Apple is the publicly-traded company with the highest market capitalization in the world as of 2012, and certainly one of the most idolized. With revenue and total assets each in excess of $100 billion for the 2011 fiscal year, it’s safe to say that things are going reasonably well for the folks at Cupertino. However, the tech manufacturer has come under fire over the past few months by a wave of inquiries into labor practices as well as general ethical performance. In January, a NY Times exposé piece on human rights issues within Apple’s Chinese factories put the company under considerable scrutiny; on June 23rd, the Times tried again, this time focusing on Apple’s US retail compensation system. Based on the writer’s findings, Apple might want to take a closer look at how things are done at Japan’s premier retailer.
Uniqlo, a subsidiary of Fast Retailing Co., Ltd., is one of the fastest-growing apparel retailers in the world. Having started its own line in 1997 to compete with American giants like Gap, Uniqlo is currently aiming to become the world’s number one brand by 2020. Doing so will mean employing aggressive growth strategies and simultaneous expansion into multiple foreign markets. In terms of total revenue, Uniqlo will have to compete with H&M and Zara for shares of emerging markets. Still, the outlook is good, and the upper management remains optimistic with their sales projections. Uniqlo’s revenue per store has led the industry for the past two years.
Both Apple and Uniqlo are somewhat peculiar. Uniqlo is a self-proclaimed “technology company” competing within the fashion industry, and Apple is perhaps the tech firm that prioritizes style the most. Both companies have developed new approaches to retailing that set them apart; their respective products have become commonplace while retaining their desirability. Their corporate cultures, however, are decidedly different. There are a few areas where Apple could improve by studying Uniqlo.
Apple stores are like playgrounds; customers are free to stroll around, trying out gadgets at will. Sales associates — or “specialists,” as they’re called at Apple — have portable credit card readers ready, constantly scanning the floor for people ready to check out. Merchandise flies out at an incredible rate, but the high ratio of customers to staff means that each customer is allotted only a few minutes before being turned away.
Let’s face it, it’s hard to beat Japanese customer service. Training at Japan’s Uniqlo stores goes into great depth on how to treat customers, and it’s no different for new employees at American stores. From role-playing exercises to lessons on how to properly return a customer’s credit card, the Uniqlo training program creates an etiquette-driven atmosphere. So far, Uniqlo’s Manhattan stores have received top marks on customer service from consumer reports. Apple stores got more of a mixed bag, with low ratings from customers requiring repairs. It might be as simple as hiring more people and pushing a more personal approach to customer service at Apple.
Apple store employees are responsible for enormous sales figures. In spite of this — and in spite of the huge stack of cash Apple is sitting on — Apple store employees are paid relatively poorly. Granted, $11 an hour isn’t bad by retail standards, but it’s dismal when you consider that some employees push nearly $3 million of merchandise annually and that most of them hold college degrees. What’s worse, raises are few and far between, and commission simply doesn’t exist.
By contrast, Uniqlo employees are paid rather well. Starting hourly wages for part-timers in Japan is around $15 by current exchange rates, and around $12 in the US. The real perk is that raises are much more frequent — high-performing employees can expect two to three raises a year. And Uniqlo’s steadily increasing number of paid vacation days looks pretty good next to Apple’s draconian absence policy.
This is potentially the most fundamental change that Apple could implement. Under its current system, Apple store employees often find themselves in limbo. Even those who receive modest pay raises are rarely promoted because there are very few management positions available. If an employee does become a store manager, that’s usually the end of the line because Apple doesn’t usually promote from retail to corporate. As a result, even the most enthusiastic “geniuses” may begin to feel the stagnation in their careers after a few years.
Uniqlo, on the other hand, promotes often. Teamwork is paramount, but exemplary employees are often given more responsibility, regardless of their length of experience. Most importantly, retail employees often “go corporate.” It’s common in Japanese companies for employees to cut their teeth at the bottom — in a store or in a factory — before working their way up the corporate ladder. This practice applies in Uniqlo’s stores around the world, and recruiters mean it when they say that you can start as a part-timer and be CEO one day.
If Apple truly wants to redefine its retail corporate image, these are the areas it should focus on. They cannot expect to float on the company’s cult status with fans forever, especially as competitors like Samsung and Google overtake Apple in emerging markets. At the core of a successful retail operation is an effective corporate culture and motivated employees — Uniqlo appears to have both. So while it may seem crazy for the world’s most valuable company to take pointers from a Japanese relative newcomer, it might be crazier for them not to.