Prada Group Stefano Cantino: Electricity Supplier And Entity Attach Equal Importance To

Shanghai, China -- as China

The most prominent landmark of retailing, the curtain of the most prominent place in Hang Lung Plaza, Shanghai, was finally picked up last weekend, revealing a new look.

After Prada, the flagship store has a real face.

In this three layer of tribute to the artist Carlos Cruz-Diez, Prada is trying to make her Chinese customers feel intimate and luxurious. Large pieces of velvet, marble and glass are divided into one small salon. If you look carefully, you will find that the walls are even made of jacquard or pearl fish skin.

In 2012, the store opened the same way, but in the four years, the Prada group encountered tremendous changes.

Change.

Its overall revenue last year was almost 3 billion 547 million euros, which was almost flat compared with 2014, due to weaker sales and demand in the Greater China region, weaker global tourism and weaker consumer sentiment in the younger generation. This means that in the past year, its newly opened 24 Direct stores and 1 franchise stores contributed almost no growth.

Its net profit for the past year continued to decline for second consecutive years, a decline of about 330 million compared with the previous year's net profit of 27%.

Obviously, Prada's management is also aware of the severe market environment.

At the Finance Conference in New York, Stefano Cantino, the group's market communications and business development director, once said: it will focus on building a custom-centric culture and win the favor of consumers by using one-to-one marketing, customization, store marketing, digital marketing, e-commerce and other strategies. Try a few "buy and sell" mode, and adjust the prices in different regions.

At the same time, the group is also aware that with the continuous expansion of business, its Italian family management mode has to be changed.

Not long ago, Carlo Mazzi, chairman of Prada group, said it would strengthen its non family management and become a more structured management institution, and the management restructuring will be completed within the year.

In February this year, Donatello Galli, a chief financial officer who has worked for many years, resigned from Alessandra Cozzani and succeeded him.

What is the future of Prada reform? What will be done in the future? When its Hang Lung flagship store opens, Stefano Cantino, director of marketing and business development of Prada group, has an exclusive share with reporters on 10 issues, including China's market, electricity providers and price adjustment.

Reporter: what is the significance of re opening the flagship store in Shanghai's Hang Lung Plaza? Does this mean that Prada still has confidence in the Chinese market?

SC: Yes, first of all, I must say that this is one of our most important stores in China. The renovation is reopened because we feel that this very important store has a new appearance.

The appearance of the new store is quite different from what it used to be. Our idea is to display a new shopping experience in this important store.

Compared with the previous design, you will notice that there are many cubicles in the new store, so every compartment has different decoration and display modes.

Our idea is to provide consumers with a more intimate shopping environment, not only to make large space, but to make small rooms, have different kinds of products, have a more intimate and comfortable experience.

Reporter: many luxury brands are shutting down stores, but in the past few years, the Prada group is still expanding. Some analysts say that some of these new stores have not recorded a good return on investment (ROI).

Do you think the Prada group will continue to expand its retail network, especially in China?

SC: what I have to say is that we are expanding the retail network, but now we are rationalizing the existing retail network, so as with many brands, we also shut down some unprofitable stores, which is a simultaneous process.

In fact, we do not have any other new stores such as Hang Lung, which will be opened in 10 days. Our store in Guangdong Road, Hongkong will also be reopened.

Our retail network has been built, and now we need to rationalize everything.

Reporter: what do you think of Prada's future wholesale and retail business development?

SC: we are very confident. In fact, we think retail is definitely the best we have ever done.

Compared with wholesale business, our retail share accounts for more than 80% (according to the group's earnings report: 87.3% of its group's total sales come from retail channels, while the remaining 12.7% comes from wholesale channels). We think retail is still the main challenge in the future.

In some major department stores, such as Galeries Lafayette or Paris Spring Department Store (Printemps), in fact, the stores are also managed by us.

If tourists prefer to shop in a one-stop department store, they get the same service in these major department stores as we do in our own retail network.

There is basically no difference between the two stores.

{page_break}: now, in this era of uncertainty, all the super brands are facing problems like this or that. What do you think of this? Will Prada look for new growth points in the new direction?

SC: if we look at our new products carefully, you can see in general the expansion direction of our products.

I think that for Prada, the most important growth opportunity is to focus on our core business, mainly our advanced clothing, shoes and other products, and then talk about the expansion of new products.

Of course, there are other valuable commodity categories, such as jewellery and watches, but from now on, we feel that we should invest in and focus on existing products and do our core business well.

Of course, there are also great opportunities for growth in fragrance products. This is what our brand has been doing. Recently we introduced the latest fragrance and fragrance products of Prada, and the first fragrance of Miu Miu.

It was only after two years of preparation.

This is part of our new expansion in Prada group.

Home and hotels are not the areas we are interested in investing in.

Of course, we will focus on all areas of market demand, but we are more inclined to focus on fashion and shoe package core businesses before considering these areas.

Reporter: no matter overseas or in China, Prada's investment in the arts is not small.

What is the contribution of this investment to the performance? Will Chinese consumers be attracted by the Prada's passion for art, and will they be willing to pay the bill?

SC: for the Prada Fondazione (Prada), it is not a part of the marketing campaign, but rather a very personal passion. We have never regarded it as a marketing tool, nor from a business perspective.

Of course, this is very important for us. It is very respectable for a brand to have such a broad vision and culture. So I am sure that consumers also understand that in the world of Prada, we hope to share with them our ideas, vision and passion for art.

So I think from the point of view of public relations, we can have this foundation, museum or our concern for culture, which is also valuable to every consumer.

We can also feel the appreciation of our work and passion. A luxury group can have such enthusiasm for art, and our carefully launched products can perfectly stitch up Prada as a whole.

Reporter: for the current Chinese consumers, what are the ways and priorities of Prada communication with them?

SC: our first public relations tool is direct communication with customers, communication and dissemination of brands.

Secondly, we are constantly communicating with customers in print media, digital media and social media.

I think today's public relations communication must be globalized, but it should contain all kinds of rich voices and be realized through various channels and market data.

At present, digitization has become a more and more important channel for us. We have produced a lot of content for public relations.

For example, advertising can be video, and can be other forms or tools.

Therefore, no matter what kind of publicity we develop, we must have digital editions and produce specific digital content.

Digital things can be short videos, animations and so on. These will be the key means of our public relations communication activities.

Reporter: you mentioned digitalization, besides the public relations in the market, how about the part of the electricity supplier?

SC: the products we are offering on the website are consistent with our products in the store. There are many leather goods, accessories, shoes and fragrances.

But we do not think it is possible to sell advanced clothing on our own website. Maybe in the future.

For us, our own website and e-commerce retail partners belong to two different channels.

Therefore, we will cooperate with the best two luxury and fashion e-commerce sites, one is Net-a-Porter, the other is the promotion of Mytheresa for our garments, and we will also work with MrPorter to launch the first online men's series.

Reporter: do you think the electricity supplier is a supplementary channel for the current consumers? Or do they prefer to take it as the main shopping mode in the future?

SC: I think the electricity supplier undoubtedly represents a huge business opportunity.

For new potential consumers, such as the "millennial generation", this is undoubtedly a very important shopping method for them, but for our existing consumers, e-commerce online shopping is also becoming more and more important.

No matter what age and what generation of consumers will join the online shopping team.

Electronic commerce and offline sales must be equally valued. This has become the same market, larger market and various channels, so I do not think there should be any difference between physical stores and online stores.

Reporter: you mentioned before that you need to adjust the pricing of the Chinese market. How are you doing now?

SC: progress is not bad. Now consumers are traveling around the world and will no longer accept big price differentials in the domestic market and the European market.

We think we have to ensure that this is resolved.

However, because of the differences between European and Chinese import taxes and logistics costs, such differences still exist, but we should try our best to control them within acceptable limits.

Now, many consumers are very concerned about pricing, because everyone can check the pricing of the European market online.

Well, we now predict that the price differential interval will be 30%, some kinds of goods will be lower, others will be higher, but the overall proportion is almost within this price range. I think this is a generally accepted market.

Reporter: at present, Prada group is carrying out family management and new management reorganization. How is it going?

SC: our company is expanding, so the management organization needs to be changed. Therefore, from now on, some new duties have been arranged in the group, and it may change in management to become more structured management.

This is a gradual process, so we have to take it one step at a time.