Vision

Explore your style. Make you delighted.

We have continued to take on every challenge through fashion based on our corporate philosophy of "Inspire the world. Deliver joy every day." In fiscal year 2023, we have begun to see the results of the "Explore your style. Make you delighted" initiative newly added to our "More Fashion x Better Fashion Tech" strategy, and we are beginning to feel a positive response to the "clarification of 'one's style'". We will continue to provide ZOZO's unique solutions by connecting fashion, technology, and people.

Review of FY2023

In fiscal year 2023, we set Five Growth Strategies: (1) Attract a wider range of customers, (2) Increase in frequency of purchases per capita, (3) Production support by streamlining made-to-order through DX, (4) Expansion of non-apparel categories, and (5) Technology Monetization, and have actively challenged these strategies.

The first Growth strategy, "Attract a wider range of customers," was implemented targeting younger customers and family customers, etc., and the recall rate of ZOZOTOWN improved. These and other aggressive promotions were effective, and both gross merchandise value and operating profit reached record highs.

In the second strategy "Increase in frequency of purchases per capita," we have not limited to "selling," but also focused on "communicating" to customers before they make a purchase, aiming to continue to be ZOZO as the place “for” fashion. In addition to providing services such as the Ultimate personalized-styling service "niaulab by ZOZO" and the YouTube channel "niaulab TV by ZOZO" to increase touch points before purchasing, the outfit-sharing app "WEAR" was launched in May of this year, In May of this year, the outfit-sharing app "WEAR" was reborn as "WEAR by ZOZO," an outfit-sharing app that "lets you search for what looks good on you" by introducing new functions and contents that show the "genre trends" of fashion preferences. In order to deliver such a styling experience to more people, we will continue to utilize AI, and by combining ZOZOTOWN data and "niaulab by ZOZO" user data, we aim to create a world where anyone can enjoy fashion.

Regarding the third strategy, "Production support by streamlining made-to-order through DX," we have expanded production facilities through "Made by ZOZO," a production support platform launched in September 2022, and have steadily grown the number of production models by 307% and the number of pieces produced by 136% compared to the previous year. We will continue to focus on achieving more sustainable production with the goal of zero inventory risk for brands.

In the fourth strategy, "Expansion of non-apparel categories," since our full-scale entry into the cosmetics market in March 2021, we have focused on expanding our cosmetics specialty mall, ZOZOCOSME. 23.6% of ZOZOTOWN active members purchase cosmetics, and the number of new purchasers is steadily increasing. In fiscal year 2023, we finally surpassed our goal of 10 billion yen in gross merchandise value and the cosmetics specialty mall grew to 11.3 billion yen. We have already set the direction for our next challenge, and we are committed to achieving results.

In the fifth strategy, "Technology Monetization," we have seen significant progress: technology, one of ZOZO's strengths, has further evolved to the point where measurements can now be taken with the same level of accuracy without the need to wear the ZOZOSUIT, a 3D body measurement suit. As a result, the number of downloads of the "ZOZOFIT" application, a body management service currently offered in the U.S., has more than tripled, and we feel that it has become a useful tool for business as well. In Japan, "ZOZOMETRY," a service for streamlining measurement operations for corporate clients, was launched for some businesses in April this year. This is a system in which body data is measured using the "ZOZOSUIT" and a scanning application, and the measurement data is shared with the business side.

Strengthening Management from an ESG Perspective

Two years have passed since the first materiality was formulated, and we have reviewed the materialities that are of high importance to both our stakeholders and our company in accordance with changes in the environment and our company's business situation. (*) addition, we have also updated the sustainability four key actions in accordance with the external environment and our progress, although the focus of these initiatives has not changed significantly. (*)Announced in August 2024

１．Strengthening Supply Chain Due Diligence

We have mapped the importance of "Corporate Governance”, "Addressing climate change" and "Respect for human rights," those of which are included in this year's materiality, at a higher level than in the previous year, as we have sensed an increase in demand from investors and other stakeholders compared to two years ago. And as an initiative, in May of this year, we conducted a questionnaire survey of our business partners as part of our supply chain due diligence to ascertain the actual situation. Although we have not yet been able to confirm the status of all our business partners at this point, we will work together with them to make improvements after confirming the current situation to ensure that the environment and human rights are being complied with.

2. Improving employee happiness

With regard to "Improving employee job satisfaction," which is positioned as a highly important materiality for our company, we are striving to create an environment in which all employees can fulfill their potential. We have a diverse workforce with expertise in fashion and technology, and we create new solutions every day under the slogans "Imagine the unexpected.Chart the unexplored," "Make a difference every day," and "With Love," which represent ZOZO's mindset. In this fiscal year, we are working on "Reviewing current operations" and "Focusing on important operations" in order to achieve higher productivity. In order to bring to fruition the new businesses that we have been sowing over the past few years, we will increase our sense of speed by making selections and choices on a daily basis, and aim for a state of sustained growth. Diversity, equity, and inclusion" are also essential for the future growth of the company. We intend to continue our efforts to promote the advancement of women in the company, employment of people with disabilities, and awareness and understanding of LGBTQ+ issues.

3. Aiming for Sustainable Local Communities

In order to put into practice our "Fostering the Next Generation and Strengthening Cooperation with Local Communities (tentative)," which is deeply connected to our company culture, we are also working on environmental issues and community development.

In addition to the "2030 Carbon Neutral Declaration," which calls for reducing greenhouse gas emissions (Scope 1 and 2) from our own business activities to virtually zero by 2030, we aim to achieve "Net zero" emissions (Scope 1, 2, and 3) from our entire supply chain to virtually zero by 2050, which includes our introducing renewable energy to our headquarter and logistics centers "ZOZOBASE", and more than 90% of our sites are now powered by renewable energy. In addition, there is the "2024 problem in logistics" caused by the limitation of drivers' working hours this year, and we have also been working to reduce the burden on delivery drivers and CO2 emissions by introducing "Slow Delivery" in August 2024. Emissions from product delivery account for one-third of our Scope 3 emissions, and we cannot achieve "Net Zero" without the cooperation of our business partners, in addition to improving the efficiency of our own delivery. In the future, we intend to propose solutions that are optimal for ZOZO, logistics companies, and consumers, while considering the shift to modal shifts and asking users for their understanding in solving current logistics issues.

Since our establishment, we had been committed to contributing to the local community, and since relocating our headquarters to Nishi-Chiba in 2021, we have been even more vigorously engaged in activities to contribute to the community and support the next generation. We have set a goal of "By 2030, Contribute to the revitalisation of local communities, by 'connecting' with one million next-generation people under 20 years old," and we have been giving classes to educational institutions reaching 108 schools, and providing donations and support, mainly in Chiba Prefecture. As a result, we were able to connect with 270,000 young people. We will continue to strive to provide our expertise and support to empower the young people who will lead the future and help to boost local communities.

4. Governance Initiatives

One year has passed since we transitioned from a company with a board of corporate auditors to a company with an audit and supervisory committee in June 2023. In June of this year, the Board of Directors became more diverse, with more directors with a wealth of experience and a wide range of insight in areas such as marketing and sustainability, and discussions at Board meetings have become more active as various viewpoints are brought in. In addition to the Board Meeting, we have also established a "Strategy Review Committee" where directors discuss with each other what we should work on from a long-term perspective. The SDGs Promotion Committee, which I chair, has met 25 times by July 2024. Based on evaluations by an external evaluation organization, we have continued discussions and promoted initiatives to strengthen governance, including policy development, information disclosure, and linking ESG indicators to executive compensation. We will continue to strive for transparency-conscious management with a sense of responsibility as a TSE Prime-listed company.

To Our Stakeholders

As a platform provider, we will continue to use technology to connect people, and aim to be a trusted presence in the fashion industry and in the community. We will also boldly take on the challenge of solving environmental and social issues related to the fashion industry, which is facing a major turning point, and will work together with our stakeholders to resolve these issues through initiatives that are uniquely ZOZO.