ITALY’S NEW PERFUMERY GROUP SEEKING STRENGTH IN SOUTH
Byline: Amy B. Barone
PALERMO, Italy — Pro.Pa.Co., the newest Italian perfumery group and the first retail consortium of its kind south of Naples, has set out to consolidate operations and negotiate better bargaining power with beauty manufacturers before the hungry chains up north work themselves down to the island of Sicily.
Formally known as Profumieri Palermitani Consorziati, the 13-member, 15-door group was formed in May to adapt to changes transforming the Italian beauty market, while retaining the personal service typical of the South.
The group’s chief objective is to fortify purchasing and marketing power. It has engaged a local ad agency to create a logo and slogan that will be used to decorate stores, promotional props and advertising campaigns.
Giuseppe Sanacore, president of Pro.Pa.Co., and Carmelo Camilleri, external-relations director, discussed the group’s philosophy.
Sanacore said, “We had no other alternative. To move forward in the Italian market, we had to join forces. We have to offer a wider range of merchandise and, as a group, we can advertise more frequently.”
Both view Sicily as virgin territory and feel they have an advantage over aggressive chains looking south because of their keen understanding of the local market.
No chains have yet penetrated the island, but there has been industry speculation that the German-based Douglas has its eye on the city of Catania. There, approximately 50 of the 200 stores selling beauty items are considered upscale. But every year store closings strike small operations that have low volume and a limited product range. Camilleri noted, “Purchasing power is lower here. A big retailer in the North will yield half the volume here. You can’t approach this market with a Lombardan mentality.”
The retail landscape in Italy’s Northern region continues to change — to larger spaces, open-sell merchandising and ambitious promotional strategies.
The South takes a more traditional approach to the trade. Perfumeries here are distinguished by counters, assisted self-service and emphasis on the prestige end.
However, Camilleri admits the golden age of perfumeries ended five years ago. Retailers have been pressured to broaden their assortments and offer lower-priced brands like Weruska & Joel’s Compagnia delle Indie bath and fragrance line and Corolle color cosmetics.
Profumeria Camilleri relies heavily on direct-marketing strategies to reach consumers, as well as special newspaper ads in local daily Il Giornale di Sicilia. The paper featured an advertorial-type campaign during the last week of May headed “Beauty School” to promote an in-store Chanel makeup demonstration.
As a group, Pro.Pa.Co. aims to work with beauty companies to augment co-op advertising and distribute monthly flyers. It also hopes to introduce a fidelity card, which will entitle holders to an additional discount.
Camilleri has enriched the group with technical expertise. As president of MIP, the information systems division of Fenapro — the federation of Italian perfumeries in Milan — he helps direct an elaborate project on furnishing sell-through information in Italy, data the market desperately needs.
Camilleri’s perfumery has been computerized for 25 years and four other Pro.Pa.Co. members are automated. Another three plan to install systems.
The in-store network enables Camilleri to monitor spending patterns with a database of 3,000 customers. Each November, he rewards the most loyal consumers with a special pre-holiday gift.
Camilleri plans to expand his 180-square-meter store on Via Donizetti in the near future to accommodate a bigger toiletries selection. The store generated a rise of 16 percent in the mass end in 1996.
Treatment and makeup represent about 38 percent of sales volume at the Profumeria Camilleri, followed by fragrances with 30 percent and accessories and toiletries with the remaining 32 percent.
Fragrance sales grew about 14 percent in the first half of the year, driven by two scents: CK One and Dolce & Gabbana.
All Pro.Pa.Co. members but one are based here, but the group plans to grow outside the region by taking on new members and jointly acquiring stores as long as they fulfill minimum space requirements — at least 100 square meters, with a volume of at least $279,000 (500,000 lire) annually.
In 1996 the group generated retail sales of $8.4 million (15 billion lire).
Sanacore added, “We don’t believe in 1,000 and 2,000-square-meter stores. People still want close relations with stores here, so we’ll always offer assisted self service.”
As for making shopping more entertaining, Camilleri said, “It’s fun now. [Customers] come in as if they’re visiting friends. They let us know how the children are, what the dog is up to.”