MILAN — Never take anything for granted. Not consumers, not customer experiences and especially not four Millennials with a bold idea.
Wagner Eleuteri and Michele Fontolan have known each other for a long time but decided 18 months ago to spice up their friendship by embarking in a business venture together, as they conceived Stamp, an app dealing with an issue close to their status of Italians residing abroad: tax-free transactions.
“Michele [Fontolan] worked for Uber in Dubai, while I lived in New York. Living abroad we noticed the system of tax-free shopping and refunds was a broken one,” said Eleuteri, who also manages the American business of the namesake high-end vintage jewelry retail chain.
In particular, both Eleuteri and Fontolan lamented the difficulty tourists have in claiming their refunds as tax-free procedures in stores are slow due to paperwork, interminable long lines for refunds at the airports and intermediary agencies withhold high fees up to 50 percent of the value added tax itself, which is 22 percent in Italy.
Starting from personal experiences, which had them often never completing the procedure and just forfeiting their money, Eleuteri and Fontolan saw digitalization as the key to solve their issues and speed up the process, granting a better customer experience for foreign travelers. The addition to the team — Stefano Fontolan and Federico Degrandis, who previously worked at Airbnb and Suitsupply, respectively — and the financial support of international investors from Dubai and Hong Kong put the idea in motion.
Free both for shoppers and retailers, the Stamp application enables foreign customers to skip the usual paperwork, as all their data is digitally saved in the app. Through the platform, at the moment of purchase, the shopper doesn’t pay the VAT but buys an item directly free of tax.
Therefore the refund is effective immediately and with no commissions paid to intermediaries and no money wasted in currency exchanges. In addition to saving time and skipping queues at the airport, this encourages shoppers to invest the saved amount in other purchases in town, fueling retailers’ business and the overall tourism flux in Italian cities.
“Intermediary agencies have been able to create a standard, an assumption that [getting back] 10 to 12 percent is better than zero, but we are breaking it,” Eleuteri said.
The digital approach is also in line with the needs of the evolving consumers, especially mobile-driven Chinese and Middle Eastern Millennials.
“We want to empower merchants, giving them a tool to keep the experience they offer up with the times and able to attract consumers to brick-and-mortar stores. It’s an additional asset for retail, which has been suffering lately,” Eleuteri said.
Officially launched at the end of April, Stamp is mainly operative in Italy. The free application has been downloaded 2,000 times, counting 500 international users coming from Asia — China mostly — the Middle East and Switzerland.
Store-wise, the digital platform now enlists about 200 retailers across Italy, mostly independent and multibrand units operating in fashion, design, food and jewelry, including the Nardi jewelry in Venice and Gmt in Milan, among others. By the end of the year, additional big luxury names are expected to join the network, which will also be expanded to other European countries.
For the founders, it’s all for the sake of customer experience. “I come from high-end retail…and for me customer experience is providing clients with a contemporary experience, suitable to the kind of purchase they’re making. So far, the tax-free experience clashed with the one in-store and the image of luxury and glamour associated with big brands,” noted Eleuteri.
Based in Milan, the Stamp headquarters count 10 members. Michele Fontolan underscored how the other founders’ former experiences also contributed to the project. His work at Uber taught him “to see problems as opportunities….As taxis, tax-free has been taken for granted for years, while we insisted on creating a different business model in a market that functioned in the same way for years.” From Airbnb his brother brought in the importance of hospitality while Degrandis’ experience in Suitsupply was channeled to develop the software and put speed for payments and for the creation of accounts at the core of the project.
The ultimate goal of the start-up is to create duty-free districts in town. “All the brands invest to have the best corners in the airports, but their urban units are objectively their main, bigger stores, with a wider product selection and even more exposed to tourism. Why pay for corners when you can secure purchases already in town?” Eleuteri said.
In particular, Stamp has a significant rollout in Como, where about 60 retailers are using the application and founders are “working to create the Como tax-free district” there.
But what’s in it for the Stamp team? While it is currently free, by the end of the year, the app will launch a premium account for customers.
“Within a certain amount of shopping, which is 400 euros, the app remains free. Then it will upgrade customers to the premium account, which means there’s a 10-euro fee to pay, but once in while, not per invoice but for trip,” Michele Fontolan said, adding that for total purchases exceeding 5,000 euros the fee will be 20 euros, instead.
“We can keep these fees fixed and competitive as we don’t have physical units in airports, counters or lounges. Our magic sauce is digitalization,” he added.
On the contrary, the founders noted how some intermediary agencies have done “heavy but old-style” investments in real estate, opening said lounges and developing corollary services. “For us, the real luxury is not going to the lounge in the first place,” said Eleuteri, noting that these spaces are designed to make queues for refunds more tolerable, while not needing refunds and saving time are the real assets of the Stamp digital platform.
There’s little doubt the direction taken from the Stamp team is in sync with the times, as, starting from Sept. 1, also Italy’s Customs Agency embarked in digitalization, making the issue of electronic invoices on tax-free purchases by foreign shoppers mandatory.