Will Muji, no name brand, catch on in U.S.?

By Nanae Kenmochi

NEW YORK —

Can a Japanese retailer selling furniture, household items and stationery compete in the $4.2-trillion U.S. retail industry against the likes of corporate giants such as Target and Ikea?

The president of Muji USA Ltd, which will open its U.S. flagship store in Manhattan’s Times Square next month, believes that the company can succeed in such a market.

’’I want Muji products to become part of the lives of Americans of all backgrounds,’’ Hiroyoshi Azami, president of Muji USA, said.

The company, owned by Ryohin Keikaku Co, is committed to opening 30 to 40 stores across the United States in the next five years.

Most Americans are unlikely to have heard of Muji before, but the brand is quickly finding a niche among urbanites in New York City where the retailer opened its first U.S. store in SoHo last November.

New Yorkers are also encountering Muji at the MoMa Design Store, a store for the Museum of Modern Art (MoMa), which began carrying its products in 2004.

‘‘I love Muji,’’ Craig Broxton, an account executive for Design Within Reach, a modern furniture retailer, said. The 29-year-old recently bought a black bag and two food containers from the SoHo store. Having first seen the products at the MoMa store, Broxton was drawn to the company’s innovative use of plastics.

Muji, which translates as ‘‘no-brand,’’ is an established brand in Japan for basic everyday items sold at reasonable prices. None of Muji’s 7,000 products, including beds, dishes, jackets, underwear and notebooks, have a logo or are wrapped in fancy, distinctive packaging. In fact it is the lack of a name brand that many find enticing.

Muji’s philosophy is to offer ‘‘good products at low prices’’ by eliminating extra packaging costs that do not impact the quality of the product itself. The concept is to use inexpensive materials overlooked by other manufacturers, avoid over-processing materials and minimize packaging. ‘‘As a result, our products are simple,’’ Azami said.

The concept has driven the popularity of Muji products not only in Japan but also in other Asian countries and Europe since the company’s inception in 1981. Now Muji is aspiring to become the preferred brand for U.S. buyers.

So far in New York City, Muji has enjoyed a good start. The MoMa Design Store has lent prestige to Muji’s name by carrying its products alongside those of world-class artists and designers, such as Charles Eames and Isamu Noguchi. Thanks to the design-conscious consumers of New York, Muji’s SoHo store has quickly become profitable.

If Muji’s goal is to become a niche brand targeting trendy urbanites, it is well on its way.

Azami, however, emphasized that that was not the company’s aim. ‘‘I don’t want to just be accepted by design-conscious people or people who like Asian tastes...I want Muji to be accepted as a generic brand,’’ he said.

While most brands target a certain segment of consumers, the purpose of being ‘‘a no brand’’ is to appeal to all people by ‘‘simply providing products that are comfortable and convenient,’’ Azami explained.

Going beyond an appeal to trend-conscious New Yorkers and moving into the households of average American consumers will pose challenges for Muji as it competes with other big names, such as Crate and Barrel, and Ikea, which offer diverse products at low prices. Target is another formidable rival because it sells products made by popular designers at much lower prices than Muji.

‘‘If all they were doing is bringing in other products that are available at Target or Ikea or whoever, it would probably be a tough entry,’’ Doug Fleener, president of retail consulting company Dynamic Experience Group, explained, but added, ‘‘There’s always room in the U.S. for innovative retailers with fresh products.’’

Often hidden in the seemingly simple designs are functions that make Muji’s products stand out. Its toilet brush, for example, has a small cover to protect water from splashing during cleanups. Their summer sheets are made of special linen that absorbs moisture better than cotton.

Making functions that appeal to consumers

While good design and functionality may also be Muji’s biggest selling point, the trick is translating that into making those functions appealing to consumers.

With minimal advertising, Muji must rely on how its stores ‘‘communicate’’ with potential buyers and how they are enticed by visually appealing yet simple merchandise displays.

At the SoHo store, employees can be seen busily reorganizing shelves to make sure the products are presented as perfectly as possible while consumers are largely left alone to leisurely cruise through the aisles.

‘‘It made me feel like I was escaping from commodity culture,’’ said Jon Beller, a 42-year-old professor who stepped out of the SoHo store on a recent Friday night with his family after shopping there for the first time.

Azami expects the flagship store near the densely populated Times Square area to draw professionals who work in the area and tourists as well. Located in the lobby of The New York Times Building, the store is slightly larger than the SoHo store—and will carry about 2,500 products.

In addition to that new store, Azami is planning to open small outlets in New York airports beginning this year. He hopes to raise brand recognition nationally by exposing the brand to travelers from across the country.

The biggest challenge that lies ahead for Muji is lowering its prices—which is particularly crucial amid the recent economic downturn that has hit the United States. Currently the prices at the SoHo store are about 30% higher than in Japan, which is not consistent with the company’s aim to ‘‘offer good things at low prices.’’

The higher SoHo store prices are due to the extra cost of custom duties as well as the added price of importing products from China to Japanese warehouses and then sending them to the United States.

As the operation expands, Azami said, the company is considering outsourcing some of its manufacturing to plants in Latin America.

Even with low prices, some questions remain as to whether Muji will be accepted widely by Americans from all segments of society.

‘‘I think they are better off staying in major metro-markets,’’ said Vivian Ma, a retail analyst at Oppenheimer & Co Inc, an investment firm in New York. Although Ma counts Muji as her favorite brand, she does not think an average ‘‘55-year-old traditional taste person’’ from small-town America would shift his or her brand preference.

The difficulty of expanding into American suburbs can be learned by the experience of Uniqlo. The Japanese clothing retailer opened a store in the New Jersey suburbs in 2005 and two more later on. Eventually all three closed down.

‘’There’s no brand recognition so people didn’t understand our brand,’’ says Keiko Yamamoto, a spokeswoman at Fast Retailing Co, the brand’s parent company. In contrast to its business outside of the city, she pointed to the success of Uniqlo’s flagship store in Manhattan that is located just a few blocks from Muji SoHo.

Muji may do well in ‘‘New York, Chicago, San Francisco,’’ said Fleener of Dynamic Experience Group. ‘‘But as you get into the mid-level cities, is there enough of a population base who will be wanting that design? I’m sure that’s something they’re out to learn.’’

Latest 15 of 22 Total Comments Show All

telecasterplayer at 01:09 AM JST - 3rd May

I don't get it. How is anyone going to notice Muji in Manhattan, one of the most-congested, least accessible places in the U.S. where 90% of the population never goes? And since the furniture and knick-knacks look exactly the same as Ikea, the Container Store or Scandinavian Design, what's the draw?
OssanULTRA at 05:33 AM JST - 3rd May

I've been to the Muji store in Soho Manhattan 3 times. Every time it's been jam packed with people. Meantime, a few blocks up Broadway there's a UNIQLO which is also jam packed but at least has 2 floors. I don't see Muji competing directly had on with a company like IKEA because of sheer amount of inventory the latter carries. On the other hand getting through the cash register at IKEA is a freaking nightmare and I'd never do it if it werent for the meatballs and the funny furniture names.
ToughGuyBanker at 08:28 AM JST - 3rd May

No chance. Some uni kids might like it in New York or San Fran, but that's it. The fact that they opened in New York ("We're so international!!!") instead of somewhere like Texas or New Jersey says a lot. They know nothing about the US market.
ToughGuyBanker at 08:28 AM JST - 3rd May

No chance. Some uni kids might like it in New York or San Fran, but that's it. The fact that they opened in New York ("We're so international!!!") instead of somewhere like Texas or New Jersey says a lot. They know nothing about the US market.
njboy13 at 01:54 PM JST - 3rd May

westurn-IKEA has been in the U.S for quite a while now
njboy13 at 01:55 PM JST - 3rd May

In New Jersey there is no tax on furniture and clothes whereas in New York it is close to 9% so the New Yorkers shop for clothes,etc. in New Jersey!
njboy13 at 02:03 PM JST - 3rd May

sorry furniture is taxable, but food and clothes aren't
unscrejects at 08:45 PM JST - 3rd May

This typical Japan - we saw it in Japan so it definitely can't exist anywhere else in the world. The problem is that most of these things Japan wants to export are taken from outside! Hell, Homer shops in the generic aisle...
Weasel at 10:31 PM JST - 5th May

getting through the cash register at IKEA is a freaking nightmare

Almost half the "fun" as finding a place to park, or navigate your vehicle in the parking lot. Guess this is why they offer that early morning breakfast upstairs at all of their mega stores (prices are cheap...just to make you forget the hassle of shopping)
rjdsr at 02:32 AM JST - 6th May

It's doubtful that Americans can appreciate the subtlety of the design and Japanese principles such as mottainai.
OssanULTRA at 05:04 AM JST - 6th May

Oh you'd be surprised how many of us here think that spending $400 on a desk at Muji instead of $200 at IKEA is mottainai.
Altria at 10:49 AM JST - 6th May

I doubt it, their stuff's pretty dull.
capone at 03:52 PM JST - 6th May

another word for 'japanese aesthetic' is 'BORING'
Ah_so at 05:02 PM JST - 6th May

Muji missed its chance - it moved into Britain half-heartedly over a decade ago, but the stores were too small - a few clothes, a few nick-knacks and prices a bit too expensive.

I shopped a muji in Japan, where the styles suited me and the prices were reasonable, but I was in there a few days ago and the fashions looked a bit drab and over-priced.

If I do not go there for clothes, I am hardly likely to head there for a bit of stationery, am I?
anczelowitz at 03:57 PM JST - 13th May

"Toughguybanker" has absolutely no clue what he's talking about. Muji's foray into US retailing must be done in a major metropolitan city such as New York so as to generate buzz and publicity. Muji then can then move on to opening in San Fran, Chicago, L.A and other metro markets before creating enough national awareness so that they will be able to succeed in the smaller markets.....By the time that happens they will have had adequate time to have resourced closer mfrs. in nearby S.America and their pricing will be substantially lower and more attractive for those smaller markets. As someone who has been in retailing for years, I can assuredly tell you that Muji will indeed find its niche and become a success story in the States; primarily with their clothing basics, home/travel goods, and stationery.