Luca Cappelletti: “Brands have to invested in digitalization and data collections and analysis”

Today we speak with Luca Cappelletti, Country manager Italy and Switzerland at Natuzzi. Luca shares with us his opinion about the current situation of the retail sector, regarding physical and online channels. He highlights that the brick and mortar retail stores will not disappear but they need to invest in digitalization and improve to keep its position among the market.

Luca also highlights the importance of focus on the 5 fundamental pillars of retail: Place, Product, People, Price, Promotion. Buy he would include technology and discipline to make the perfect retail store.

Enjoy this interview!

Retail Interview – Investments on digitalization and data

We start by assessing the current context of the retail sector. Will offline retail disappear?

Absolutely not. On one side, the online business will constantly growth especially in those segment where it’s not fully expressed yet, but the brick and mortar channel will be the place where the Brand gets in physical contact with the consumers communicating its values, quality and statements. This is even more true if we refer to the luxury brands. The two channels will be more and more supportive to each other growth. Consider that some research have proven that the most performing areas with e-com business where the areas where also a physical store was present, and not the opposite.

What are its defects and virtues in front of online retail?

The defects and virtues are different if we look at it from the point of view of the company or the consumer.

From a consumer point of view, the advantages of the online retail that are missing in the offline channel, are related to the choice, browsing, (you can compare many brands in a few seconds), you can have immediate feedback on the product and the brand from those who have already purchased it, you are protected by specific and much more protective laws on the possibility of withdrawal of the purchase, you can have the product delivered wherever you wish most of the time with just a tiny cost.

The virtues, as said, are mainly related to the connection that the brand can establish with the consumer. Even the most complete, user friendly and beautiful e-com site will never be able to transfer the inner soul of the brand which, in the end, will be the most strong vehicle of consumers loyalty and repeating businesses.

What is the biggest problem or weakness that offline retail has to face?

Main points:

• Market fluctuations and specific crisis will always impact offline retail more than online, this is a fact and those issues are hard to forecast.
• Store management in terms of cost, training and retention.
• The best commercial locations are shrinking with the effect that the square meter rent cost is increasing substantially.
• Physical retail is a set of details, each of which is necessary and fundamental. The lack of one of them makes the project weak and easily susceptible to failure (foot-fall counters, music program in store, digital fast payments, regular renewal of the concept, KPI’s control, high level of digitalization, scent experience, staff organization, product merchandising and visual merchandising, etc..)

In the current context, what role does technology and digitalization play in retail?

The brands that have most increased their value and turnover in the last 10 years are the brands that have invested in digitalization of the shopping experience and data collections and analysis, and communication about the sustainability of their products.

Highlight a current technology or innovation that you believe is setting a trend within digitalization

One trend that will be strong in the future: decrease the payment phase of the shopping experience of the consumers. To pay has to be something fast, barrier free and possibly will disappear in the future in the physical stores. Get your product and leave the store, you’ll pay automatically through digital systems.

What does it take for a store to work? Is there a magic recipe?

No magic recipies, “retail is detail” and ALL details must be respected in all the 5 pillars of the channel (Place, Product, People, Price, Promotion). Add to this “technology”, “digitalization” (keeping to innovate) and discipline, and the “magic” is done.

How is customer loyalty achieved?

Be honest! Always! To yourself, to your employees (they are your first advertisement investment) and to your consumer. To make money in a short period of time is possible even without a complicate organization, formula or product. To stay relevant in the market and to lead the competition with constantly increasing revenues takes passion for the details and respect of your values that have to come to reality through the quality of your products, the premiumness of your shopping experience, the sustainability of your actions.

How do you see the future of retail?

Fluid between online and offline, the physical perception of the place of purchase will increasingly decrease. However, the presence of both channels will be fundamental. The brick and mortar channel will not disappear and will have a still bright future for those ready to implement a structured (sometimes complicate) project. In this super competitive environment, the time of improvising or not meticulously applying the basics of retail is over.

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