The Italian System for Fashion: Present & Future

5 06 2009

Changes Around the Turn of the Century

minimalism grungeThe end of the 20th Century saw the advent of minimalism and grunge, where shopping for fashion was viewed as politically incorrect. At the same time, it was a period of no limitations and turmoil between globalization, the War in Kuwait, unemployment, AIDS, and the constant provision of media-created “emotion” which went hand-in-hand with celebrity stalking. This emotional overload and negative view of overt consumption led to an increased interest in the eco-look and the spread of street fashion and athletic wear (including the Puma/Jil Sander and Adidas/Yamamoto collaborations). The market froze after 9-11, coming back with a sense of controlled vivacity, where people felt a renewed interest in self-expression. The trend of mix-and-match also emerged, allowing people to make their own way, far from the rules of the 80s Total Look.

Rampant consumerism came back, and most brands responded by producing products in lower price ranges to attract aspirational clientele seeking to buy into a luxury lifestyle. The proliferation of retail outlets from first-tier cities through third tier cities, together with mass media and global web communications ensured that people all around the world could access fashion and luxury. While an excessive consumption trend helped contribute to the credit crisis, it also helped to fuel the argument for conscientious spending, Corporate Social Responsibility (CSR) and ethical fashion.

microcapsules_intelligent materialsToday, advances in technology for textile development are increasing exponentially through intelligent materials, with no signs of stopping (including micro, thermo-regulator, anti-stress and perfumed fibers, bio-protective fabrics, etc). The men’s fashion segment also continues to grow into the multi-category system paralleled with womenswear.

Among these market changes, the Italian system continues to evolve.

The Present & Future of Italian Fashion

What is “Made in Italy”?

Today, most of the remaining original Italian designers are reaching retirement, if they haven’t already. The whole of Europe is losing factory jobs in textiles and clothing as firms de-localize and imports increase, although Italy has seen this trend occur more slowly than others.

However, with ever-diminishing production occurring within Italy, and with the country’s most prominent design houses being handed over to the leadership of international talents or private investment firms (the latest is Safilo), it is difficult to say what “Made in Italy” means today. There is currently an ongoing dispute in Europe as to the relevance of “Made in” labels. Northern European countries have already lost the majority of their factories to delocalization, and do not want the “Made in” label, as their goods are imported.

Europe_Factory_Chinese_YaleGlobalWithin the Southern European countries, where the remaining manufacturers are typically located, lobbyists push to maintain the “Made in” labels on garments. However, even in Italy, manufacturers are producing parts in China and law only requires that a portion of the product be made within Italy to be considered “Made in Italy.” In fact, there was great controversy last year when an exposé on shady production processes aired at dinner time in Italy. The news piece showed Chinese immigrants working in sweatshop conditions as leathersmiths for designer brands, though within the borders of Italy (Prato and Florence). This system was initiated so brands could maintain their localized production, though with arguably less-skillful workers. Some Italian manufacturers viewed this move as a way to keep a closer eye on the outsourced production, using the cheaper labor force while maintaining local facilities. (You can read an English write-up on the case here.)

A Dying Breed

Italian_ShoemakerAlso suffering are the Italian production districts, evolved from generations of craftsmen with tacit knowledge of leather goods and textiles. These districts naturally developed into their own textile and leather goods pipelines, with separate small factories or workshops supporting one another through their own particular specialties. They created very attractive production communities, where brands and larger manufacturing companies could source work. Young Italians no longer want to follow their parents into production or craft-related vocations, and so the Chinese are coming to provide the labor necessary to get the job done. Meanwhile, the production pipeline of these districts is breaking down because the cost is forcing the bigger manufacturers and their brands to send work to Asia or Turkey… or it is being internalized with high-tech machinery and operators.

knockoff designers bagsToday’s Italian production companies have grown smaller as imports increase, and knock-offs are a major force in destroying manufacturing innovation. However, even as their numbers dwindle, it was the Italian fabric weavers and leather workers who manufactured the most creative works, making Italy a key player in the international fashion scene.

In addition to the production side, on the creative end we’ve seen prominent Italian designers retiring. While other fashion capitols have a history of nourishing and promoting their young designers, in Italy, you typically must already have a name in place in order to be successful. Very few new designers have climbed the the ranks of Italian fashion since the late 80s. This adds pressure to the “Founder’s Dilemma,” which poses a challenge when a brand is built around a specific personality, and that personality is no longer involved with the brand. In the last year alone, two prominent Italian designs, Gianfranco Ferré and Valentino, left the fashion world and were skeptically replaced by young designers with mixed results.

Focus on Retail

toyo_ito_tods_buildingFashion companies have moved their focus downstream into retail, where experience shopping became the new communication tool. Italian brands have excelled in this retail model, rolling out branded temples to shopping in both developed and emerging markets. This had been a great model for generating revenue until the beginning of the financial crisis, which forced many retailers to close their doors, pack up and go home. In addition to creating more demand than most Italian manufacturers were able to economically provide, it also had the controversial effect of spreading luxury goods across such a vast environment that many began to ask if an item that could be found anywhere could still be considered luxury.

Question: if it’s no longer Made in Italy, and it’s available everywhere, does it still fit within the Italian model? Can it be considered luxury?

Digitally Challenged

In spite of having a historic foundation of market-savvy entrepreneurs who enabled Italian fashion to flourish, Italian companies have been among the slowest to evolve their business model in support of the digital age we will live in from this point on. YOOX has been working diligently over the last 2 years to expand their e-commerce services from fewer than 5 Italian brands to more than 20 by the year’s end. However, with such rapid growth of the company’s client group, complaints about disorganization and customer service, quality control issues and a general lack of bleeding-edge technology and brand imaging must be dealt with, in order to preserve the luxury status so carefully simulated in the physical retail environment.

A New Foundation

With the current state of the economy, many brands are struggling. Budgets are being pulled from fashion week and marketing to make ends meet. However, as new designers refuse to become celebrity circuses, and supermodels are an extinct breed, the system needs an infusion of excitement to revitalize the industry.

In the place of generations of craftsmen, a new group of technologically skilled, creative young people have emerged. Universities in Italy have provided a focus in research and development in new textiles and industrial techniques, as well as fashion design, e-commerce, brand management and marketing. The way I see it, Italian companies still have a chance at maintaining their Italian-brand viability if they focus on some key success factors which they maintain.

The following are my ideas of some key resources in Italian fashion and luxury, and how to utilize them:

  • Italian heritage and family ownership of the majority of brands: market the origins of the brand and focus on the highest craftsmanship within the labels, and reign in investment in cheap production that dilutes the brand image (focus on the top of the brand pyramid, not the mass-market base). Nothing is worth damage to the brand.
  • The last remnants of skilled Italian craftsmen, who have tacit knowledge passed down through the generations in addition to more recently acquired technical skills: groups like Altagamma would serve the industry well to promote these people, as they have a lot to offer in terms of passing down a great legacy. Since time is running out on this resource, it seems prudent to put some marketing muscle behind these artists, promoting their irreplaceable skills as something honorable and special, not “country” and uneducated.
  • Students trained in textiles R&D and business innovation: there is an increasing market for ethical fashion, and Corporate Social Responsibility (CSR) will continue to grow as a concern for fashion and luxury consumers. These young graduates can help move the Italian industry forward to implement new techniques that are environmentally friendly and ethically sound. Italy can be a leader in this realm based on a heritage of innovation, the existing manufacturing infrastructure and the skills of its labor pool.
  • A large labor pool of digitally-savvy, internationally minded young people who grew up in a branded environment: as the Luxury Society just reported, it’s time that the patriarchs of the European fashion and luxury sector took a moment to listen to their grandchildren. The necessary knowledge and capabilities required to move the Made in Italy industry into the future is ready and waiting (and currently underemployed).

Main point: The commitment to heritage in production is what boosted the Italian brands in the world’s eye. The reluctance of some of the most prominent brands to continue advancing with an evolving market may be the downfall of the Italian industry.

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Digital Fashion

29 05 2009

iphone


Get ready!

The iPhone is expected to be the shopping norm by December 2010, according to today’s news.

Today’s Women’s Wear Daily reports that YOOX has been the latest to initiate its online shopping portal via the iPhone. Other retailers, such as Shopstyle, Amazon, Sears and SVC have long since developed their own Smartphone applications. In the meanwhile, for those who haven’t developed their own iPhone applications, companies such as Demandware are crafting retail websites  to maintain functionality across a range of Smartphone devices, including the iPhone, BlackBerry, or Palm.

A loophole for luxury?

Even if Smartphones only make up 4% of new mobile phone sales by the end of the year, as predicted by analyst Ramon Llamas of International Data Corp, it makes sense that the majority of those buyers are also luxury shoppers. They’re going to be expecting something from their favorite brands, no?

In the land of luxury, trailblazers Chanel and Ralph Lauren have already adapted iPhone applications to display their fashion shows. However, so does the ever-convenient Style.com application- in fact it provides them all, in addition to information on the models, and the Vogue blogs and headlines! (By the way, this app is so fierce that it actually boosted iPhone sales. Check out the comments in this article.)

What does this mean for our luxury players? Their products are available online through various retailers, and brand enthusiasts can watch the latest fashion shows (with added details) and read the headlines on CondeNast’s Style.com application. If, by chance, I happen to leave Milan and have a Chanel shopping emergency in Paris, I can google the address, so the location finders are not terribly original either. What I’m saying is this: Props to you at Chanel and Ralph Lauren for getting your own apps out there, but is that all you got?!

Bespoke service & building an online luxe environment

LuxuryButlerHere’s what I want out of a luxury brand: I want the feel of the brand. I want the background story behind the items I love- how it was conceived, how it was constructed; what makes it special. I want to know what music the design team is listening to, and I want to be able to download playlists from fashion week and songs that are related to the collection, whether from inspiration or just setting the mood. If, like in last year’s Versace collection, there has been a collaboration with a specific artist, I want to see some images of the artist’s original work, and where I might be able to see a gallery exhibit. If I watch the fashion show on a brand’s application, I would like some function that allows me to purchase a specific item I see, with my own measurements safely recorded into the brand’s vault… I want a virtual reminder of the service I would receive in-store, if in fact, I was in a store. (You know when you’re in a real luxury environment, and you should know when you’re in a virtual luxury environment, as well.)

Basically, I want the luxury retailing experience that is just-for-me, and I want the insider information on the brands I love. Dolce & Gabbana has made headway on this through the creation of their online magazine Swide.com. Let’s get that into an iPhone application, combine it with the online retail capabilities currently being developed for the brand by YOOX, and we’re in business!

When leaders become followers

The fashion and luxury industry was once a cutting-edge beacon of hope in the advertising world. The desire and longing it was produced with such buzz now seems like a stale yawn in today’s virtual environment, and I think that, unless the big guys step up and start innovating, their current model of following the mass market online will do more to devalue the idea of luxury than any 70% off sales could have done in the early days of the recession.

The fact that most luxury brands have limited to no online presence and retailing capabilities, much less their barely existent Smartphone presence, gives me reason to worry not only about the future of my profession, but also about the future of the luxury industry itself.

style.com screenshot

Where I see another real promise is in the fashion media industry, and they are definitely stepping up to the challenge. I love fashion and cultural magazines, but I hate carrying them around (especially with today’s weight limits for carry-on items). If I can squish my favorite magazines down into my iPhone, well, that’s something I’d definitely pay for. I’m really hoping that the rest of Conde Nast’s media portfolio and others follow suit. Vogue wins again!