The encyclopedia · Marketing & Brand · Marketing decision · 2018–2019
ZOZO gave members 10% off everything — and its own brands revolted
ZOZOTOWN launched a ¥3,000/year membership with a standing 10% discount. Apparel brands called it a devaluation of their merchandise. It lasted five months.
ZOZO · Start Today · 2018-12
What happened
On 25 December 2018, ZOZO launched ZOZOARIGATO, a paid membership for its ZOZOTOWN fashion marketplace. For ¥3,000 a year (or ¥500 a month) members received a 10% discount on every purchase. Founder Yusaku Maezawa framed it as a thank-you to loyal customers.
The brands selling on ZOZOTOWN reacted immediately. A standing 10% discount, they argued, trained shoppers to wait for the member price and eroded the perceived value of full-price merchandise. Several major fashion and jewellery brands threatened to leave the platform or actually withdrew.
Membership sign-ups fell short of expectations. On 25 April 2019 — four months after launch — ZOZO announced ZOZOARIGATO would end, closing the service on 30 May. Maezawa conceded that ZOZO had 'done too many new things' at once. The retreat coincided with a pullback from ZOZO's private-label push and overseas expansion.
Why it happened
- A marketplace that discounts everything taxes its own suppliers: the 10% came out of brand margins and brand equity simultaneously.
- The membership was launched without securing buy-in from the brands whose products filled the catalogue.
- ZOZO was fighting on too many fronts — private label, overseas, measurement technology — and the membership became the easiest thing to cut.
The lesson
A marketplace's loyalty programme is funded by its suppliers' brand equity. Discount everything and the suppliers leave before the members arrive.
Sources
- CNET Japan: ZOZO、有料会員サービス「ZOZOARIGATO」終了
- ZOZO corporate news: ZOZOARIGATO membership service closure (25 April 2019)
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