Courtesy: Fortune Character Magazine, China, January 2015 issue, pgs. 58-59.
Despite a long-running political and economic crisis with negative
repercussions on consumer confidence, Italy’s luxury goods industry has largely
escaped the fate of the other consumer goods categories. The Italian luxury
industry continues to see positive performance thanks to the sustained demand
of tourists visiting the country, increased investments in flagship store
development and a strong local manufacturing base characterized by a myriad of
small and medium-sized entities. These facts have fueled the positive (although
slowing) growth rates of brands like Giorgio Armani, Prada, Brunello Cucinelli
and Tod’s. The overall breadwinner in Italy turned out to be the worldwide
market leader in middle and high-end eyewear, Luxottica, owner of Ray Ban and
Oakley sunglasses, among numerous other fashion brand licenses.
Although most people think of Italy only in terms of fashion and leather
goods, the food & beverage and design (furniture and fixtures) industries
have continuously and creatively introduced new high-end products to the
international marketplace. Companies such as Cappellini, Kartell, Boffi,
Poliform and Natuzzi are continually creating and introducing the Italian style
into homes around the world. The world’s most important furniture and design exposition
continues to be the annual springtime fete Salone del Mobile, uniting the
worldwide design community not only in the exhibition but throughout the entire
city of Milan. Increased attention on behalf of the Italian government, thanks
to the 2015 Expo to be held in Milan (following the 2010 edition in Shanghai)
and having food and the environment as its key themes, have also increased the
importance of the overall country’s luxury industry.
Made in Italy continues to be an important theme driving the growth of
quality-oriented companies. In fact, entering what many call a “new normal”
phase of international business, characterized by diminished growth rates,
shifting exchange rates and political turmoil, many Italian luxury brands have
been reacting more quickly to mature market demand shifts and reassessing
strategies in explosive development markets like China. The most attentive and
fast moving brands among the pack have insisted on back-shoring its production
from China (and other Far East countries), preferring the craftsmanship and
creativity, as well as the manufacturing costs, provided by Italian workers. At
the same time, other SouthEast Asia markets like Malaysia, Indonesia,
Philippines and Thailand, are representing the latest wave of growing incomes seeking
out to buy the most luxurious of products.
A quick walk about the top tourist destinations of Milan, Rome, Florence
and Venice sees continued growth in the number of Chinese visitors, but at the
same time an insufficient know-how in the level of services provided for them
by Italian retail establishments and services. Italian brands and their stores
are still second rate compared to the service levels of London, Paris and
Zurich, for example, with regards to user-friendliness, experience and
efficiency. Chinese speaking salespeople are still a rarity at most Italian
luxury brands in Via Montenapoleone in Milan and Via Condotti in Rome while
Italians still need to get to know its Chinese clientele better. A quick stop
into Italy’s top department store, La Rinascente, shows only the top French
brands such as Dior and Louis Vuitton having Chinese speaking salespeople.
Italy, in general, also needs to promote its various regions and territories to
visit, while increasing its relationships with the main Chinese tour operators
which manage the growing number of visitors to Europe. The Italian luxury tourism
industry needs to work harder in order to provide more satisfaction nd serenity
during the stay of Chinese visitors in Italy, even moreso now that the Russian
consumers are practically non-existant.
One city that has welcomed Chinese visitors in a unified and structured
manner is Venice. Having one of the best university programs for studying
Mandarin Chinese and thanks to its long-time ties to the Orient, Venice is the
perfect example of how culture, food and shopping all come together in a
harmonious way, even to the Chinese. No wonder that LVMH owned DFS Group, the
operator of duty-free shops, is planning to open its first mall in Europe inside
Venice’s 13th century building called Fondaco dei Tedeschi. This
building will house 8,000 square meters of retail space, enclosing LVMH’s house
brands, but also local artisans and promoting local and international art
culture through exhibitions. Scheduled to open in 2016, this historic building
in the Rialto bridge area of Venice will house on the ground floor Italian and
international fashion & accessories, the second floor men’s fashion &
accessories plus watches & jewellery, while on the third floor there will
be a high-end shoe salon (the first of its type in the city) and a broad
fragrances & cosmetics offer. The
target audience for the Fondaco is considered to be “the world traveller”, and
should not have a singular focus on Asian or specifically Chinese travelers
because Venice is a melting pot of visiting nationalities, from Europeans to
Americans to Asians and Middle East visitors. DFS Group is planning to add a
few more outlets in Europe during 2016 and is looking at France, Italy and
Switzerland.
But the city of Milan has not backed down to this challenge and
capitalizing on Expo 2015, beginning on May 1, Mr. Giorgio Armani has been
named special ambassador to the opening of the Universal Exhibition. He will
organize a special runway show to celebrate the 40th anniversary of
his company and on the same night will inaugurate its new Armani/Silos. This
art exhibition space will be located in a former Nestlé factory, facing the
fashion company’s headquarters on Milan’s Via Borgognone. Here Armani will
install a permanent exhibition of his fashion and drawings, plus provide space
for upcoming designers to showcase their creations.
Another intiative transforming the attractive style of Milan is the
creation of a shopping street entirely dedicated to menswear. Thus, to counter London’s Savile Row, famous
for traditional menswear and bespoke tailoring, on January 17th Via
Gesù in Milan will become the Via dell’Uomo (tr. Mens Street) and include brand
flagship stores like Caruso, Brioni, Kiton, Luciano Barbera, Barba Napoli,
Doriani Cashmere and Stefano Ricci. The project aims to promote the elegant
street, home also to the headquarters of Versace and located right in the
middle of the city’s fashion district, called Quadrilatero della Moda, as an
unparalleled stopover for an international clientele of male shoppers.
Shoemakers Barrett, Doucal’s and Silvano Lattanzi all sport flagship stores on
the same street. In response, even top international fashion brands like
Versace and Prada, better known by the general public for their womenswear
collections and accessories, have joined the likes of Armani and Ermenegildo
Zegna to increase their share of menswear sales.
Today’s definition of luxury has changed. There is an increased
attention to individuals and their specific lives, as opposed to just hedonism
and flaunting for the sake of appearance. People seek meaning to their lives
and would like to find their reason for being in this complex and fast-paced
world. Innovation, technology and design all help to make lives more
meaningful, comfortable and simplified. Today’s Italian luxury brands are
beginning to provide plaforms upon which the consumer can feel cared for with
transparency and functionality.To see the Mandarin Chinese version of the article, see the January 2015 issue, pgs. 58-59.
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