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Hi everyone. This week we will speak about key characteristics of fashion communication.

the products incorporate the tangible dimension of fashion goods, it is through communication
that companies create emotional association, consumer benefits, a lifestyle. Communication is
what transforms the product into a brand. Fashion communication mainly focuses on the so-
called dream factor. In their message, companies always covey imagery that is made of very
beautiful women, sometimes guys, the wear the most beautiful dresses in the bests location
with the best makeup artist, hairdressing, and sometimes also the best Photoshop. The
message always reminds us of the world of the happy few. However, communication at the
same time also has the aim of making this dream accessible to everyone. It's through
communication that companies create the desire of this world. Maybe we have never entered
a luxury brand store; but for sure, we have seen their advertising campaigns, the billboards,
the windows industry. Communication has to balance exclusivity of the message with the
accessibility of the medium. Communication also depends on brand positioning very much; so
communicating a mass market, sport, or casual product is not the same than communicating a
luxury one. And as well of the different objectives the company may have. Generally speaking,
we differentiate different levels of communication. We may communicate a product that in
fashion is the seasonal collection. We may communicate the brand that is the personality, the
essence that goes beyond the single collections and makes the companies recognizable and
identifiable; or we may communicate the company itself, the corporate level. Companies may
also have different objectives they want to pursue through their communication. The first
thing they have to create is brand awareness. They need to be well known among consumers.
If I create my brand from scratch I want you to associate my first name to the product I'm
selling. I want to have the top of mind effect. To be known is a necessity but not a sufficient
condition. Companies also have to seek for brand image. They have to be relevant. They don't
need it to speak to everyone, they have to speak to those that are able to understand and are
willing to share the lifestyle they propose. They have to communicate to the trend setters and
to the pool of aspirational customers that can really understand the company's value
proposition. In order to build their image they use their logo; they use their heritage; they use
storytelling about the history, the place, The founder— but as well, they may describe the
characteristics of the product like the craftsmanship involved through videos or other tools.
Last but not least companies are companies. They also need to communicate at the corporate
level. The aim here is to have all the stockholders the internal employees first; but then also
the clients, the suppliers, the banks, and the local communities aligned to the strategy of the
company. What the company needs is to have the best financial resources invested in the
company and the best people willing to work in the company itself. They have to communicate
their numbers. They have to communicate their strategy. They have to communicate what
they do for profit but as well the planet and the people. In fashion and in luxury especially
corporate social responsibility is becoming more and more important. As you may understand
these different levels of communication require different competencies and attitudes. We
have said that communication is a complex activity with different levels and different
objectives, but what makes fashion communication different than any other industry’s? How
was fashion able to be such a powerful language? There are some key characteristics that I
want to highlight. The first is the importance of images. Fashion communication is very visual,
it's based on pictures with the product and the logo, most of the time, that's all. If you think
about even the most important designer brands, they do not have a payoff. They don't have a
slogan that as a customer you may associate to the brand’s value proposition. There is not an
equivalent of L'Oréal’s, “Because you're worth it,” or Nike’s, “Just do it,” etc…. They just have
the product, the seasonal product, the model that is

embodying the product, and then the logo. That's all. Why images? Because fashion is a very
direct and also universal language. Fashion products are a communication cord on their own
because through the product, the designers represent the evolution of the style as it is
connected to society itself. And because of that, the product itself is the best protagonist to
talk about the lifestyle that it conveys. Also, images let the customer, the person interpreting
the communication, the freedom to give his or her own personal interpretation, his or her own
personal view. Sometimes words frame the communication too much. Fashion companies do
not want to be informative. They want to be emotional. They want to be inspirational. Lastly, it
may be difficult to admit this for a person like me, a professor, spending the time talking,
talking, and talking, but it has been proven that non-verbal communication is much more
effective and memorable than verbal communication. Maybe at the end of this lecture you will
remember my tone of voice, my gestures, my outfit, but not the content; hopefully not. This
explains why fashion companies deciding to use pictures are much more effective than other
industries that prefer to accompany the art the image part of their creativity with a comment.
We said that pictures play an important role, that the product is at the center of the
communication, and this makes fashion communication very recognizable. But it is also
important to underline the role that is played by the designer him or herself. The designer is
the ultimate decision-maker as far as the creativity of the communication of fashion
companies is concerned. The reason is that the product conveys it's own name. Most of the
designers do not accept other creativity overlapping their own vision. That's why they prefer to
work with external professionals like art directors, stylists, casting directors, rather than
traditional advertising agencies. The fact that the designer is making the ultimate decision also
makes fashion communication very consistent. It is about the importance of the product, the
visual, the designer, but as well about celebrity connections. Fashion companies have to create
aspirational desire and therefore, they relate themselves to people that are most influential in
terms of image. On their own side, celebrities need to be seen as sexy and skinny; which is
something that fashion companies can provide them. It's a kind of mutual relationship that
helps to make these dreams become tangible, that help the customer to associate the brand
with the dream of the red carpet and the magic of it. Another very important thing is the
importance of detail. Not everyone is doing well on this but it really makes a difference.
Communication in fashion is about taking care of many different small details, All of them
making a difference. It is not sufficient to have the best advertising. You need this best
advertising to be in the right magazine. It is not sufficient to be in the right magazine. You need
to be in the right space. That's why fashion brands are fighting to occupy the first positions. It's
not sufficient to be in the right magazine in the right space. You need to be in the right issue as
well. That's why the September issue is the most important. And so on, and so on, and so
forth…. Every single detail may help build the brand’s personality or on the contrary, if the
messages are not aligned, create confusion and difficulty for the customer to really perceive
the image as the company who like to be understood. So evil is in the details. Last but not
least, communication in fashion also has the scope of creating the mask. Is where the
companies ask to there a little bit more. So from time to time companies need to be disrupted.
They need to be fractured to innovate the language. A good example is when Dolce & Gabbana
decided to invite to the front row of the fashion show the fashion bloggers. Nowadays this is
very conventional, everybody's doing this. But when they did this it really created a
breakthrough, and you know how difficult it is to seat people in the front row. So if you have
the fashion bloggers in the first row, it means that someone else has to occupy a less nice
position. Communication in fashion is a very powerful language. This is also granted thanks to
the direct control of most of the activities. Fashion companies tend to be quite control freaks
and they manage in house, usually, most of their activities: the photo-shooting, the media
planning and buying, the event creation, and the digital environment. This high level of internal
control assures consistency and the attention to details that is key. Understanding what a
communication office does is therefore fundamental for understanding what makes
communication in fashion different than in other industries. And this is the topic we will
address next week with a major expert. Stay tuned. Ciao!

Now we will go more in depth on how to build a strong communication identity. Building a
strong communication identity is a necessity for brands that want to create a lifestyle. If all the
messages coming out and going in the companies are consistent this will help to reenforce the
direction. On the contrary, if messages are not aligned one can take away from the others. It is
fundamental that everyone within the communication department, but also specialists
working outside the company are aligned to the same vision, the one of the company itself.
What are the key elements constituting a strong communication identity? The first is the
concept, the one most important thing that as a company we want to communicate. Each
company should be able to associate the brand’s personality to a few keywords. The exercise I
often suggest the companies is to identify the three objectives that could synthesize what is
the company’s promise. For example, Dolce & Gabbana is well known for three words. Those
three words are “Sicilianity”, sensuality, and “sartoriality”. It’s the place of origin. It’s the
Mediterranean approach. It’s being central, that is to be sexy, but in more a subtle,
sophisticated way, and it is up to “sartoriality” that is about the product characteristics. Now
let's start to do the same exercise for the brands you are familiar with. Are they really
associated with some key adjectives or is it difficult for you to create this connection? Another
example I want to give you is another Italian brand, Tod's. Tod's is well-known for the
moccasin with the so-called gommini, the rubber sole pointed, with holes. These shoes are
both comfortable and delicate, because it is a loafer, therefore it is elegant, but then the sole is
also sporty, and therefore is suitable for people that have to move ant want to stay
comfortable. This product positioning is perfectly reflected in Tod's advertising campaign.
Tod's is communicating the concept of an Italian touch that is to be smart, to be somehow
luxurious, but in a very deconstructed, casual way. And if you look at some famous Tod's
communication campaigns you will see that most of the time they portray a group of people
dressed in an elegant manner. Most of the time chatting around a table enjoying an aperitif
enjoying a cup of coffee, and the way they sit is always very relaxed. It is not too formal or up
tight. Somehow the concept is also delivered in the communication, not just in the product.
Another great example of a great concept is Louis Vuitton. Louis Vuitton speaks to us about
the art of travel. The company doesn't want to associated just with a very identifiable logo.
The company want to conquer our share of art not just our share of wallet, while speaking and
connecting us to values that are much deeper. Now, take a couple of minutes and watch the
Louis Vuitton video about core values that is called, “Where Will Life Take You?” Did you watch
the video? Was it the kind of video you would have expected from a luxury showoff brand such
as Louis Vuitton? I guess not. We didn't see wealthy people. We didn't see a very luxurious
mansion. We didn't see even the logo that much. The video was speaking about the essence of
journey, what traveling means to us, Why journey is a process of self discovery. Why does a
brand selling bags full of logos want to convey these kinds of values? Because this will give the
customer of Louis Vuitton a different perception when they will buy the products. You're not
simply buying the very nice logo or they very well done stitch of the bag, you are buying a
statement about who you are, the place you want to have in the world. So successful brands
are those that are able to convey strong concepts in their communication. The image identity
is not only based on what we say. It is also very important the how we say things. The way the
brand speaks to the audience. This is called tunnel voice. As a brand, we may decide to be a
little more informative and rational in the way we present ourselves. We may have a more
chatty, leasure, ironic tone of voice. We can be more emotional. This is generally speaking a
combination of the images we select, the text, if any, the headline, and, as well very
importantly in fashion, the attitude of the models themselves. If you think about it, in most of
the high-end designer brands. Models look at your face, so they look in your eyes. But they
never smile. Why not? Because the message that luxury wants to convey is the one of a privé.
It is like a club in which the brand is already in, and if you're happy, you will probably have the
invitation. Otherwise, you will stay outside. So the model is not searching for your empathy.
She doesn't necessarily want to be your friend, Probably you want to be the model’s friend. It’s
a little arrogant and challenging tone of voice, but it is also what luxury is selling, this world for
the happy few. Now compare the same model in skincare advertisement, a beauty product.
Even a luxurious one. Here the chances are that the model will be smiling. The reason is that
what the beauty industry wants to sell us is hope. Hope that we will be as beautiful as the
model if we buy that shampoo or that skincare cream. Here the model has to be a friend of
ours. We have to think that it is feasible to become as beautiful as she is. You see how those
very little details really are important and paramount in positioning the brand. In fashion, as I
explained in the last lecture, advertising is mainly based on pictures. That's why the photo-
shoot itself is very important to define a brand’s identity. Not all the companies pay attention
to the same details, but those that have been able to identify some key characteristics also
made their communication more memorable across the different product seasons. For
example, there are some brands that associate themselves to images that are mainly in vivid
colors or black and white. If I think about Emporio Armani or Armani Jeans most of their
advertisement campaigns are in black and white. If I see together with many different pictures
a black and white one, I immediately connect myself to the identify and the world of
sophistication of Armani. The choice of model is also key. Some brands associate themselves to
very curvy women, like Dolce & Gabbana or Guess Pin-Up. Others with different typologies of
models like the mother and daughter of the French brand Comptoir des Cotonniers or the
couples of another French brand The Kooples. We immediately associate that specific image to
the brand when we see this kind of situation. Also, the location is very important in order to
convey some specific values. Most high-end designers, but also retailers are willing to imitate
the same costs, such as Zara, decide to go for a studio. Why the studio? Because in the studio
you have a neutral background and the product is king, it’s really the protagonist. On the
contrary, casual, sporty brands are more likely to choose outdoor locations in which also the
interactions among people looks more spontaneous. Here the image that they want to convey
is come as you are. So far we spoke about the creativity, the message. But the media is as
important as the message. Indeed, the media helps to position the message in a specific way.
That's why for fashion companies it’s so important to select glossy magazines. The same
advertising in a magazine with a different quality of paper or with different quality of the
stories of the other brands that are in the magazine itself will have a completely different
perception. So it is important to select magazine not for the quantity, the numbers of readers
they have, but for the quality, the affinity of the readers with the work that the brand wants to
project. In the magazine, what the companies want, is to have pages that pay for the
advertising, but as well, a space in the editorials. I don't know if you are familiar with what
editorials are, but they are very important for fashion. Generally speaking, in every magazine,
you have pages that are positioned at the center of the magazine, in which the fashion editors
describe what are the new trends, putting together brands belonging to different companies.
To be selected for those editorials is a sign that the company is really fashionable. It’s an
endorsement that is given by the magazine itself. And that's why this is what PR press office of
the companies are always searching for as a measurement of their effectiveness. Together
with glossy magazines, there are other forms of media that are more and more important.
Billboards; windows, that are like having a billboard 365 days in the streets and; generally
speaking, the new media. Fashion companies are communicating more and more through
videos, social media, blogazines, and fashion bloggers. How the digital media revolutionized
the communication landscape is the topic that we are going to address in the next week. I
hope you enjoyed this lecture. Bye.


Hi. In this additional clip we will see what other industries can learn from fashion. In
particular, we will focus on the concept of masstige, so how to create a higher perceived value
of your product by leveraging some prestige techniques. This may help managers in other
industries apply the “fashion treatment” to their product, and therefore to get both higher
margins and more loyalty. In a society of widespread well-being, the desire for luxury causes
the confines of people who can afford to by an Hermès bag or Gucci moccasin. People are
searching for individual gratification in little daily pleasures that are expensive but yet not
inaccessible, like having a break with an Illy or Nespresso coffee, or having a daily treatment in
a spa or buying a Swarovski charm or a Victoria's Secret bra. This search for a consumption
that is more sophisticated than one of the mass market but yet not as expensive nor
unreachable to most of people as the one of luxury products gives the room for
premiumization of product categories which were once considered undifferentiated. In other
words, there is a way for mass market companies to escape the commodity trap, to move the
competition away from price and therefore cost, into something that gives the customer a
value that is more emotional. Here comes the word, masstige. Masstige is the union between
“mass” and “prestige.” It refers to retail categories that include brands and products that have
high end and prestigious characteristics especially regarding communication and the in-store
experience they are able to create. Together with an affordable price and a diffusion that is
more spread in terms of distribution than the one of prestige products Masstige can also be
seen as the combination of mass and prestige, two different elements of marketing mixed.
Finally, in fashion, masstige refers to the concept of mixing and matching. The fact is that
today, in order to give a cool image of ourselves we should combine in our outfit some luxury
accessories together with some products that are more affordable. This is not just in order to
save money, but somehow it’s to express who we really are, so searching for our own way of
interpreting fashion. Let's now explore more in-depth what masstige is. Let's start by referring
to the book that introduced this concept first. In their book “Trading Up: The New American
Luxury” Michael Silverstein and Neil Fiske spoke about a new market segment that occupied a
range between the mass market and premium ones. According to the survey in the U.S. market
in the platform of personal care accounts for between 20% and 40% of all sold goods. What is
most interesting is it’s growing at an average rate which is twice the that of brands that are not
included in the masstige segment. A phenomenon that can help you to better understand
what the masstige is, is the development of sophisticated consumption in the food industry.
Think about water; think about ice cream; think about chocolate; They used to be pretty
undifferentiated products. Thanks to the application of Masstige techniques they've been
transformed into something that is commodity chic. So commodities that make a difference in
terms of design but as well to the ability of those brands to appeal to different senses. For
example when we enter a store selling Godiva chocolate, our attention is caught by very nice
visuals, as well as the color, the ribbon of the package, the selling ceremony that reminds us of
a luxury store. Magnum Ice Cream has been sold in limited editions, referring to the five senses
and the Seven Seas. They have appeal in their advertisement, with all the five senses. Think
about the sound when you bite into ice cream. And on many occasions they’ve made
references to the glam of fashion for example by using models in their communication. And so
on and so forth. So, as you see there is a huge opportunity for creating a new market segment.
That gives companies of consumer goods the opportunity to learn and apply the luxury and
fashion treatment to their products. This new offer is possible because the customer has
changed. Today the customer is much more sophisticated but also open minded, willing to
browse from the top to the mass. Therefore there are new consumer consumptions such as
the mix and match that I referred to previously, but as well as conspicuous austerity, selective
extravagance, and rocketing are taking place. Let’s try to better understand what those funny
names mean. Let’s start from “rocketing” which is also called “selective extravagance.” While
in the past if one would have observed what people were carrying out in their shopping cart,
for example in a department store, food store, or supermarket. The consumption past tense
would have been pretty predictable. So some customers would have bought brands. From all
over the product categories. While others, because maybe they didn't have the same money,
they would have chosen always the promotions, the product labels. Today, every customer is
putting together products that are very different. So, maybe we are really passionate. We are
fond of olive oil. So we will search for to the most expensive quality regardless of the price. But
in the meantime, maybe we will go for the product label on pasta. As an Italian, I would
suggest against that, but this was just an example. This phenomenon is called rocketing. That
means that the same customer will overspend in some product categories while making
savings in others. For most people, this could be a consequence of budget constraints. So we
do buy the in bag, and then maybe we make savings on our underwear. This is also true for
high net-worth individuals because somehow this diminishes the sense of guilt, so they could
over-spend on something they really believe is important. And then they buy in factory outlets
or in private sales to compensate for this shopping behavior. So the idea is that more and more
customers are extravagant in their selection and because of that they're also more inclined
and open to accept that brands that used to belong to different market segments are
nowadays also occupying this masstige territory. Let me provide you some examples of how
fast-moving consumer goods companies may move into prestige. How they can create this
exclusivity factor. The first is to learn a very important lesson from fashion brands. The
importance of feeding the press with the right story angle. We want our brand as a space in
the magazine in the media to something that is able to catch the attention. To create the wow
factor. So, why not create products that are very expensive, maybe nobody will buy. But they
are very good in creating this reason to speak about the brand. A very good example is the
fantasy brand of Victoria's Secret. Victoria's Secret is, in my view, one of the best example of
masstige. It's a brand of underwear, very successful. That is selling products that are good
quality. But yet, they are not really, let me say the cutting edge in terms of craftsmanship. But
yet it is a brand that has been able to create a very strong emotional engagement. How so?
First of all, to the fashion show. Every year, Victoria's Secret organizes a catwalk which is
indeed a spectacular show. First of all, you have the best top models of the world attending,
and are called Victoria's Angels. So there is already a marketing appeal. And then they invite
celebrities like Justin Bieber and Rihanna. So we are all ready to go and really live this great
experience. And during this catwalk, very few products are showed. Among them, the most
important role is taken by the so-called fantasy bra. A limited edition that is conceived in order
to create a lot of buzz. Just to provide you an example. In 2013, the Victoria Secret's royal
fantasy bra was valued at $10 million. Now, you will wonder, who's going to buy those very
expensive bras? No one. So far it has been reported that only one, and not even the most
expensive, it was only $2.5 million, has been sold. We don't know who is the lucky owner but
for sure, she will be very beautiful when wearing it. But the point is that thanks to this bra
Victoria's Secret has been able to upgrade their perceived position. So when I enter the store
I'm not going to spend millions of dollars. On the contrary, Maybe I'm going to spend $20, $5,
or $50 but I will feel that I am a princess as the Victoria Angels that I’ve watch in the fashion
show. Communication as I said before is the most important driver for bringing mass market
into prestige. So practically what can companies do? First of all they can imitate their fashion
codes in their communication. If you followed my lecture you will remember that fashion
communication is about visual. Is about using top models. Is about creating a lifestyle that is
very aspirational. Now top models cache is available to everyone that can pay for their fee.
Therefore, it's very common to see

that very important models that are the testimonials of luxury have also giving their availability
to work for mass market brands. So having Kate Moss in your communication campaign,
having Giselle is helping to enhance the perceived value. So simple then this. Then, what mass
market companies can do is exploit the concept of limited edition. Luxury is by definition
limited because of the scarcity of the raw materials. Because of the hours that, are needed in
order to transform these raw materials into a finished product and because of the years of
expertise that are needed in order to know how to make the product. But today we are
surrounded by limited editions everywhere. The pioneer and, to me, still the best example is
H&M. Back in 2004, it launched a limited edition design by Karl Lagerfeld, the designer of
Chanel. That limited edition at very affordable prices. So I remember that it went from less
than 50 to 150 Euros and was actually distributed only in half of the stores of H & M. So
somehow the search for some kind of exclusivity into the accessibility. These collection was are
huge success. In Milan it was sold out in a few hours and in the afternoon the same items were
available on Ebay and other auction websites for 2, 3, 4 times the price. Now, there is no doubt
that this partnership has been very beneficial for H & M. Because it helped to enhance the
perceive, perception of the retailers. So, it had the design statement in the corner that
otherwise would have been perceived as a copy cat. But why did Karl Lagerfeld go for it? Was
this a good or a wrong decision for the Chanel brand? There is a video that was created in
order to promote this launch that I absolutely suggest you to watch. Because I still consider
this video as the perfect manifesto of the mix and match. In this video you can see people
wondering and getting anxious after having heard about this new, of this new collection. It is a
very funny parody of the French aristocracy. At the end of the video, a guy starts yelling in a
very elegant restaurant and what he says is, Karl, Karl, is it true? And suddenly we see Karl
Lagerfeld, with his amazing personality, looking at this man and saying. Of course it is true, but
it is cheap, the other guy says. And here Karl Lagerfeld replies, what a depressing world, it's all
about taste, if you are cheap, nothing helps. So this is the point today, it's not about the money
you spend, but it's about the taste and discernment you have. And somehow to have a limited
edition of a fast fashion retailer is even cooler than just buying the designer brand. Because
every day I can enter a designer brand store if I have money, and to buy something. But to buy
that specific collection I need to know that they will arrive in the store. I need to queue in front
of the store. I need to fight with the other crazy women and men in order to get the iconic
piece. So, as I was saying, this kind of partnership proved to be extremely beneficial for H&M,
that since then have continued with many other very important designer brands. But also
somehow helped somehow Chanel increase the cool quotient because the name of Karl
Lagerfeld is certainly very famous among people that are connoisseurs in the fashion industry,
but probably doesn't say much to younger generations. Or even if they know, they could never
enter a Chanel store. So it's a way to start educating them to the Karl Lagerfeld taste. And
finally Karl Lagerfeld said that the Chanel company knows very well that H&M customers can
buy lipstick. So never forget that even luxury brands sell products that are more accessible. So
limited editions by the designers are a way to bring prestige codes into the mass-market
through it’s use of top models or the creation of the retail experience. So is that everything in
masstige? Are there no boundaries anymore between what is truly prestige and mass market. I
don't think so. It is true that mass market companies can leverage on some elements of the
marketing mix. Yet, the experience they're going to provide to the customer will never be
unique. Why so? First of all because the product cannot be bespoke. You cannot have the best
raw materials. You cannot have the best design. You cannot have the made in Italy or made in
France, otherwise your price won't be affordable anymore. And then there is the service which
makes the difference. When we enter in a fast fashion retailer, yes we may have very catchy

windows we have nice displays. But we don't have the same level of

assistance and competence and know-how. And as well the same level of attention that we
may find in a luxury store. So to conclude I will say that it is possible for other industries, and
especially for fast moving consumer goods, to imitate some elements that belong to luxury.
But they could play one single instrument they could never play the orchestra altogether at the
same time. So if you want to be luxury check that all the elements are speaking about luxury. If
you want to be masstige just try to enhance what you are offering to your customer. Always
remembering that everyone wants to feel like a prince or a princess.

Thanks to our students we understood that engagement is key. The former CEO of Burberry
said that you need mind share if you want market share, and in order to have mind share, you
need to engage. Fashion companies have to play with the magic. They have to make people
dream, but they cannot leave themselves anymore to a nice advertising company. They have
to develop original and relevant content. They have to speak about the product, but as well
about the music, the art, the lifestyle that goes with product itself. They need to understand
that the virtual world is not virtual anymore. On the contrary it’s also part of our physical
experience. The more they use in-store technology in the physical points of sale, the more
they're able to create a direct connection with a brand ambassador on social media, and the
more they will convert all of this passion that so many people have for fashion brands into real
sales. Last but not least, fashion companies need to understand that one size doesn't fit all. We
have different social media, different tools, we have different geographies as the ones
represented in the focus group, and therefore companies need to be able to convey a strong
and consistent message, but at same time localize the strategy as far as PR and digital
approach is concerned. Keeping all the above in mind, companies should aim at creating a
transmedia storytelling. By a transmedia storytelling I mean a story that unfolds across
multiple platforms. Each medium contributing to unfold a piece of the story and that sees the
listener of the story, the consumer, as an active participant. It's not just about describing who
you are, but letting the customer being part of this story, playing an active role. In the fashion
and luxury industry we have some amazing examples of companies that were able to create
such a kind of engagement. I think that the point of reference for everyone is Burberry.
0Burberry is a company that was able to transform itself into a true social media enterprise.
There is a very inspiring video in which the CEO speaks about this evolution and how the brand
has been able to touch the customer at every single point with the same message: from the
physical fashion show to the tweet walk, from the store to on-line e-commerce. It somehow
creates the same seamless experience; from the official website to new platforms such as in
which the story of the Burberry’s iconic product is told with pictures of people wearing the
trench coat and giving their own interpretation, to Burberry acoustic, in which the companies
develop other areas then fashion by sponsoring emerging talent in British music. Let's now
take a couple of minutes and watch a video that perfectly describes what it means to be a
social media enterprise. Angela Ahrendts, former CEO of Burberry is speaking. Could you
listen? You have to be totally connected. If you don't do that, I won’t know what your business
model is in five years. Fashion is about innovation and digital is a journey that companies need
to take.

Week 5

Welcome to retail week. The topic we are going to cover in this module is related to the
distribution strategies of fashion and luxury brands. This is a very hot topic. I’ll tell you a little
bit how we're going to go through these topics. The first thing will be about the definition of
these issues. What does retail management mean and why is it different from wholesale
management? Then we will introduce the different channels and the different retail formats.
Fashion and luxury brands must manage in a multi-channeled kind of environment. Another
topic that we will follow will be about retail and the distribution strategies in terms of activities
and roles. Then we will go into the topic of how to manage a retail identity when you have
your own store as a branded company and you want to express your identity in terms of
products, stories, and images into the retail space. We will conclude with a very interesting
part that is about success cases. The best cases that we’ve selected in order to help you
understand what are the best practices in retail identity management and store management?
What are the perspectives of top managers about the evolution of the omni-channel world?
How and where internet is going? How to design the best customer experience in the retail

When we talk about distribution and retail management in this world of fast-moving consumer
goods, luxury and fashion, in particular, we always have to take into consideration the fact that
there are actually two very different channels. One, the first, is the wholesale channel; a
situation where the fashion or luxury brand that is usually an industrial company, not owning
entirely the retail works with an intermediate player, actor in order to give to this middleman
the rights and tools to distribute to retail the product. So the point is a service to retailers on
the wholesale channel is a B2B actually kind of logic. We always say, this is a business op, sell-
in, because you sell in to the trade, to the retailer. And then it's the retailer, the wholesaler
that will sell out to the customer. Another logic is the retail logic, where the brand has a direct
B2C kind of contact with the final customer. In this case, through different store concepts and
different formats, the brand is able to engage directly with the customer, set the pricing, set
the selection, the visual merchandising. So it becomes, in a sense, a retailer. Not anymore an
industrial brand that has to distribute to a trade partner. This is very important to understand,
because in the past the wholesale model, so distributing through a middleman, was the main
channel for fashion and luxury brands in Europe in particular. Now, in the last I would say ten
years, most of the luxury and fashion companies in many market segments, from luxury to
premium to the mass market became retailers. So, they enter into the retail channel, they
develop competences in order to directly manage the stores. So also capture the retail margin
and have a better opportunity to show and engage with the customer protecting and valuing
the brand image on the point-of-sale. When we talk about omni-channel and we talk about a
very important trend, we talk about the fact that more and more wholesale and retail logic are
mixing, and the brand has a challenge in managing the two channels in the same way, with the
same perspective, that is the perspective of the brand identity and image.

Many things happened in the distribution and retail world of fashion and luxury brands in the
last decade. Many brands went retail and so many things happened also in the way they
transformed the retail sector itself. I will introduce to you some of the main trends that are
now present in the global scenario. And trends that will present opportunities but also threats
for many of these brands. Let's start from the fact that in terms of formats compared to let's
say a decade ago. Now in the world of retail, many, many new business models and formats
came out. So, from the fast fashion format of Zara and fast fashion retailers to the online
platforms of Azuz YOOX or Net-a-Porter. The transformation within department stores of
corners into concessions so retail spaces that the brands might manage by themselves. Multi-
brand stores that were a traditional format that became different, more appealing. Think
about Collette in Paris or Suite in London. Think about Excelsior in Milan. Their transformation
of department stores that, for instance, in luxury upgraded and created a much more
appealing kind of selection. So formats, as I said, transform a lot. Second trend that I would like
to name is actually the globalization of retail presence of many major luxury and fashion
brands. So now all the brands are present in all the major capitals of the world side by side.
And the location game is a very important word in retailing and is becoming really tough. So
location, location, location is the key success factor in retailing. So, be in the right place, in the
right street, in the corner in the right floor of a department store this is really important. And
this is also an area where companies are, are playing and negotiating with their size actually.
The bigger you are the more negotiating power you have. A third trend I would like to name is
the actually the evolution of consumers on emerging markets that actually haven’t really
emerged. So the fact that in these areas the retail scene might be very different from the retail
scene that we have in Europe or US. New malls new department stores, new concepts, and
new outlets are coming out. And the world, for instance, of retail in Asia is much more retail
than wholesale-driven with respect to Europe and so companies need to face these trends and
these opportunities to directly engage in retail formats. Last trend that I would like to name
has to do with the customer experience. So, no matter the retail format, being this wholesale,
being retail, being in department stores or your flagship it's very important that any brand will
deliver the right customer experience to the right customer. That means as we said
differentiated customer base. So, the right experience in terms of age, in terms of generation,
in terms of nationality. And this is the latest challenge for these companies. I would conclude
saying, consider that all this has to be made in an omni-channel kind of environment. So,
location, deliver the best brand image, deliver the best customer experience, has to be done
wholesale, retail, through different formats and considering your online presence being this
direct. So managed by you, or your brand presence into platforms that are managed by
someone else.

Let's focus now a little bit more on channels and formats in wholesale and retail. When a
fashion and luxury company has to manage its distribution strategy, the key issue is how to
build and to maintain a certain brand identity image through a variety, a mix of formats. This is
really important nowadays in this business. What are these channels and formats? Usually we
identify three main channels for these companies. As I said, the first is the retail channel, so
the directly operated channel that might be operated through directly operated stores or
franchising but it’s a sell-out kind of logic, so B2C. The company is managing the retail directly
to the consumer. A second channel is the wholesale channel where you have your trade
partners that are managing the distribution and retail strategy for you. In this case the logic is
sell-in and it's a sort of a business to business kind of logic. The third channel is the
transnational channel. This is a channel where geography is not so relevant because here, as
we will see in a while, we will have formats that are global such as the travel retail. All duty
free stores, and the internet, so online sales. Within these three channels, now let's try to
identify what are the formats, what are the retail formats? Actually, this is the size and
structure of the physical store. In the directly operated channel in retail, you usually identify
four formats. Starting in terms of size, dimension, and also possibility to deliver the right brand
identity. The so-called flagship. What is a flagship? Is the flag of the brand, It’s the place where
the brand can put into action the brand strategy. Usually it is a huge space in fashion capitals,
There aren’t so many, but it's really the theater of the brand. managed, of course by the
company as

said with also a lot of people, a lot of selections, spaces that are devoted to

coffee shop expositions, art expositions. So, really it’s a “theater” of the brand. A second
format is the self standing store. So again it’s a boutique of the brand but it’s on the main
streets. A little bit smaller but not so small compared to the flagship where you have the full
assortment of the brand in place. A third format is that of the shop-in-shop. In this case, the
store is within another retail environment. Might be your boutique within a shopping mall,
typically, or even within a department store. The shop you have is really a shop with a door,
with sales associates that are managed by you, but of course the selection is smaller and even
the size. Within directly operated formats, we also have factory outlets. Because outlets now
are directly managed by fashion and luxury brands, and so they enter into this channel. Let's
move on to the wholesale channels. So the B2B logic. What are the formats in here? We have
the tradition corner: an area in a department store or in a multi-brand store, that is not
managed by the company but the assortment and the brand image is recognizable. You can
see that it is a space devoted to the company but actually the management is in the hands of
the retailer. We also have within the wholesale business the wall units. The wall units are
where you can find shoes usually, or leather goods, or accessories. You might recognize the
name of the brand but actually again these are managed by the retailer. Then you have also
the brand present in factory outlets or online platforms that are managed by the wholesaler
not by the brand. If we go through the third channel within this channel the formats are, as
said, travel retail where we have duty free stores, that is a booming business. Airports are
Becoming the new shopping destination. The brands are investing a lot in travel retail, also
because travel and traveling for shopping its now great entertainment for many nationalities.
Here you have the big e-commerce challenge. Company websites or amended by someone
else, but this is again a booming business. In Europe it’s around 3-4% of total sales. The value
of this channel and format but it will increase a lot in the future.

In this clip we will go a little more in depth into retail management. What are the activities that
are more relevant for successfully managing retail in luxury and fashion and actually what a
retail manager does. The starting point in this strategy is the definition of retail formats. We
have seen there are many retail formats from the flagship, to the shop-in-shop, the corner,
and the factory outlet; so the first activity is that of defining the right number, the right
structure, and the right location of these formats across the different geographical areas and in
different locations. After you have your network of formats in the right places, for each format
according to the kind of audience you have, you have to decide what kind of selection,
assortments, service levels, mix of products, and pricing levels you want to give. Of course in a
resort kind of formatting such as Portofino or Miami will require a different pricing assortment
and delivery compared to a store in Cortina or . After the definition of formats and the
definition of the assortment plan you have to work on the store itself. The store has a lot of
marketing issues that we usually call as field marketing from actually the relational marketing
activities. The database of customers, the events on the point-of-sales, the communication
activities the direct marketing, the VIP marketing. And then there are also retail operations
that are, are sometimes incorporating marketing, but are really sometimes operations that
they have to do. They are connected with the service level. For instance, in the point of sale
custom made repairs returns, sales period. Remember connecting all the network, the store
network, internationally, so trying to actually work in a way that is consistent. After retail
operation, there is another area that is very important in retail nowadays that is people
management. So, retail is the last mile of your strategy, but at the end of the day is the first
point for the customer it’s the door through your world as a brand. The staff in retail is
fundamental, it’s your brand ambassador. In the last years companies invested a lot in retail
training, retail academies, in order to train sales associates in delivering the best stores,
delivering the right message, and delighting the customer in terms of experience.

In this clip we will talk about how to build a retail identity, so how to transfer the brand codes
in terms of style and in terms of communication into a retail space. Let me say first of all what
is the outcome of a retail identity strategy for a luxury or fashion brand. The outcome is to give
the customer, in any place or in any touch point, the same image and the same kind of
experience of the brand that he or she may have in the flagship or in the company
headquarters talking with management. What are the drivers? What are the tools that you can
use in order to work on the retail identity management? First of all, let me say that the
location is important, it's fundamental. If you are an exclusive luxury brand, it's not enough to
say I'm at High Street; there are different areas, different corners, different miles or meters on
High streets where an exclusive versus affordable luxury or fast fashion brands should be.
Location makes the positioning. And so

This is the first element to be considered. Then there are the windows. First contact with the
customer is really at the windows. Think of a company such as Zara for instance, they use
windows as the sole communication tool. Window should represent the season or may be
used as “storytellers.” When you enter you immediately deliver an idea of what your brand
stands for through the visual merchandising and of course the layout of the store. There are
many layouts: free-flow, circular, spin. The selection of the layout together with the technique
of visual-merchandising: museum-like, free service, with focal points, will deliver a certain
image rather than another one. It’s also very important the way you manage your staff; the
way they are dressed, their uniforms; the kind of service, the way they interact with the
customer, the way they greet the customer the way they say thanks and they engage with the
customer in the point-of-sale. You might have procedures for that. At the end of the day
everything that happens in retail, starting from furniture, to the colors, to the animation
through technology that now it's a huge trend, to the human touch that the customer feels
makes your brand stand for something that is different from competitors. And in an omni-
channel perspective this identity

management has to be done also online. So how, what is the best way in order to customize
the digital experience of your customer? What are the stories you're willing to tell? What is the
kind of path within your platform that the customer has to follow? And, increasingly, again in a
perspective, you need to deliver an experience also in a wholesale space, trying to customize
as much as possible as in the retail, the final experience of your customer.

One hot topic in retail management nowadays is how to design the best customer experience.
In the past the store was a place where the customer was used to picking up the product and
paying; finding the best product according to his or her needs at the best price. That's it. Now
the store is a theater. It's a place where usually the customer comes for many reasons: first to
be informed, That is actually the role that the store played in the past; but second also to be
educated. In particular in a new markets, so to know more about the trend, to know more
about the products. To know about the care of the product to see newness. A third element is
entertainment. We talk about entertainment “retailtainment.” There are these interesting
words, to actually, outline this need that the customer has for entertainment. And not by
chance, the big malls are now places where youngsters are meeting, where they spend many
hours not necessarily shopping, but really being entertained. So information, education,
entertainment, are things that are required in a shopping and customer experience, and are
elements that brands are taking seriously into consideration. Also because, information
education and entertainment has to, take place not only in the physical store but also
increasingly online. And, in particular for new customers the catch points of the customer
experience. All the points where the customer get in touch with the brand, mix these touch
points online and offline. So, we talked for instance about this phenomenon of showrooming.
Showrooming means that a customer looks for prices and information online and then make
the purchase offline, or the reverse, Look for information offline, and then goes online to buy.
so the different touch points in a channel perspective in order to inform, educate, and
entertain are a very interesting, challenge for these companies where we have, some best
cases coming out.

In this clip we're going to explore the world of digital fashion, meaning the e-commerce
channel. Luxury companies and high end fashion companies have resisted this channel for a
long time. For many years they associated digital with discounting and counterfeiting. Actually
they were thinking the brand could be diluted. This is not the case anymore, a recent study by
McKinsey and Altagamma found out that the evolution of pure e-retail sales will be from, 4%
of total sales in 2012, to 6% of total sales expected for the year 2017. They have even
predicted a greater impact on offline sales, something like 25%. 25% of offline sales is
influenced by e-commerce and by the digital journey of the customer. Another key fact you
may want to to know about this channel is that about 65% of the business online is made up of
two categories: luxury accessories and beauty. The best format of e-commerce and e-tailing is
the monobrand store online, in particular that of brands and department stores. Who are the
players in the fashion digital world? We can break them down in to three typologies: The first
being the full price players the second being those players that are selling off-price, let's say
on-line outlets. And lastly the event or flash sales. Let's talk from the first: Full price sales. In
this category we have two business models. The first is the business model of brand websites.
Branded websites that might be managed by luxury or fashion brands. Managed by them or
powered by the e-tailers. The second business model is the business model of multi-brand
websites. In this case we have other two sub typologies let's say. And that type is so-called
hybrids meaning those players that are, are started offline think about department stores
Niemen Marcus. Or multi brand boutiques, Luisa Via Roma. That at a certain moment in time
they engage in e-tailing quite successfully. So they have a hybrid model. A second business
model in the full price arena is that of the pure play e-tailers. This is the case of brands such as,
a platforms, such as ASOS, Net-a-porter, or Zalando. Going to the second typology, off price.
This is the case of online outlets where the leader is the italian group Yoox. The third case, the
third typology is that of event or flash sales. In this case, players are competing on timing,
making available to the customer on the platform a certain assortment on a limited time. This
is the case of Vente-Privee. Let's ask ourselves how are fashion and luxury companies
competing in the digital arena? We can more or less group the strategies into three. Three
main approaches to the digital channel. The first case is that of those players, usually big, with
a digital multichannel approach, meaning that they are both present on their website or on
multi branded platforms. Usually they make a full use of social media and they really engaged
in this strategy. Gucci, Louis Vuitton, Diesel, Ralph Lauren. We have a second group of players
that are approaching the digital channel being more focused on their own store, and digital
store. And they use the digital as a marketing tool or as an entry point for aspirational
customers. This is the case for instance of italian brand Tod's or Ferragamo or Celine. The third
case is that of those players that are usually small companies quite niche or specialized in
terms of product category. Think about Tom Ford, Berluti who actually use the digital world as
a showroom. The future of the digital world is rapidly evolving. We expect that actually, the
digital channel will become just a channel among the many others, with a lot of importance.
And companies will develop more and more their branding strategy, and the branded
customer experience for the online. There are also interesting examples of collaborations
cooperations among players online, offline with the aim to better establish the brand
awareness and the brand identity of the branded companies. This is, for instance, the case of
Vente-Privée. That is a French company who introduced for the first time, the innovative
model of online flash sales in Europe.

This store, this huge flagship is a 360 degrees lifestyle from Dsquared2 as envisioned by Dean
and Dan. A taste of home that blends the DNA from Canada with Italian design. The very
consistent retail identity starts from the outside where the Dsquared2 logo shines over the
wooden wall. Mixing contemporary design with warm materials. Then the huge store has been
transformed into a sort of forest. Again mixing traditional and modern elements. Walls are
composed of timber planks stacked one upon the other and treated in an autoclave to
enhance the smell of sap and the natural use of wood. These walls are stationed near the
entrance where they accentuate the three dimensional effect of the window. And can be
rearranged according to the season, to the collections. The route through the store is given
rhythm via shift and partitions that create deep display niches along the longer walls. Female
and male collections are displayed in different areas. And mannequins animate the customer
journey. The men's section displays the full menswear lifestyle. From day to night. With of
course an emphasis on outfits for special occasions. Jeans, the iconic category are displayed in
a very accessible way giving a clear idea of the variety of styles. All products are presented via
regional display units such as, for instance, the tree trunks. From belts to shoes to sneakers.
Another successful category for the brand. Then fitting rooms are offering neat little chambers
with stone walls, fireplace and birch woods. They are also inhabited by deer. All generating a
surprising effect that is amplified by the mirrored surfaces all around. Then in terms of, visual
communication, multiple screens are showing beautiful images of the Canadian mountains
surmounted by deer horn-like fittings. That offer a almost surreal twist to the curious forest.
Then to raise your seven restaurant it was opened in 2013. This is located on the upper level of
the Square Milan headquarters. The imposing building in Via Ceresio, completed in 1940, to
house the state electricity company. And then renovated by the twins. This amazing restaurant
is a mix between a glamour resort and a showy membership club in the perfect spirit of the
brand. The place mixes modernist decor with dark colors, jeans and marble that frames a main
dining room, linked in floor to ceiling windows. A couple of pools. Poolside American bar, a
restaurant and a cigar room, all create an exciting atmosphere. The outdoor space, among
Milan's, skyscrapers, is a spectacular, place with the elevated pools. Large enough for
indulgent splashes of the glamorous Dean and Dan’s guests that can enjoy the place till late.

Hi everyone. We are at Vente-Privee Milan, and we are here with Federica Beneventi, a PR
manager for Vente-Privee, and Andreas Schmeidler who is a country manager for Italy. We are
going to ask them about the evolutions of online channels. Tell us a little bit about how the
channels are evolving and then we will talk about Vente-Privee. If you have to talk about
Europe, you have to make some differences between countries. There are some countries in
Europe like England, France, and Germany which are much more developed than Italy; this we
have to say in firstly. Italy is growing and in my opinion it's like a bomb that has to explode. In
the next year it will really grow. I hope that the numbers will be similar to that of these other
countries; this is the first thing. Anymore, online is a new channel of distribution which is
absolutely complementary to the retail of online shops, outlets, and traditional distribution of
all brands. This is the basis upon which we develop our business model and our mission. Thank
you very much Andreas. Federica, what about the business model of Vente-Privee, what is the
innovation brought into the business by this company? The most important thing that Vente-
Privee understood is that image for brands is becoming more and more important, and this is
also the case for luxury brands. What we understood is that we would like to help brands
transfer their image and products and sell them in a proper way without wasting their image,
also to create a new and complementary way to sell their brands. Okay. Last but not least,
what are the prospectives of Vente-Privee, and more generally online channels in the future?
We say, as our founder says that there is no “e-commerce,” there is no “m-commerce,” we
talk just about commerce. What is changing now is the consumer occasion, so what we would
like to do in the future for Vente-Privee is to continue our business of course, of serving
brands, but to be more and more like a portal, a point of reference for our customers and for
our brands. What we can see now as a new trend is of course mobile. It's very important
because it can boost e-commerce access. So this could be, in the future, one way to be more
and more present abroad, and here in Italy. In addition to this, I would say as well, especially
for Vente-Privee, one of its major functions is to help these brands to internationalize their
brand awareness. Of course we can export through a huge communication and huge traffic,
which every single morning arrives on Vente-Privee, their brand awareness. This is one of the
major reasons why most of the brands work with us as well. When a brand says I want to go
abroad, I want to start getting in touch with the French market or German market where it's
hard to make it, it's very hard to make it, maybe Vente-Privee could really be helpful for this
type of mission. Thank you very much. We understood that actually the online channel is not
only about e-commerce and sales, but more and more it also has to do with brand building,
with the building of image and awareness. So thank you very much, Federica and Andreas and
good luck to Ventee-Privee.

Hi, everyone. >> We're here to conclude

with a clip about new trends. >> New trends in terms of the evolution
of business models, branding, and evolution of communication. In the future luxury and

brands will face lots of complexities. The heterogeneity of national

markets from emerging to mature. The segmentation of the final

customer gender wise the emergence of the main consumer age

wise the emergence of millennials. Then there will be the complexity

of the global supply chain. The acceleration of technology. So all these will have an impact

not only on the product, not only on the communication. But more in general on how

business models will be designed. So our perspective for the future is to look at how business

models are made and how they will evolve. In the past we were used to

have quite focused roles. So the brand was in charge of

the image and the communication. Manufacturing companies were more focused

on technical skill in production, why retailers had to master, the retail

operation and, the sales channels. Now a days, more and more competitors

are looking for the same thing. Having a control from the design

down to the final customer. That means controlling,

mastering the end to end process. or, let's say the process end to end. And this of course
means that retailer

will become, retailers will become brands. Mastering communication. And manufacturing

such as in the case of the index group, or, manufactures will enter

into branding and retaining. As in the case for

instance of Lasofitca Group. Or at the end brands will become retailers as in the case of most

luxury brands that were used to manage in the past in particular brand and

product and communication. So we will see models that more and

more inbreds. They will take care of all

the elements of the business process. From the product design and

the supply chain down to the, sourcing and the location in-store, to the design

of the customer experience in-store. And all this process centered on

the customer and the individual market. But let's ask ourselves what is the impact

on the evolution of technology markets and this end to end process

based business model. The first consequence we see in the future

is that in terms of organization. Not only the entrepreneur,

not only the designer as was used to be in the past will be

the center of these companies. But the work will be carried out more and

more in teams. Cross-functional teams will take care

of complex process in the product. In retail. In communication. And they will be able to work

on newness on lead times. On creativity. Always taking into consideration

the entire process. And the business model as a whole. And in this perspective a major

role is played by the technology. So the technology will be an enabler

of this process-based and customer-based company. if, if it comes from retails or from brand

or from manufacturing and, new tools will help managers and cross-functional

teams to perform operations. From product life cycle

management tools to advanced merchandising

tools to tools that are. Taking into consideration all

the retail operations in-store in order to assure a better

management of inventories. Stocks of the customer experience,

of CRM and at the end in order to better focus the product

design on the specific store and, and the specific cluster of customer

in the specific market. So this is, more or less the machine. How the machine behind, luxury

fashion brands will evolve. But don't forget that this business is

very much about building the dream. Building the aspirational content. And so, let's ask ourself
then what

will be the role of creativity but even more the role of communication and

branding in the future. >> In a context where

Stafania describe it, the level of complexity is

getting higher and higher. Web companies have to succeed

in understated all markets and in showing off new markets. Where the same brand has to sell

both to new seniors and millennials. Where the physical and

virtual world have collided. How fashion and luxury brands

can create aspirational value. According to many experts

the mega-trend in communication is about

combining the emotional. So in a period of crisis

there is a losT of trust. And people search for

greater transparency. A personal relationship with brands,

together with rational. So having clear business goals and

measurable outcomes. In other words,

you need to create engagement. But you also need to

measure this influence. Speaking about engagement. Integration is key. And it is key because

is the way we live today. We wake up in the morning. And probably we check our status on

Facebook while having breakfast. Then we go to work and maybe we listen

to the music on our smartphone. We have a conversation

with our colleagues and in the meantime we are writing email,

we are doing Skype call. So there are no boundaries anymore between

the physical and the virtual world. And the same should be in the strategy of

fashion and luxury brands communication. So they should use the traditional media

in order to promote their presence on social media, by putting their

social media on their shopping bags, on their windows, in their advertising. They should open a
conversation in their traditional communication campaigns

by incorporating user-generated content. They can promote online events

that are going to happen offline. And so on and so forth. But what is more important is the

that the companies need to convey. A fundamental thought about

effective communication is that people are not going to believe in what

you say if they don't believe in you. In order for people to believe in what the brands say,

the message has to be authentic. What does this authenticity means

in the different market ranges? For luxury and designer brands, it has to deal with
communicating there

is a wide qualities unique and exciting. So it is the craftsmanship. It is the heritage. It is the

the labeling, of the product. It is the ingredient branding and

the sustainability. Premium brands have to convey strong and

emotional concepts in their advertising. But they also need to exploit the power

of the digital media in order to create strong online community that can

then convert into brand ambassadors. For fashion retailers the key drivers for

the product is that cheap and chic. And so it has to be for the communication. So on the one
hand the message has to

focus on the product convenience and the sales promotion. On the other one they

need to create a more intangible dimension by

working on capsule collection. By adding cobrandings with

fabric suppliers, and once again,

by highlighting their sustainability. In order to avoid any

criticism of social dumping. If there is one factor that

should be put on the top of the agenda of a heavy business model, this

is it, corporate social responsibility. Fashion and luxury are about beauty. But today,

we cannot have beauty without well being. So the companies need to commit themselves

to communicate, to call [INAUDIBLE] to have towards a better planet and towards

an improvement in the lives of people. In a short, the world aesthetic

should contain the ethic one. >> In this course we

talked about many topics. We discussed issues at global level. But we are in Italy. Milan. So
let's share some thoughts

about Italy as an European country with a long story

actually in fashion and luxury. One of the major and more interesting
advantage that a country such as Italy has in the global scenario Is that

of the country-of-origin effect. Right, Erica? So this might be, even for the future,

a, a, a, a, an advantage for our brands. >> Yes, Stefania. Country branding is very important.
And from this standpoint,

Italy has a natural competitive advantage, as customers from all over

the world associate very positive effects with Italy. But as far as creativity and

the making are concerned so there is the made in, that is a guarantee

for a product that is beautiful and well done but as well with

lifestyle that Italy stand for. It's a way of socializing with friends,

relaxing, stay in the family. It's an innocence of beauty. A natural attention to detail that is

granted by the fact that we are so lucky to live in an open air museum. And to be exposed
since our childhood to

an unique blend of creativity, character, and history. So this kind of positive association may
really lead the customer to have

a preference for Italian products, and that's why, most of the time, successful

fashion and luxury Italian brands do promote the Italian way of

living in their communication. But this is the strength of our system. However, today as we are
in a global

scenario, we also have to cha, we also have to face many challenges. Right, Stephania? >>
Unfortunately yes. Because let's hope that the world

will appreciate forever, the taste of Italian brands and what

is the message that we bring the world. But actually these companies

are facing a lots of challenges. I would name just a couple the first

is the entrepreneurial succession so these companies are usually first

generation and they need to find their way in a global world that is becoming

more and more competitive and when the scale of operation is

getting really wide and, and beak. And, a second element that is very

important is the issue of competences. Italy is a manufacturing country,

is still the place where luxury and fashion in the high end is made,
and we, face, an issue in, transferring these competencies

that were able for the last decades to create

Italian dream and also to build. The superiority of Italian brands and

Italian products at global level. So let's see what is going to happen.