GENERAL RECAP

LET’S WALK BACK OUR PATH: FROM LUXURY DEFINITION

TO DIGITAL REVOULTION

FEBRUARY, 2018

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FASHION-LUXURY INDUSTRY OUTLOOK

• 2,4 Trillion USD: Global Fashion System Market Value in 2017

• It means like the 7th world economy after: USA, China, UE, Japan, Indian, UK

• 65.000 (Mln/USD): Italy fashion system (textile, leather goods, apparel, shoes)

Source: McKinsey, The state of Fashion

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FASHION-LUXURY INDUSTRY OUTLOOK

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FASHION-LUXURY INDUSTRY OUTLOOK

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WHAT DOES LUXURY MEAN?

• Let’s summarize so far….

• Luxury, expression of a brand and a product, always includes exclusivity, handcrafted quality, artistic contents, and international scope. Those elements are able to carry emotional value for consumer.

• This process can be referred to different levels: that’s why we speak about levels of luxury

• At every level of luxury we are never in the field of necessity but always in the field of emotions.

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WHAT DOES LUXURY MEAN?

AND NEVER FORGET…..

WHATEVER IS LUXURY LEVEL WE ARE CONSIDERING WE ARE ALWAYS TALKING ABOUT A BIG MINORITY OF THE POPULATION,

WE ARE ALWAYS TALKING ABOUT A NICHE OF COSTUMERS.

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WHAT DOES LUXURY MEAN?

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Luxury

Affordable Luxury (Entry Level)

Affordable Luxury Pyramid

Affordable Luxury

AFFORDABLE LUXURY • In summary…

• We can talk about accessible luxury when we refer to goods, in the field of fashion and luxury, addressed by companies communication and distribution strategy to a relatively large segment of consumers.

• We can talk about affordable luxury when we introduce price as an argument of a further segmentation, and this factor starting approximately from early 2000 created an increasing demand (and an offer), of aspirational goods at reasonable prices.

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FASHION AND LUXURY

• In ananonymous environment, fashion creates a horizontal differentiation not vertical as luxury. Therefore, there is more than one fashion; there are enough fashion for everyone to differentiate themselves and to integrate themselves into their tribe, even at a low price

• Luxury cerates a hierarchy cleared by democracy

• Fashion creates a social differentiation to escape the anonymous urban crowd

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20TH Century: democratization

Democratization implies that social stratification is gradually

disappearing. It is not merely that the poor can assume the

trappings of the rich, but that rich and poor are meeting in

the middle. This assaults the very core of luxury - such that

when all people are equal, there is not point in seeking

objects that communicate distinction.

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One thing to remember

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One thing to remember is that wealth and luxury has always been a major sociological issue in society, which has to do with social stratification, the notion of practical utility and waste, and decisions about the distribution of wealth. It is a politically charged issue, even in the present day, much of which hearkens to the early and primitive civilization.

STYLE

CEO

ITNFORMATION

TECHNOLOGY

FINANCE & LEGAL

HUMAN RESOURCES

ENGINEERING &

GENERAL SERVICES

COMMERCIAL

& BRAND

RETAIL REGION E-COMMERCE

& CRM

INDUSTRIAL CUSTOMER

SERVICE &

LOGISTIC

LICENSES FOOD

MANAGING DIRECTOR

MARKETING &

COMMUNICATION

COMPANY STRUCTURE GENERAL

CEO

STYLE: Creative Director • A Creative Director's job is to reinforce or recreate the

brand aesthetic. They are the creative brain of the brand who is responsible to come up with concepts, inspiration and colours based upon what will appeal to the market. Next, he/she communicates these ideas to the design team.

• Once the design team creates based on this “direction”, they meet with the creative director who approves or asks them to make changes or revise concepts. Typically, he/she oversees various stages of design and production before making the final approval of what will go to market.

• Usually, if the brand has a certain design aesthetic, the creative director will keep in theme, but with their own twist. Some brands on the other hand may be looking for a creative director to do a complete revamp.

• They can, but usually they may design a special item or ensemble for an event such as the MET GALA

• Typically, you would start off as a Fashion Design major for a Bachelors degree. Next, you would go to graduate school to study for a Masters Of Arts .

• Well, they start off as a fashion designer developing their portfolios and building their professional reputation. For the career track of a Creative Director you would begin as a design assistant-junior designer- senior designer-design director.

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Alessandro Michele, Gucci Creative Director

MARKETING: Marketing Director • Like all marketing directors, fashion marketing directors need to be able

to recognize emerging trends address to them to costumers. In this career, you use skills in advertising, design, retailing, purchasing, planning and promotion. You also need to understand distribution chains and pricing methods. Related job titles include visual merchandiser, fashion importer, fashion promoter, store planner and retail buyer.

• According to the U.S. Bureau of Labor Statistics (BLS), most careers in fashion are found in large cities, such as Los Angeles and New York (www.bls.gov). International opportunities may exist, too, because the fashion industry has a global reach. Marketing skills are so important in the fashion industry that many designers receive some kind of formal training in this area, reported the BLS.

• Marketing directors in general need at least a bachelor's degree, and many have a master's degree. You can find programs that focus specifically on fashion marketing, although availability isn't widespread. These programs can teach you about fashion styles, design, retail buying, management and merchandising. Internships can help you gain real-world experience, and you might be able to travel to fashion meccas, such as Italy or France, during your studies.

• Business and communication skills are important if you want to work as a fashion marketing director. You need to be able to recognize what customers will want before they want it, and you need to be creative and able to work with others. Additionally, you should understand profit loss management, marketing trends and merchandising. You may need to gain work experience in the field before being promoted to the higher position of fashion marketing director

• Degree Required Bachelor's degree Education Field of Study Fashion, marketing, general business, promotions Key Skills Communication, creativity, decision-making, business savvy

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RETAIL: Store Operation Director • Responsible for the daily operations of all stores of an organization on a

country-wide basis. Builds scalable, sustainable operating capabilities in the country. Oversees key projects and initiatives implemented in the store environment. Partners with other departments of the organization to develop strategic initiatives designed to drive growth, profitability, financial efficiency and operating capabilities. Develop and ensure strategies. May also manage multiple relationships in different brands to accomplish strategic goals.

• Typical Responsibilities Include:

• Develops strategic initiatives designed to drive growth, profitability, customer satisfaction and/or productivity.

• Oversees the implementation of these initiatives within the retail store environment.

• Identifies opportunities for continual improvement in the daily operations of the field.

• Partners with other functions to define, prioritize and implement strategic projects and initiatives in support long-terms operation strategies.

• Oversees the development and implementation of total store solutions designed to continuously improve all in-store processes and enhance the customer experience.

• Works with different teams to design programs, methods and practices those are executable and effective at the store level. Leads across multiple levels, departments and divisions to ensure seamless, integrated store solutions.

• Works with all levels of brand leadership to educate, advocate and drive operating efficiency.

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RETAIL: Visual Merchandising Director

• Plans, directs and oversees all merchandising aspects for the organization. Interprets company mission statements into assortment plan and sets policies for product categories. Develops overall merchandising strategy, inventory strategy, and major launches. Manages and trains merchandising managers.

• Typical Responsibilities Include:

• Develops and implements merchandising strategies for the designed product family or region.

• Analyzes businesses and direction in all product categories.

• Oversees the development of products and sourcing of vendors, factories and origins.

• Keeps informed of product trends and market news through attending major shows and liaison with relevant parties.

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Challenges and Opportunities

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Challenges and Opportunities

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New Patterns for Fashion industry

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GLOBAL ECONOMY CONSUMER SHIFT

New Patterns for Fashion industry

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THE FASHION SYSTEM

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Global Economy

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Consumer Shift

• Consumer needs and behaviours will likely become more sophisticated, more technology-driven, and harder to predict than ever, with fashion companies striving to keep up.

• Today’s consumers are “always on”—better informed, better connected to others, more demanding, and more conscious of values and authenticity—and yet perhaps more unpredictable

• The driving forces behind their behavioural changes are the availability of information and accessibility of brands, as well as the desire for personalisation and connection to deep-rooted values

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How The Fashion System is reacting?

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Which is growth prospective for 2017? • 2017 is expected to be a year of organic growth. • Gone are the days of growth driven by store expansion; • Next year, we should see brands focusing on like-for-like sales, increasing

domestic demand, and growing through value rather than volume. • Indeed, the “race for space” is long over. The traditional means of fast

growth—geographic, channel, and/or store network expansion—have been exhausted, as those few companies still stuck in the old paradigm are discovering to their cost.

• Further, a decline in retail space productivity and price increases o set by the use of promotions have also been threatening growth.

• As a result, we believe that in the next year successful companies will be those that focus more tightly than ever on organic growth, particularly through branding and developing their local clienteles.

How The Fashion System is reacting?

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And how about technology impact? • Technology investments will have

two ration- ales. • First, the clear market trends—

cycle acceleration, omnichannel, localisation, and sustainability—pull in different directions: they cannot all be delivered simultaneously without a technological enhancement across the whole value chain.

• Second, technology will also be seen as the solution to addressing sourcing and supply- chain challenges in an effort to improve margins.

How The Fashion System is reacting?

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And finally… • The need to adopt a

digital process effectively will presumably place added pressure on creatives across all market segments to take up new tools—from virtual design to virtual sampling—to increase efficiency and integrate design-to-cost.

What is marketing?

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“ I see no small car in the parking!”

ACTIVITIES TO CREATE AND MANTAIN STABLE RELATIONSSHIP WITH RELEVANT SUBJECTS

CLIENTS

Dealers and final customers

SUPPLIERS

Important (es. limited materials– Gore-Tex)

LICENCEE

Glass, watches, fragrances…

FRANCHISEES

Mono brand

CREDITORS

Banks

SHAREHOLDERS

Silent owners

UNIONS

SECTOR INFLUENCER

Fashion press community, ecc.

FINANCIAL COMMUNITY

Opinion leader for banks and SH

BUSINESS COMMUNITY

Opinion leader for potential business partners

JOB MARKET

talents

PUBLIC OPINION

Company judgement and target influence

POLITICS

What does marketing do? INTEGRATED MARKETING

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A always valid marketing and management tool

Swot Analysis

• A SWOT analysis is an organized list of your business’s greatest strengths, weaknesses, opportunities, and threats.…

• Strengths and weaknesses are internal to the company (think: reputation, patents, location). You can change them over time but not without some work. Opportunities and threats are external (think: suppliers, competitors, prices)—they are out there in the market, happening whether you like it or not. You can’t change them.To talk to clients: to create value for selected target

• Existing businesses can use a SWOT analysis, at any time, to assess a changing environment and respond proactivelyTo Transfer Value: relationship, channels, network

• New businesses should use a SWOT analysis as a part of their planning process.

• In any case, the point of a SWOT analysis is to help you develop a strong business strategy by making sure you’ve considered all of your business’s strengths and weaknesses, as well as the opportunities and threats it faces in the marketplace.

Marketing in Fashion Companies

C

ust

om

er

STYLE MATERIALS MANUFACTURING SALES COMMUNICATION

Marketing segmentation and target definition

P1

P2

P3

P

1

P

2

P

3

P

1

P

2

P

3

P

1

P

2

P

3

P

1

P

2

P

3

M1 M2 M3 M1 M2 M3 M1 M2 M3

M1 M2 M3 M1 M2 M3

P= PRODUCT M= MARKET

Marketing segmentation and target definition

To break to show off

Sense of belonging to an aspirational world

logo Product

value

UK (niche)

US;

CHINA (exhibition on

self stories)

FRANCE (authentical,

descrete)

RUSSIA (excess)

Brand Equity and Branding Strategy

Branding strategy: The decisions to use the distinctive elements of the brand for

new or existing products.

Concept Definition

Brand Extension Use an established brand for to launch a new product

Sub-brand To link a new brand to and existing one

Parent Brand Existing Brand that creates a brand extension

Line extension To use a parent brand for a new product to a new segment

Category Extension Parent brand for a new category

Brand line Specific brand for a line of product

Brand mix All the product lines under the same brand

Brand Variant Specific brand line for specific channels or distributor

Licensed Product To use the name for an external production and/or distribution

Brand Equity and Branding Strategy

Strategic brand management plans and makes action

addressed to build, to measure and to manage the brand

aiming to maximize its value:

- Fix the proper brand positioning STP (Positioning: the art, and the science to set the offer and the image of the company in order to reach a distinctive placement on target market)

- To plan and to implement a marketing and brand strategy

- To measure the brand performances

- To increase and to protect the brand value

Brand Equity and Branding Strategy

Brand: “name, term, sign, symbol, logo or their

combination, supposed to identify goods and

service with the main purpose of differentiation

form the competitors. These differences can be

tangible and related to product performances or

symbolic, emotional and related to what brand

represents”