The ZOZOSUIT and private-brand bet — and retreat (2018)

An ideal of solving the “inconvenience,” and a grand bet on execution

The heart of this decision was not a response to financial crisis but an attempt to solve head-on, with measurement technology and its own products, the root inconvenience that dogs online shopping: that the size does not fit. Having reached the summit of the consignment mall — taking in other companies’ brands to sell — ZOZO deliberately turned itself into a maker, aiming at the world apparel market through the doorway of body-shape data. The idea itself appears to have been an advanced one, striking straight at the weak point of online retail.

Yet the flood of orders unleashed by giving the suits away outran the capacity to produce and supply, and before any verdict on quality or fit had settled, the discounting campaigns ended up damaging the trust of partner brands. A gap had opened between the grand ideal and the execution, supply network and partner relationships needed to carry it — and that, it appears, is what led to the first profit decline since listing and to the retreat. The big bet, drawn in a single stroke on President Maezawa’s magnetism and speed, left in vivid form the question of what to invest in at a plateau of growth, and how to coexist with the partners you already depend on.