ITALIANS TRY BABY E-STEPS
Byline: Luisa Zargani
MILAN — Click-and-buy is still a strange concept for Italians. They’re uncertain about the medium, uncomfortable with the idea that they can’t interact with salespeople and suspicious of the process.
Nevertheless, online sales are picking up, slowly. Backed by enthusiastic financial investors, marketing professionals and experts in computer technology, new e-commerce addresses have emerged that offer a selection of Italian fashion, design and craftsmanship.
“It’s a revolutionary moment, comparable to the industrial revolution, and it’s only the tip of the iceberg,” said Jean Pierre Fabre Bruot, chief operating officer at Net-Research, which last month introduced studiomoda.com. The site offers cashmere ties and scarves from Mantero, crocodile belts from Guglielminotti, fabrics from Ermenegildo Zegna and Loro Piana tailored clothing by Del Mare, Acqua di Parma fragrances, accessories from Accacappa and leather goods and apparel from Piero Guidi.
Net-Research, an industrial group here specializing in e-commerce, was founded by Riccardo Mantero, an heir of the Mantero silk company. Net-Research joined forces with Panton Communications, a multimedia production company, to create studiomoda.com.
“Good service and quick, consumer-friendly procedures were our guidelines in setting up studiomoda.com,” said Fabre Bruot. Service includes guaranteed three-day delivery within Europe and five days off the Continent. “We pay special attention to the quality of the photos, with a close-up view of as many details as possible.”
Fabre Bruot said the company purchases directly from fashion houses, which keep the products in a special stock set apart for Net-Research.
“We decide the final retail prices, but they are in line with market prices, and they are in Italian lire. We don’t play with exchange rates,” said Fabre Bruot, adding that products are not remainders from past collections. “We behave like any other store and also offer special promotions at the end of the season.”
Pietro Di Giacomo, e-shop manager for the project and development of studiomoda.com, said he’s noticed an increasing interest in e-commerce because of continuous media coverage and word of mouth, but companies and customers in general are still wary of cybershopping.
“It took us quite a while to select the labels [to sell] and set up contacts, but fashion buyers, who are obviously well connected, helped us build relations with the fashion houses,” said Di Giacomo. The industry realizes e-commerce offers access to new markets, direct contact with customers and higher margins, but companies are worried they will upset their regular distribution channels.
“Designers have to understand that e-commerce does not compete with, but actually integrates traditional retail networks, and that they have direct control on their products,” said Di Giacomo, adding: “If they don’t sell their products online, someone else will.”
As for security, Fabre Bruot said: “Net-Research emphasizes and guarantees the importance of safe bank transactions and a reliable partnership with a bank here. The transactions are made directly with the bank, and Net-Research never receives any financial information from the customer. The bank clears service, and the customer doesn’t pay until he gets the merchandise.”
At looknbuy.com, banks are not part of the picture.
“For extra security, payments are done directly through the credit card companies,” said Enrico Marinelli, managing director of looknbuy.com. “While the project of looknbuy.com started one year ago, the investors backing the company started defining the payment system in Switzerland four years ago.”
Marinelli said looknbuy.com now lists 350 stores, but plans to add more than 1,000 stores in the next two months.
“The purpose of looknbuy.com is to make products from small and medium-sized companies accessible to international buyers and markets,” said Marinelli.
Looknbuy.com is backed by an industrial investment group. Products include fragrance, jewelry, ceramics, home furnishings, handbags, coral objects from Sicily and Tuscan leather goods. Looknbuy.com handles shipments, guarantees deliveries in five days and accepts unconditional returns. The company plans sales of $1 million each month.
“We haven’t reached this figure yet, of course, because our first store opened two months ago,” said Marinelli.
Marinelli and Fabre Bruot agree that a chunk of money has to be invested in marketing and advertising.
“In the first year, the investment in communication and advertising is 300 percent of sales,” Marinelli said.
Armando Branchini, president of InterCorporate, a luxury goods consultant here, said he has seen interest in e-commerce grow over the past 2 1/2 years in Italy, but that the U.S. still represents around 90 percent of the market. Branchini said his company has been contacted in the past few years by fashion companies that ask him to find good technical solutions to e-commerce problems of fulfillment and customer satisfaction.
“I always warn them, however, that there are two critical points: the advertising costs and the organization of the process the moment they receive an order. If you have an experience with a valid partner and the right technical approach, the risk of losing money is reduced significantly,” said Branchini.
But upscale designers are in a holding pattern.
“They don’t want to make mistakes, but learn from others’ successes and mistakes,” he said. “The Internet is a cold distribution channel, compared to brand boutiques, for example. The Internet does not offer a designer’s whole world, his or her esthetic values and philosophy. Brand stores offer a multisensorial universe; the Internet does not,” he said.
One high-end Italian house has decided to give e-commerce a try. Bulgari will test sales of jewelry and watches on eluxury.com, the LVMH Moet Hennessy Louis Vuitton Web site that will bow in the U.S. next month.
“Since LVMH is so competent in the Internet world, we decided to try e-commerce with them,” said a Bulgari spokeswoman. In addition to Bulgari and LVMH brands, the site will include Pucci, in which the LVMH has a majority stake. Bernard Arnault, chairman of LVMH, announced this month the decision to make Pucci “the number one Italian cyberbrand,” as part of his strategy to revamp the label and build his own Internet empire.
For the time being, Giorgio Armani is concentrating on his sportswear and casual line, selling through his armaniexchange.com site in the U.S.
Stefanel is also focusing on its casual wear, selling T-shirts online. At the end of last year, Stefanel revised its Web site.
“We wanted it to be more graphic and more attractive,” said a spokesman for the company. At the same time, the company decided to test sales of accessories, such as travel luggage and T-shirts on Stefanel.it.
In July, Mariella Burani Fashion Group will test its accessories and fragrances on its fashionweb.net site.
“We will be fully active in September,” said a spokeswoman for the company. In March, Burani purchased 79 percent of SEDOC, which owns 60 percent of Trading, an Internet provider here. The Burani Group, in addition to its own line Mariella Burani, includes labels Mila Schon, purchased by Itochu Corp., and licenses for Calvin Klein and Gai Mattiolo.
In the case of BMG On-Line, which will be launched this summer, Italians will have to get used to two new concepts at the same time: designer outlets and online selling. A year ago, BAA McArthur Glen announced it was going to open the first designer outlet in Italy, with a center opening in September 2000. BMG is a joint venture among several business entities including: BAA (British Airport Authorities); Washington-based McArthur Glen Europe, which runs outlets in the U.S. and Europe, and Fingen Spa, the Tuscan holding company owned by brothers Marcello and Corrado Fratini that manufactures Guess and Calvin Klein jeanswear and has a 20 percent share in Van Cleef & Arpels.
The group announced its “virtual outlet,” BMG On-Line. BMG On-Line will offer a range of products from the 400 companies present at the company’s outlets, including Armani, Ermenegildo Zegna, Iceberg, Benetton, Donna Karan, Calvin Klein, Ralph Lauren, Nike, Reebok, Guess and Gap, among others. Products will be available with discounts in the 30 to 50 percent range.
“BMG On-Line is a natural extension of our activities,” said Joey Kaempfer, president of BMG On-Line. “With our work and our retailing partners, we are able to have a strong presence in the market and, at the same time, easily sustain the challenge set by an effective business online.”