Muji’s first Canadian location opened on the Atrium on Bay in the shopping heart of Toronto. The Japanese lifestyle retailer is known for its unbranded, quality, and environmentally friendly merchandise that appeal to global consumers with its minimalist and uniquely Japanese aesthetic. Their entrance into Canada is part of a global expansion that has increased their total global store count to nearly 600 in order to realize foreign growth opportunities.
Muji aims to earn over $10 billion in total foreign revenue by fiscal 2016. Retail Category Consultants visited their first Canadian store to see what Muji Atrium brings to the Canadian market and if the store will help them achieve their goal.
The store interior is dimly lit and cozy, with winding aisles and spotlights beamed at product displays and descriptions. Popular items such as stationary are placed at the interior mall entrance and draw in foot traffic from consumers passing inside the Atrium complex. The storefront is devoted to women’s clothing, gifts, and accessories, and will be a big driver of sales. Well-selected displays, such as a traditional Japanese bed placed by the checkout counter, help bring the Japanese aesthetic to life.
Muji Atrium has around 3,000 products priced in the mid range. Products range from housewares to clothing, and are displayed in neat rows that emphasize quantity and uniformity. What you see on the floor is what is available, and shoppers can scan the shelves for different sizes and colours in stock throughout the entire store. Most products have little variations and have the original Japanese stickers still attached. This is consistent with Muji’s overall merchandising strategy, which focuses on minimalist, unbranded products in a straightforward environment.
Displays and Fixtures
Products made to be used or worn, such as toothbrush holders and clothing, were presented above rows of merchandise. Some items, such as kitchenware, were stacked up to the ceiling beside large displays featuring information on Japanese culinary traditions. More hands-on displays, like an aroma diffuser that allowed customers to try a combination of plant fragrances, attracted a line of curious shoppers.
The store associates were accessible and attentive despite a busy store. A question about shower curtain hooks led to a quick scan of the housewares section, and, when the hooks weren’t found, a few suggestions for alternative merchandise that could serve the same function. While their service was helpful, we thought that this was a missed opportunity since the associates could have used these interactions to educate shoppers on Muji’s values, such as environmental friendliness, quality, and innovative design.
What to Expect from Muji in Canada?
The ‘no brand’ movement among retailers is gaining momentum. Retailers like Abercrombie & Fitch have recently cut their logo from all merchandise sold in North America to capture consumers that increasingly prefer unbranded clothing. Millennial and Generation Z consumers are shifting their spending mindset from “what everyone has” to “what only I have” while demanding more quality and alignment with their personal values. And they are willing to pay for it.
Muji has a firm grasp of this shifting mindset and delivers on these core consumer needs. However, as much of the shopping demographic was East Asian, Muji Atrium’s high foot traffic came mainly from consumers already aware of the brand. To achieve long-term success in the prime Toronto Eaton Center and Bay Atrium area, Muji Atrium must attract and retain customers unfamiliar with the brand, especially given their proximity to popular competitors like Forever 21 and a comparatively small launch and marketing campaign.
Areas for Improvement
Retail Category Consultants recommend that Muji Atrium use their sales associates to educate customers on Muji’s brand values and why their products are different. Curious shoppers walk into the store from the street every day, but won’t make it past the sizeable women’s apparel section and into the rest of the store without Muji’s staff members telling them why they should make the trip through the crowd. At the same time, Muji should continue to optimize square footage and sales per square foot. This means that everything on the sales floor, from the traditional Japanese bed to air humidifier, should be available for purchase.
To increase loyalty, Muji Atrium should strengthen their engagement with consumers in-store and on social media. Their in-store workshop, for example, was a great event that engaged customers. Muji Atrium’s My Bags, which were handed out to the first 1,000 shoppers on opening day, was another example of in-store engagement, but they shouldn’t reserve the freebies only for special events. Engagement should be year-round and put the customer first. For example, instead of just apologizing to followers on Facebook for running out of stock during the busy holiday season, Muji should make it up to the customer by offering them a special discount or the ability to reserve items for pick-up once they replenish their stock.
They can also leverage social media and capitalize on refer-a-friend campaigns, since the store is filled with shoppers and friends that heard about the Muji brand through word-of-mouth. While their store is new, a strong start means a stronger race.
Muji’s appeal in Canada is off to a great start, but only time will tell if Muji has built a loyal community instead of shoppers only after the latest novelty.