Why Prada wears digital - the devil's in the detail

Stuart Lauchlan Profile picture for user slauchlan March 17, 2019
The devil wears Prada, but there's a need for a lot more to do so. Digital transformation comes into play...

An ongoing theme in diginomica’s retail sector coverage has been the question of how high-end, luxury brands react to digital transformation - embrace the Internet as a sales and marketing channel or ‘rise above it’. The correct response in most cases is to find a way to co-exist, but still some reject the inevitable.

But more and more, luxury retailers are waking up to the potential of digital and online platforms as well as fancy stores on 5th Avenue or Bond Street. It’s indicative of the changing mindset that when discussing the highlights of 2018, Prada founder and CEO Patrizio Bertelli cites the company starting on “full technological developments, both on the industrial side and in terms of digital communication”.

In pursuit of what the firm is calling “the digitalization of relations with customers”, Prada now regards its IT spend as an essential strategic asset to compete in a changing market with a wider digital transformation program in place.

That’s the responsibility of Lorenzo Bertelli, Head of Marketing and Communication, who pitches his role as:

supporting the transformation of the company…to ensure the Prada Group develops a best-in-class digital platform, that reaches old consumer interaction points without losing touch with our brand DNA.

To that end, there has been a staggered roll-out of e-commerce capabilities which Bertelli says saw “double digit growth” last year, both via Prada’s own efforts and through selected third-party e-tailers:

We've launched the new miumiu.com in Europe, new church.com and pasticceriamarchesi.com. We have announced access to Prada and Miu Miu’s online experience, which we call Pradasphere and the Miu Miu club. These are two emerging digital content archives, providing access to the brand, storytelling around products, special project and events. Our focus in 2019 will be to invest more on the omni-channel experience of our platform and improve our customer journeys.

We now have the technical capability that can be deployed to reach our consumer in a more efficient and effective way. As part of our broader digital transformation strategy, we're investing in technology to boost operational efficiency and effectiveness. Our investments are bringing benefits across the whole group impacting more and more aspect of the business and data activities.

In terms of third party e-tailers, the company’s relationship with luxury e-commerce platform Farfetch is the exemplar to date, although others may follow. Bertelli explains:

Farfetch is very important. We are looking to do some activity in the following months. We are working strongly with them…what you can sell on Farfetch is very related on what kind of activity you do on the other channels. We are trying to work more in a concerted way to develop growth on marketplaces and generally on e-tailers. So we have to take in consideration all the channel when you want to grow in marketplace especially. [At] the moment the only real marketplace where we are is Farfetch. We are looking to other marketplaces, but nothing has been decided yet because we’d like to see the market is ready for other marketplace. We are ready to go on other marketplaces, but for sure we have an eye on it and it is part of a wider a strategy.

Next steps

As for the ongoing digital transformation strategy, there’s more to come:

In terms of digital retail, we have the new mobile functionalities to the clientsphere in-store, like wish, stock amend, made-to-order, sales, analysis and newsletter. Investment in technology has been strengthened in order to improve the merchandising planning increasing particular the course of buying replenishment and forecasting.

[We have] better customer service thanks to the launch 2018 of five regional hubs in Milan, New York Tokyo, Shanghai and Hong Kong. In terms of CRM, we set up a data science team in 2018 and we are now implementing a data strategy through business analytics which will be used to better understand data, explain it for ad-hoc campaigns,, and at the same time we are increasing integration of data from stores and social media.

We are now finalizing the radio frequency identification project that will improve logistic management to gather information from product would share distributed through every channel. Finally, product integration will also be available through an app that we are developing. Finally continuing from the first half of the year, we are placing greater focus on digital communication, with projects driving brand engagement and increasing brand visibility.

Comms is seen as a critical part of the growth plan, with the digital budget split roughly 50/50 between the type of tech projects cited above and efforts to bring outreach and marketing into a social media age. This is starting to pay off on the latter front, argues Bertelli:

It's clear that the digital transformation has rather created relationship with consumer making them even more aware of their purchasing choice. In this context, communication takes on even more strategic importance to effectively reach our customer. With the object in mind, we will continue to invest in all our digital asset to create an increasing an increasing massive brand experience with the unique and engaging involvement at all touch points.

He cites a number of successes to date, including:

The re-launch of Linea Rossa in September 2018 was supported by a program of events travelling across New York, Hong Kong, Tokyo and Shanghai. The events were tailored based on the local clientele and the collection was well received was well received, so thanks to an effective digital campaign.

To support the Prada Cahier bag, which has now become a bestseller, we launched the digital campaign called Prada Delivery Man, which was a cinematographic project direct by Ryan Hope. As for Miu Miu, two video projects were very well received across social media. Iconic wardrobe and other conversation, both focus on the ready-to-wear collection.

There’s also the inevitable pursuit of the younger customer demographic that comes into play, he adds:

We're also launching new digital channels allowing us better reach younger and more local audience. For example, Twitter in Japan both for Prada and Miu Miu 2018, Kakao Talk in 2019, and the launch of Prada Spotify official profile is here to expand the Prada connection with the music world.

My take

There’s a recognition underpinning all of this that CEO Bertelli articulates when he says digital is making consumers "ever more aware of their purchasing choices" and will take on "an even more crucial importance.” That’s a reality that’s leading to what look like some pragmatic decisions from Prada. There’s a long way to go - the firm may be considered a retail institution, but it’s lost quite a bit of ground to rivals in recent years. The devil may wear Prada, but there's a need to make sure that others want to as well.

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