MILAN — Omnichannel is still a thing, as Italian fashion brands continue to bank on online and brick-and-mortar retail strategies to pursue a balanced growth trajectory.
This was the main takeaway from the latest study issued by Netcomm, the Italian digital trade consortium, which was unveiled Tuesday, here during the annual Netcomm Focus Fashion & Lifestyle conference organized in partnership with Fashion magazine.
According to the agency, the number of global e-shoppers will reach the milestone of two billion people this year, up 11 percent compared to 2017. In terms of fashion and lifestyle product purchases, the study estimated online sales to reach 435 million euros in 2018, up 15 percent compared to the previous year.
“The market is expecting a shift in the business models due to the online [revolution],” said Roberto Liscia, Netcomm president and executive board member of Ecommerce Europe. Presenting the study, Lisca highlighted that China and the U.S. represent the main drivers, accounting for 54 percent and 28 percent of total online sales, respectively.
Home delivery, loyalty programs and customization are pivotal to engage these new digital-savvy customers, according to the study, which highlighted that customer relationship management, an omnichannel integration and investment in the IT sector are key assets to drive the digital growth.
“Each company’s marketing strategy should take into account the brand’s positioning and its best fitting blueprints,” insisted Lisca citing click and collect, self-selection and social engagement, as among the most required tools. Google Italia’s industry head of retail and fashion Alessandra Domizi agreed, noting that “we are living in the age of assistance, [a concept] that should be implemented into retail,” she said. Along with Google’s own voice assistant Google Home, the executive pointed to a number of projects backed by the company including Zalando’s Gift Finder Assistance service, Gap in-store augmented reality experience and Ralph Lauren’s digital dressing room.
Fashion companies are finding their way to propel their digital penetration with the aim to increase the turnover from online sales. Roberto Serafini, general director of L’Oréal Luxe Italia, said the company is “investing a lot to target our goal of reaching 20 percent of global online sales by 2020, with 50 percent of our customers online and 100 percent of our brands’ portfolio available,” adding that according to internal data women who normally use makeup related mobile apps are inclined to make beauty purchases online 2.7 times more compared to those who don’t.
According to Serafini banking on digital growth requires investment in different fields including h.r., with L’Oréal “bridging the traditional marketing towards the 3.0 phase, implementing more than ten digital-related job titles.” L’Autre Chose recently appointed chief executive officer Alice Carli agreed, noting that “business and innovation are made by the people working within the company and the goal today is to be able to set the internal communication as well as the employees training programs as fast as a WhatsApp [message].”
“The real challenge is to find a balance between keeping the historical value of Made in Italy but in a contemporary landscape,” Carli added. Production-wise, many executives at the conference saw the digital revolution as an opportunity. To wit Roberta Benaglia, Style Capital founding partner and ceo, contended “the Italian fashion pipeline can be an advantage from an operational point of view, allowing you to produce let’s say only 100 pieces of a custom-made product, with which you normally reach a 90 to 95 percent sell-out rate before the sales period start.”
As reported, during the conference Benaglia said Style Capital has acquired a 30 percent stake in California-based denim brand Re/Done. The value of the operation was not disclosed.
Although online sales are a growing channel, 63 percent of purchases are still made at brick-and-mortar stores, according to the Newcomm study. “Digital platforms provide the right space to introduce the brand and the collections [to the audience], but they normally account for 5 to 10 percent of sales, most importantly they are useful tools to bring people to the physical stores,” said Andrea Di Nicolò, global communication and marketing director at Gilmar Group, which manufactures and distributes the Iceberg and No. 21 brands.
“The wholesale channel is still relevant in Italy and brick-and-mortar stores are still crucial despite the market stagnation,” echoed Pietro Negra, ceo of Cris Conf Spa, the company manufacturing and distributing the Pinko brand. The executive was cautious noting that fashion companies are challenged to improve their marketing strategies, try to limit unsold items and enhance their sell-through rate.
The Netcomm study highlighted that self-payment methods, real-time customization services and, most importantly, trained sales assistants are the most important factors enhancing the customers’ experience in physical stores.
Negra also highlighted that “the retail space extension is no longer enough and needs to be backed by a [customers’] database,” since outlining the clients’ profiles is a brand’s pivotal need. “Digitalizing the value chain helps speeding up the product’s cycle from design departments to the [store’s] shelves. In this perspective, data are a resource for production as well,” Liscia added.
Alessandro Varisco, ceo of Twinset, shared the same feeling as he insisted that the whole fashion pipeline has to “adjust to keep up with a digital-driven world,” because the business “has become a three-headed animal, with wholesale being eroded both by retail and digital [sales],” he added.
Italian contemporary fashion brands were a key topic to this year’s conference as Netcomm commissioned the “Digital Competitive Map Contemporary Fashion 2018” study from advisory firm ContactLab. The study outlined the digital performance of 20 contemporary brands taking into account around 190 criteria including digital penetration, cross-channel strategies and social media-driven sales, among others.
Although contemporary brands lagged behind luxury players in almost every category, the best performing brands were awarded with three prizes: Best Global Digital Reach gained by Furla; Best Digital Customer Experience received by Patrizia Pepe, and Best Overall Digital Proficiency, which was bestowed on Pinko.