact on bottom line.

    Of course, with what the refurbishments would have cost, the bank wasn’t ready to take that kind of risk. As one of the senior directors put it: “People change their spouse more often than their bank account”. This makes it drastically different than the UNIQLO case, where the investment is significantly less and the customer base is much more elastic.

    Anyway, definitely looking forward to more and fingers crossed for the team as you approach D-Day!

    • Bryan Lee says:

      That’s really interesting to hear about consultancies talking in just terms of mentions. I think this is a vanity metric, a metric that can only make you look good. This would be analogous to just increasing the page views of a website.

      This may seem good, but like you mentioned the quality of these views is what really matters. The percentage of people who are actually interested in the service you provide could be much lower.

      Great to hear about this sort of stuff from the financial side though!

  6. Luke Duncan says:

    This is awesome. Just wondering, do you think that MOMA keeps track of the number of people coming through and invoices Uniqlo? Or Uniqlo pays upfront fee and allows anyone access?

    • Bryan Lee says:

      I have no idea, but I’d imagine they pay an upfront fee. It would incentivize UNIQLO the most to market it if they just paid a regular fee that didn’t scale with the number of guests.

  7. I don’t get how this is “growth hacking.” This is a classic advertising sponsorship. Nothing new or interesting here.

    • Bryan Lee says:

      Hey Esteban, “growth hacking” has different definitions to different people, but I really like how Brian Balfour describes it as a blend of marketing, product, and engineering (http://www.coelevate.com/essays/growth-vs-marketing-vs-product). In this respect I think UNIQLO has blended these silos well.

      If you visit their store they have their landings between the first and second, and second and third floors dedicated to female and male merchandise ranging from socks, scarves, shirts, pants, sweatshirts, basically an entire line from head to toe dedicated to MoMA. They sport artwork from MoMA, MoMA’s name and logo, and other art references that shows that UNIQLO has really thought about all parts of the growth funnel as opposed to just looking at awareness and acquisition.

      I can see how this could be slotted as a classic advertising sponsorship, but I know that I learned something interesting and new from it, and hopefully others can too.

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