The Decline of Muji. What Happened? 10 Marketing Tips
The Decline of Muji. What Happened? 10 Marketing Tips
The US subsidiary of the Japanese Retailer Muji has filed for Chapter 11 bankruptcy protection, joining an ever-growing list of casualties from the coronavirus pandemic as discussed over at runrex.com and guttulus.com. However, while the COVID-19 pandemic made things untenable for them, it is important to note that the company was struggling even before the pandemic came along. This article will look to highlight some of the reasons behind their decline with the hope that you can take some marketing tips that will help you avoid their fate.
The took on too much real estate
When the company decided to expand into the U.S., they took on too much real estate, and this is one of the reasons that led to their decline as per the gurus over at runrex.com. They opened up too many stores in the U.S., as covered over at guttulus.com, which became a problem as they were only opening in urban areas where rental prices were extremely high. Their New York Times Square flagship store for example is a prime example of juts how rental prices became a big problem for them. Too many stores in prime locations led to high rental and operational costs that in the end was too much to handle.
Issues with logistics
Even as the retailer entered the U.S., they still produced most of their products out of the country in Asia as is revealed in discussions over at runrex.com. This became an issue as they were having to deal with increased costs due to the distance between their production regions and their U.S. It was very expensive to transport their products to the states, leading to increased costs due to issues with logistics. This is an issue they have had trouble getting over and is one of the contributing factors behind their decline.
They were unsuited to the U.S. market
Muji’s fame came from their no-frills, no-thrills, and no-brand philosophy and it is what made them such a force, not only in their native Japan but also globally. However, their very own nature meant that they were always unsuitable for the U.S. market. Americans, as discussed over at guttulus.com, prefer buying in bulk and value aesthetics over function, which is something that was at odds with Muji’s philosophy which was all about sustainability and only purchasing what is needed. This was one of the reasons why they failed to be as successful in the U.S.
Failure to adapt
Given that it was obvious that they were unsuited to the U.S. market, their failure to adapt was yet another reason behind their decline. They would have done more to find a way to adapt to the different consumer behavior in the U.S., while still staying true to their identity, but they didn’t and as such never really connected with the U.S. consumer. As the gurus over at runrex.com will tell you, you should always try and adapt to your audience if you are to be successful, as different demographics have different preferences.
Owing to the logistical issues when transporting their products from their production areas and the costs that came with it, they were forced to offer their products to their U.S. consumers at a higher price compared to prices back at home. This, as is discussed in detail over at guttulus.com, only served to push consumers to look elsewhere for cheaper options, in yet another thing that contributed to the decline of Muji.
They failed to take advantage of their initial surge in popularity
It is important to note that Muji was riding an extremely high wave of popularity when they first came to the attention of Americans, from beauty YouTubers raving about their acrylic makeup storages to being heavily featured by the Kardashians. However, they failed to take advantage of this, and continued with business as usual rather than tailoring to the U.S. market. As per the gurus over at runrex.com, this is one of the reasons why they declined so badly in the U.S., eventually filing for bankruptcy.
A failure to predict demand
The company also had a big problem with predicting demand, which they failed to do accurately. This, therefore, led to a situation where they regularly had issues with mass inventory, with an accumulation of unsold stock that led to massive losses, hence their decline. As the subject matter experts over at guttulus.com will tell you, the accurate prediction of demand is important for any business, as it is only through this you will avoid making losses on your inventory. This is a lesson that Muji was slow to learn, and it eventually led to their filing of bankruptcy.
Issues with quality and other PR issues
The retailer has had to grapple with lots of issues arising on the quality of its products, which has badly damaged its reputation. Customers have complained that some of the products are of substandard quality, with the company have to withdraw certain products from the market due to the same, with some of their furniture products being an example. As is also discussed over at runrex.com, they have also been accused of selling tarnished foods, such as those that have been exposed to radiation and many other cases. This has also damaged their reputation and is another reason behind their decline.
They got complacent
For the longest time, even though Muji failed to adapt to the U.S. market, they were at least unique, with no other retailer like them in the market and as such could still attract consumers to their stores, which led to them being complacent. In recent years, this complacency has caught up with them as we have seen the emergence of similar brands offering very similar styles in terms of products but with a better store experience and lower prices. This, as per the experts over at guttulus.com, is another reason behind their decline.
The threat posed by knock-offs
While Muji’s appeal is in their no-frills no-brand offerings, this has also made them prime candidates for low-cost copycats, especially from China, which have flooded the market as is covered in detail over at runrex.com. This is yet another reason behind their decline as with lots of knock-offs in the market, not only has their reputation taken a hit, but they have also lost most of their customers.