Two interesting stories have come out of Italy this past month which hint that the country has a few new suggestions to offer when it comes to minimising the impact of internet retail on existing businesses. Italian consumers have been slower to take internet retailing to their hearts than many other European markets, but online sales are building unstoppable momentum, growing by 23% in 2012. However, there are signs that some of the areas most at risk from internet retailing – smaller fashion brands and retailers, and even the national postal service – have decided to learn from the struggles of their peers in markets such as the UK and France and make the most of second-mover advantage.
In the traditional model of internet retail expansion in a European market such as Italy, more and more retailers would flock online, with pure-play operators taking an initial lead but losing some ground later on to the larger store-based chains able to leverage click-and-collect capabilities. Smaller stores, supporting more overheads than the pure-plays and unable to offer nationwide click-and-collect capabilities, would find themselves squeezed out, leaving brands with fewer and fewer routes to market.
Postal service taking care of website and delivery logistics for smaller-scale apparel brands
In Italy, however, there are some glimmers of hope for this category. Firstly, news at the end of February that the Italian postal service was in talks with its Russian counterpart to extend its Poste e-Commerce site to Russia, offering a portal for Russian consumers to buy from small to mid-sized Italian clothing and footwear manufacturers. Poste Italiane’s e-commerce site not only gave smaller companies an easy way to build an online presence but, vitally, it also takes care of the logistics of purchase and delivery. Extending the service to Russia puts participating brands in touch with a new consumer base and boosts their prospects beyond the Italian market. It is not a done deal yet, and even if it does happen there are some concerns about the reliability of the Russian postal service, but it is a positive move nevertheless.
New size survey should help cut down the cost of returns
This week comes news that Italian apparel companies are banding together to improve the sizing of Italian clothes. The SizeItaly survey will scan 6,000 men, women and children by the
end of the year, using 3D scanners to create a new framework for clothes sizing. It may not sound exciting but in the world of internet retail, where both brands and e-tailers are struggling to support the extra manufacturing and delivery costs of consumers buying multiple sizes of a product and returning those that do not fit, this could make a key difference, particularly for
smaller operators. If consumers have a clearer idea of what size they need to order then there will be fewer return items and it will be easier for both manufacturers and retailers to track demand and income, in turn making it easier to forecast production levels and order volumes correctly and – crucially – control costs. Sometimes, the beauty is in the detail.