Overview

Fashion

Online fashion brands in search of credibility and excellence

Online first emerging brands are looking to the Made in Italy supply chains as a hub to develop their collections as the opportunities and key conditions for launching successful collaboration.

Online fashion brands in search of credibility and excellence

Online first emerging brands are looking to the Made in Italy supply chains as a hub to develop their collections as the opportunities and key conditions for launching successful collaboration.

Leaving aside the top luxury sector, emerging brands primarily utilize direct-to-consumer/online first models, and technology, use of data and artificial intelligence are their key elements in developing the product lines. One of the best-known examples is Stich-Fix, a US company, quoted on Nasdaq since 2017, whose turnover is about $1.4 billion.

In addition to haven chosen e-commerce as their preferred channel, these models base their business proposition on a mix of attractive designs, digital communications, sustainability, transparency and quality.

Specifically, intrinsic quality is the primary means of building credibility for all these brands with premium positioning. For this reason, Italian supply chainsthe same as the luxury onesare the chains of reference given their ability to combine quality with a strong sense of security in the storytelling.

Entering into the supply network of these players, which are primarily American or Asian, represents a real opportunity for Italian suppliers because they provide the supplier with enhanced value added, have “a-seasonal” models that make it possible to cover slow production periods, and concentrated (and often varied) model production volumes. On the other hand, working with emerging brands entails business risk for the supplier and additional effort in combining skills and expertise to provide the full service requested.

Especially critical is the creation of the relationship itself, in particular regarding the:

    • Scouting phase: supply companies are often invisible on the web;
    • Matching phase: difficulty in understanding the coherence between the type of product to develop, the competencies of the supplier company and the cultural fit with the brand;
    • Managing the relationship: often complex during the initial product development tests (product management).

In fact, especially over the last decade, Made in Italy suppliers have become accustomed to serving the luxury segment by developing production methods that are absolutely efficient, but one-of-a-kind and not easily adaptable to other models.

 

The major themes differentiating the two models are:
  • Managing the relationship: this the most obvious stumbling block, involving language but also the different training/outlooks of direct-to-consumer players who lack expertise and interest in the technical aspects, but are very focused on the overall result in terms of the mix of the look and price. Time frames and control are also critical because digital players expect virtually continuous (always on) support and immediate reaction and ongoing feedback.
  • Divergence from the consolidated luxury business model: this is the real reason why it is so difficult to create fruitful relationships between Made in Italy suppliers and emerging foreign players.

Supplier awareness of the opportunities offered by a relationship with a direct-to-consumer brand is the key aspect in ensuring the proper attention is given a project during the launch phase, despite the fact there is no assurance expected volumes will materialize. In fact, given that direct-to-consumer brands have no retail channel, in the eyes of the supplier they lack the “safety net” of the (significant) baseline orders required to maintain a physical retail outlet.

Because of this scenario, very few Italian suppliers are able to position themselves towards emerging foreign players, and normally they are the more structured and better-known companies in the sector, but not always the best-adapted to take part in the proposed project. A good experience that attempts to overcome this “mismatch” and provide greater opportunity, including for smaller artisans, is the Italian Artisan digital platform that currently brings together suppliers in the footwear and leather goods sector (approx. 250 companies total) and offers itself as a liaison with international retailers and brands (approx. 1000) looking to develop collections/capsules in Italy.




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