MILAN — Is the Internet the new Wild West? Digital platforms offer countless opportunities but there are risks that need to be taken into consideration as regulations on several fronts are few and far between. Prada chairman Carlo Mazzi exclusively talked with WWD about the group’s approach to all things digital ahead of the second “Shaping a Future” event to be held in Milan on Nov. 20, exploring the relationship between sustainability and digital innovation, and once again in a partnership with The Schools of Management of Politecnico di Milano and the Yale Center for Customer Insights. Miuccia Prada and her husband Patrizio Bertelli, who share the chief executive officer title, have been vocal about research into more ecological materials and investing in sustainable industrial complexes surrounded by greenery and vineyards. Choosing his words carefully and conveying his personal interest in the subject matter, Mazzi here joins the conversation, one that revolves around the topic of the event, “Shaping a Sustainable Digital Future.” The relationship with the customer has become ever more central and the chairman explains how Prada is focusing on building and developing it, but, in the end, he underscores that, despite the technological innovation and the changes in the industry, product and quality are what the customer comes back to.
WWD: What prompted Prada to focus on sustainability with a dedicated event?
Carlo Mazzi: As a public company in Hong Kong, it is mandatory to pay adequate attention to sustainability. That said, it could just be a formal rule, but beyond that, there are reasons, subjective, of an ethical nature and driven by the world outside. Consumers are developing a different sensibility compared with the past, and today the theme of sustainability, in all its very different forms, is a fundamental principle, especially for the new generations but also for the older ones. Subjective and objective needs to converge, because, even if someone were so selfish to not think about sustainability, to stay on the market, they would have to respect the consumers and their demands.
WWD: What has sustainability meant for Prada so far?
C.M.: As a company, we pay attention to waste, to saving energy and recycling. In terms of land preservation, please allow me to say we are leaders. The large majority of our plants are set up on recovered old industrial areas trying to improve the location and when we’ve built new sites, we’ve worked thinking of the quality of the workplace and of the integration of the buildings into the landscape on top of everything. Consider [Prada’s plant in Tuscany] Valvigna as an example. We’ve paid attention to sustainability in terms of the respect of people, gender, rights, age, and so on — we employ more women than men…We’ve contributed to the development of the company and its shareholders not only in financial terms but also culturally. Here, too, I believe we have done a lot and, again, because it’s fundamental for ourselves. Fondazione Prada has always been conceived as more than a sponsorship; a way to study, learn and update our cultural sensibility as society and style evolve.
WWD: Why did you choose to focus on digital sustainability for this cultural appointment?
C.M.: We must and want to dedicate attention and resources to the theme in general and this is shared by the Prada board of directors. It’s important to reflect on sustainability and the best way to do that is to talk about it. It can be done in private among friends after dinner or in public stimulating a debate, and this is the way we want to proceed, so last year we decided to involve Yale and the Politecnico. As the saying goes, try to talk with someone better than you, otherwise it doesn’t help. That’s why we looked to some of the best universities.
WWD: What was the feedback you received after the first conference?
C.M.: It was positive, and based on this we decided to continue and hold a second edition, trying to find a different subject matter but linked to our work.
WWD: Could you give us a preview of the event?
C.M.: There will be two round tables and one keynote speech with Nicholas Negroponte [chairman emeritus, MIT Media Lab], so a person of great relevance but also very “simpatico” and communicative.
The theme is digitalization and sustainability, consistency and risks, or conflicts, to better put it. It’s a subject that regards our sector because all brands are revolutionizing the relationship with customers — it’s a theme that is very much of the moment.
On the one side there is the digital revolution, which is negatively affecting many companies, but at the same time it also offers enormous possibilities, creating new activities and stimuli to the economy. On the other hand, we see the risks and problems that are connected to this revolution. Privacy is an example, but more complex is the question, how much is digitalization a tool to manipulate people? We are not talking only about criminal acts, frauds or a negative influence on young people, that is also a problem. But there are problems that are geopolitical. Digitalization is responsible for the destruction of confidence in the institutions. It can be revolutionizing or traumatic, it can build consensus that is extremely demagogic and it can lead to manipulation.
With the concept of “post-truth,” you question the concept of truth. This is a phenomenon that has not been invented by the Internet but one that through the Internet is largely applicable.
Today, with digital tools, the concept of trust goes beyond the institutions. It’s a great risk, and it’s a problem connected to this phase of transition as there are no rules yet to regulate this tool that is so powerful. As an example, think of the Wild West, it was an opportunity to discover new territories, but there were no rules. I am not saying we have to shut down the Internet, it’s a great territory open and rich, but it requires an effort of cultural evolution and to find new rules to manage it and to avoid the biggest risks.
Everything stems from this new attitude of the customer, this new relationship of trust. Who did the customer trust in the past? The salesperson or the store owner, who would make suggestions and talk about the quality and the materials. Today customers have skipped this step, they look on the Internet, they see a lot of things, they compare information, sometimes they get confused, like those who go to the doctor [after having checked their symptoms online]. And then they go to the suppliers — that’s us. We have to take note of this and be part of this kind of language and attitude and also convert our collaborators. They must be more open-minded, have a more thorough knowledge of the products and their use, of what maybe once was not as relevant. We must work very hard to seize and be in charge of the systems, to better understand the customer, and how different that customer is, start a new dialogue with this new language.
WWD: The company and Patrizio Bertelli himself have admitted there has been a delay in selling online compared to a number of luxury competitors and some problems in identifying the brand’s customers.
C.M.: We started late but we are recovering. Luxury in general was late — the reason? Snobbism, because the industry felt depositary of the style, of the privileged relationship with customers and there was an objective and key problem, which was that of the locations. Luxurious stores, sophisticated and trained salespeople were essential and to transfer the exclusivity of a store to the Internet and a small screen, which did not differentiate a store on Via Montenapoleone from one on Corso Buenos Aires [a popular mass market shopping street in Milan] was difficult. There were prejudices but this uncertainty turned out to be useless and wrong, because the new customer, independently of wealth and social status is interested in the Internet in the same way, so it’s a matter of understanding how to be online without diminishing one’s offer.
E-commerce is perhaps not as important as in other sectors but as a stand-alone way to create a relationship with customers, it is very important.
WWD: What are the biggest risks connected to the Internet and the digital tools?
C.M.: The risk is to use it in ways that are not correct and not efficient. We have to integrate this tool, which allows us to elaborate a lot of data, with the right training of our employees — there is no standard way to train our workers. There is still a lot to do.
WWD: Miuccia Prada and Patrizio’s son Lorenzo Bertelli has been appointed head of digital for the group, so this is quite a signal of the channel’s relevance for the company, isn’t it?
C.M.: The fact that a resource, who is so important for us, the son who intends to be part of the company with a long-term and significant involvement, is dedicated to this sector as his first task, is noteworthy because we consider this the most important factor in this moment, but we should not forget that the product is the basis of loyalty. It’s not only about digital communication; loyalty passes through quality and product, otherwise the customer won’t come back.