RETAIL STORES OPENINGS AND CUSTOMER EXPERIENCE IN INTERNATIONAL MARKETS. THE CASE OF ITALIAN LUXURY MANUFACTURING COMPANIES

Simone Guercini,Andrea Runfola 글로벌지식마케팅경영학회 2015 Global Fashion Management Conference Vol.2015 No.06

Introduction This article analyzes retail store openings of luxury fashion brands in international markets. Our aim is to point out the relevance of this market entry strategy as well as to highlight the main destination markets and different trends over the 2004-2013 period. More precisely, this article analyzes the role of the retail direct channel as a means to manage relationships with consumers in international markets. The choice to develop retail operations in international markets is considered in this article as one of the key strategies implemented by luxury manufacturing companies. However, it seems to have received minor attention in the academic literature dealing with internationalization (Guercini and Runfola, 2014). Consequently, the main aim of this article is to propose empirical evidence to support the widespread use of this strategy by luxury firms, proposing the analysis of an original database built on the retail store operations of a sample of Italian fashion luxury companies over the period 2004-2013. The retail marketing strategy is a peculiar strategy within the luxury marketing strategies. As stated by Kapferer and Bastien (2012), in fact, through retail store openings (and distribution in general), luxury companies may implement and take advantage from what has been defined by the authors the “watchword of luxury brand management” (p. 233) namely “experience”. In fact, the literature in the field of luxury retailing has pointed out the role of the point of sale from a consumer point of view to experience the value of a company. The discussion on the consumer perspective is increasing in the literature as testified by various contributions aimed at analyzing and discussing how and what kind of experiences could be transferred by the opening of retail stores and in what terms the luxury retail strategy differs from other retail marketing strategies (Dion and Arnould, 2011). The opening of retail stores from luxury companies has been considered within the stream of research on the internationalization of the company. It has been pointed out that companies with luxury positioning can differentiate their offering with respect to mass market retailers and open retail stores even in culturally distant markets (Hutchinson et al. 2009). These openings, however, are considered more as ways of promoting the brand, rather than a structural international retail development (Moore et al., 2010). In fact, it has been noticed that luxury griffes open retail stores quite exclusively in primary locations (Hutchinson et al. 2009) and that most of the internationalization literature on retail stores openings by luxury firms is referred to the opening of flagship stores (Moore et al., 2010), a specific retail store format that from its nature, is mostly related to brand promotion than to an effective and stable retail development. In fact, retailing as international market entry strategy implies significant investment both in economic and cognitive terms (Mattila el al., 2002; Guercini and Runfola, 2010). The study of retail stores opening as an entry strategy in international markets remains an understudied field of study in the academic literature, as evidenced for example by Ilonen et al. (2011) in their study on the importance of branded retail in manufacturers' international strategy. Moreover, the authors point out that among other things, this remains a topic of interest but not yet analyzed in the case of the fashion industry. Following this reasoning, our article aims to answer to the subsequent research questions: RQ1 - What is the evolution over time of the distribution investments of luxury fashion manufacturing companies? RQ2 - Is there a difference between emerging markets and advanced markets for luxury retail store openings? RQ3 - What is the role of metropolitan areas and how does this evolve over time? Methodology and discussion We investigate these research questions in the case of Italian luxury manufacturing companies. In order to study the expansion of Italian luxury companies, we have exploited the information contained in the database that we have created expressly for the purposes of this research. The database has been compiled by examining any news contained in two specialized and highly recognized national fashion-sector publications - Fashion and Pambianco Week - regarding the opening of retail outlets in foreign countries by Italian luxury firms in the decade 2004-2013. For the purpose of this research we have considered as luxury brands those brands that are members of Altagamma, a association whose members are Italian companies that operate at the highest end of the market, and those brands that are recognized globally and by academics and empirical press as luxury brands, although not being members of Altagamma. The above process has identified 594 sales points opened by 39 Italian brands in 62 countries over the period 2004-2013. The top 10 brands for number of store openings over this period are the followings: Prada (64), Salvatore Ferragamo (59), Miu Miu (51), Ermenegildo Zegna (31), Valentino (29), Armani (26), Versace (26), Gianfranco Ferrè (25), Brioni (22), Etro (22). Hereafter we try to describe some preliminary findings regarding the three research questions advanced previously. RQ1 – What is the evolution over time of the distribution investments of luxury fashion manufacturing companies? Our analysis seems to show an evolution in this growth strategy over the period 2004-2013. In fact, if during the period 2004-2008 our analysis shows the opening of 261 single-brand outlets by the enterprises of our sample, during the period 2009-2013 the number of operations became 333 stores. This seems to highlight how, even in a period of international crisis, the retail strategy for luxury companies remained fundamental for growing abroad. The year 2008 is the year with the maximum number of stores opened by our companies (95 stores, roughly 16% of the total 594 stores opened), while the year 2004 is the one with the minimum number of stores opened, only 35 stores (roughly 6%). Moreover, each year from 2009-2011 accounts for over 70 stores. RQ2- Is there a difference between emerging markets and advanced markets for luxury retail store openings? In order to distinguish between “mature”, developed countries and “emerging” ones, we considered the first 24 countries that joined firstly the OCSE as “mature”, while all the remaining countries have been considered “emerging”. Our analysis reveals during the period analyzed a growing incidence by emerging markets compared to mature markets, given that emerging markets account for 60.9% of the openings. Moreover, in each year analyzed emerging markets overcome advanced markets for number of stores opened. However, traditional mature markets for Italian luxury (such as USA or Japan) as well as new emerging markets (such as China and Russia) are within the top destinations all over the period. If we consider only the first three markets for number of retail operations we may note some differences between the two sub-periods. In fact, during the period 2004-2008 the first three markets listed for decreasing number of operations were the USA (45 retail stores opened, 17,2% of the total number of stores), China (29 stores, 11,1% of the total) and India (19 stores, 7,3% of the total). During the period 2009-2013, China increased the number of operations, becoming the leading market with 74 stores, representing 22,2% over the total, followed by the USA (46 stores, 13,2% of the total) and United Arab Emirates (15 stores, 4,5%). The rising of China in the second period, is associated with an increasing importance of other emerging markets such as Brazil and South Korea, that in the previous period were not within the top international destinations. We should however stress that other mature markets, such as France and Japan still have key roles for Italian luxury companies. RQ3 – What is the role of metropolitan areas and how does this evolve over time? Our analysis shows that the major cities world-wide are present in our database. In total the companies in our sample have opened stores in 163 cities. Over the period 2004-2013 the top 10 cities listed for decreasing number of stores are the following: Shanghai (30), Hong Kong (28), New York (25), Moscow (24), Tokyo (22), Paris (21), Dubai (20), London (20), Los Angeles (20), Beijing (20). However, as evidenced by the data, while in the period 2004-2008, the total number of cities targeted by the companies were 83, in the following period 2009-2013 the number cities targeted became 127. This data seems to highlight how, over time, the presence of luxury firms is not only concentrated in the top cities around the world neither only in luxury streets, but affects a larger number of cities and locations. Take for example the case of the new rising Chinese cities of the II, III and IV tiers. To conclude, our research points out how retail strategy implemented by luxury manufacturing companies is one of the driving strategy for relating the company with consumers in international markets. This strategy seems to represent a relevant and widespread used strategy to enter in foreign market and to develop the brand further. Some considerations are due on the limitations inherent in the present study, which can also furnish some useful indications as to future work. The empirical evidence reported here is based on secondary research in market publications. Aside from collecting further, more up-to-date information, future research should be addressed to performing a number of enterprise case studies in order to acquire a better understanding of the phenomena at play through contacts with luxury enterprise managers with whom to share the main aspects involved in establishing sales networks in foreign countries. Moreover, the considerations advanced are based on empirical evidence drawn solely from study of the Italian luxury fashion industry. In this sense, future research should aim to check if any differences exist in retail store openings between the Italian fashion system and the luxury fashion industries of other economically mature nations (e.g., France, the UK, Japan or the USA). Although, our empirical analysis has some limitations, it seems to confirm that the retail market strategy is a key strategy to relate with consumers in international markets and to let them “experience” the brand. For manufacturing companies in the luxury field this strategy should not be considered only in terms of promotion, as typically associated with the opening of flagship stores abroad. Rather, it represents an effective retail strategy with important implications from a managerial point of view. Considering this latter point, future research should be directed towards the study of the different strategic behaviors aiming at pointing out different strategic groups within our companies, for example in terms of company size or destination markets. In general terms, future research should be directed towards the study of the link between retail stores openings and customer experience in international markets. This issue has a particular relevance in the case of the Italian fashion industry, where understanding the retail strategy of luxury companies may contribute to recognize potential bandwagon effects of other companies in this sector, such as small and medium sized companies with other positioning.

HOW DOES FASHION CONSUMPTION RELATE TO SUSTAINABILITY? EVIDENCES FROM A LITERATURE REVIEW IN MARKETING JOURNALS

Andrea Runfola,Giulia Monteverde 글로벌지식마케팅경영학회 2021 Global Fashion Management Conference Vol.2021 No.11

SUSTAINABILITY AND BUYER-SELLER RELATIONSHIPS IN THE FASHION SUPPLY CHAIN: A RESEARCH AGENDA

Simone Guercini,Andrea Runfola,Enrico Baraldi 글로벌지식마케팅경영학회 2015 Global Fashion Management Conference Vol.2015 No.06

Heuristics in decision-making by exporting textiles SMEs

Simone Guercini,Runfola Andrea 한국마케팅과학회 2021 Journal of Global Fashion Marketing Vol.12 No.1

This article deals with the use of heuristics in the decision-making process of entrepreneurial exporting Small and Medium-Sized Enterprises (SMEs) in business-to-business settings. It specifically considers the textile industry. Heuristics can be defined as “simple rules” for cognition and action. The article points out the presence of a research gap in the literature on the decision-making of exporting SMEs and deals with the following research question: What heuristics are used in exporting decisions by SMEs in business-tobusiness markets? Empirically, it discusses the findings of seven case studies of Italian exporting textiles SMEs in business-tobusiness markets. The results reveal the widespread use of heuristics and formulate propositions about their features. Findings show that heuristics in exporting SMEs in the textile industry are perceived as effective tools for export decisions, corresponding to personal beliefs of the single decision-maker, intentionally built through experience, generalizable to different export markets, and time tested.

MATCHING BUSINESS MODELS THROUGH ADAPTATION IN BUSINESS RELATIONSHIPS: HOW DO SUPPLIERS COPE WITH FAST FASHION?

Simone Guercini,Andrea Runfola 글로벌지식마케팅경영학회 2018 Global Marketing Conference Vol.2018 No.07

This paper investigates the adaptation of suppliers’ business models to the changing customers relationships, with a focus on the fashion industry. The analysis of business models represents an understudied topic in business to business marketing research (Ehret, Kashyap and Wirtz, 2013; La Rocca and Snehota, 2017). In this regard, the paper tries to propose an original contribution by addressing the issue of how suppliers adapt their business models to cope with the needs of their fast fashion customers. It is well known that the fast fashion formula has represented an innovative business model which has generated huge changes within the fashion industry (Barnes and Lea-Greenwood, 2006). While, the business models of global brands, such as those of Zara or H&M, have been deeply studied, minor attention has been given to the business models of the suppliers that interact with this kind of players. Consequently, the paper addresses a research gap that regards the suppliers' business model changes due to the interaction with fast fashion clients. The paper has an exploratory nature. Methodologically, it proposes two qualitative case studies of suppliers in interaction with fast fashion suppliers, pointing out the main features of the adaptation of their business models in the relationship with these clients. The paper contributes to theory and managerial practice pointing out some drivers of change for suppliers with respect to the most evident characteristics of the business model of the buyers. It describes these drivers and proposes some relevant evidences to support the study of business models in business markets.

How do you depict sustainability? An analysis of images posted on Instagram by sustainable fashion companies

Milanesi Matilde,Kyrdoda Yuliia,Runfola Andrea 한국마케팅과학회 2022 Journal of Global Fashion Marketing Vol.13 No.2

Sustainability is strongly becoming imperative for all fashion companies to respond to stakeholders’ concerns and meet their expectations. While companies are more and more engaged in sustainability practices regarding all the activities carried out, there is also a growing opportunity for them to communicate it to reinforce the brand through various means. One of these is undoubtedly represented by social media. The social media landscape is increasingly characterized by the use of images as a highly impactful way of communication, with image-based social media such as Instagram that are experiencing significant growth among consumers and businesses. Consequently, the paper aims to understand how sustainability is depicted through Instagram by sustainable fashion companies. For these reasons, the paper investigates the use of images on Instagram by two sustainable fashion brands, Patagonia and Stella McCartney. To this aim, the paper employs the visual content analysis on over 300 pictures downloaded from the two corporate accounts on Instagram. The findings show the most used image categories to depict sustainability, and how such categories generate online interaction with users in terms of digital engagement. Implications for sustainable fashion companies and social media managers are provided.

Developing fashion retail operations to growth in emerging markets

Simone Guercini,Andrea Runfola 한국마케팅과학회 2019 Journal of Global Fashion Marketing Vol.10 No.2

This paper looks at the relations between the rise of emerging markets and the store openings of marketers from advanced countries. It focuses on the retail operations of Italian fashion brands that have opened sales points in order to gain entry into foreign markets. The paper presents an analysis of an expressly developed database of 2,141 store openings by 311 Italian fashion brands in 322 cities in 82 countries over the period 2006–2015. The analysis highlights a shift of brands stores openings from the developed countries toward emerging markets and discusses the impact of such trend and its relations with the heterogeneity of the firms and markets involved. Some propositions are then formulated regarding the consequences for brand marketers in the developed nations of this ongoing shift of wealth towards the emerging countries.

Problematizing customization and IT in the fashion industry: A case study of an Italian shoemaker

Andrea Perna,Andrea Runfola,Valerio Temperini,Gian Luca Gregori 한국마케팅과학회 2018 Journal of Global Fashion Marketing Vol.9 No.1

This paper focuses on the problematization of customization processes in the fashion industry. We investigate how companies may face and orchestrate customization processes that are based on the use of specifi c Information and Technology (IT) tools such as online sales confi gurators. Most studies on customization in fashion have considered the roles of consumers and their impact on the development of customization strategies. The co-development of customized goods – the choices concerning which IT system should be implemented to allow customers to design their products – has been studied extensively. We off er new insights into the extent to which customization represents an issue to be managed in business relationships, particularly among diff erent business actors involved in a supplier network. By considering the case of a shoe manufacturer we seek to answer to the following research questions: (1) How can a fashion company implement a customized solution via the Internet? (2) Which specifi c trade-off s aff ect the management of customization and IT when online customization must be linked to offl ine production? The paper concludes with implications and suggestions for further research.

Time in business-to-business interactions. A case analysis in textile and clothing

Simone Guercini,Silvia Ranfagni,Andrea Runfola 한국마케팅과학회 2014 Journal of Global Fashion Marketing Vol.5 No.1

The article analyzes the role of time in business network interactions. Its main aim is to examine time issues and fill a research gap regarding different market models anddifferent concepts of time. The methodology used is a case study to investigate a focal interaction in the fashion industry, between a firm considered to be the focal company, a luxury clothing manufacturer, and one of its main suppliers. From the research, two concepts of time emerge with regard to business networks: time as a product and time as a process. Combining literature and case analyses, it derives a correspondence between time as a process and interaction as adaptation, and time as a product and interaction as exchange. The findings of this study point to the need for further studies on time in business networks.

NAVIGATING THROUGH TURBULENT TIMES: GLOBAL AND LOCAL ACTORS IN THE LUXURY FASHION SUPPLY CHAIN

Simone Guercini,Matilde Milanesi,Andrea Runfola 글로벌지식마케팅경영학회 2021 Global Fashion Management Conference Vol.2021 No.11