Growth Strategy

Growth Strategy

3 pillars of the strategy

In April 2021, the Group announced its 3 pillars of the strategy, which aims to diversify its profit structure that does not depend on the Gross Merchandise Value. The Company aims to expand profit opportunities by maximizing the use of its unique customer base, information, know-how, technology, and other assets, as well as the EC business, which the Company has been operating since its foundation.

1. Increase traffic from other than "BUY"

- Evolving ZOZO to the place "for" fashion, from the place "to buy" fashion -

The Company intends to utilize its measurement technology to diagnose the user's bone structure and personal color type, which will then be linked to an outfit model. The data generated from this process will be used to personalize items, colors, and sizes that are tailored to the user's preferences. Furthermore, the Company plans to offer personalized product information and user interfaces, optimized for each user, by leveraging a vast array of information assets, including browsing data and purchase history.

2. Step into the "Production Support"

- Supporting brands from further upstream, in addition to fashion and apparel sales support -

The Company has taken on a variety of unprecedented businesses, including operating the private brand "ZOZO", the MSP business that offers items in multiple sizes designed by brands on ZOZOTOWN using body shape data measured by ZOZOSUIT, etc. Leveraging the expertise gained through these ventures in demand analysis and production base, the Company now offers production support, planning, and proposals for brands. This creates a system where the Company and brands cooperate in planning, production, inventory management, and sales.

3. Try "technology licensing sales"

The Company aims to license its measurement technology and related intellectual property rights, know-how, and measurement data to industries beyond fashion. To support this strategy, the Company established ZOZO NEXT, Inc., a professional organization dedicated to innovation and R&D, with a focus on enhancing collaboration with overseas subsidiaries to achieve global innovation.
The Company consolidates the intellectual properties resulting from R&D at each base and manages them through a specialized unit. The Company also actively contributes its own vast data and technology to the academic and industrial sectors and promotes R&D to develop a more convenient platform and enhance services.

Medium- to long-term policy to expand Profit

The Company group announced its medium- to long-term growth strategy in April 2023, with a focus on expanding profit opportunities while leveraging the continued growth of ZOZOTOWN.

Increasing profits in the e-commerce area

1. Attracting a broader range of customers

ZOZOTOWN has developed its services and promotions focusing on consumers in their late teens to early 40s. Moving forward, ZOZOTOWN will expand its target to consumers in their late teens to 50s, aiming to further increase the number of active members.

2. Improvement of frequency of purchase per customer

Based on the results of a questionnaire survey conducted in FY2022 among active members of ZOZOTOWN, it was found that ZOZOTOWN is used for approximately one out of every five fashion and apparel-related purchase opportunities. In order to further enhance the platform, we will continue to expand our brand lineup and improve personalized suggestions through data obtained from the "niaulab by ZOZO" initiative. Our aim is to make ZOZOTOWN an even more appealing platform, thereby increasing the frequency of fashion and apparel-related purchases by customers.

3. Expansion of categories other than fashion, apparel, and cosmetics

As of March 2023, we mainly handle products in the apparel and cosmetics categories. Based on the needs of our customers, we will consider handling new categories.

Increasing profits in areas other than e-commerce

1. Expand support for brands by supplying the made-to-order model

Since its launch in September 2022, "Made by ZOZO", our production support platform, has received high praise for its ability to enable brands to sell products without inventory risk and offer a wide range of color options, among other benefits. We will continue to expand the number of participating brands while enhancing production capacity and efficiency, with the aim of increasing wholesale profits.

2. Monetization of technologies

Our body shape and skin tone measurement technologies and assets, including ZOZOSUIT, ZOZOMAT, and ZOZOGLASS, have garnered significant interest from companies across various industries. As we move forward, our focus for future expansion is centered on ZOZOFIT, which has been expanding its services in the U.S. since 2022.

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