THE TALK: Business re-starts from the store
Let’s start with the coming opening of a Piero Milano sales point in Tokyo. Is the physical store acquiring more strength?
The store-opening in Tokyo is in the completion stage. We will be in Ginza, close to Harry Winston, a highly strategic position. For the rest, we will be re-starting from Central-Northern Europe, France, Switzerland and Germany and then the USA, a market which has grown considerably for us in the last four years. Once this serious crisis has been overcome, it will probably become our top market with distribution here and there. We resumed business on the American market four years ago but we don’t work with department stores because they are the type of customers that, in order to be profitable, need to be dealt with on a large scale with significant product quantities. We support sales with seasonal trunk shows and we reward our customers. However, the average purchasing price on the American market is much higher compared to Europe and Japan. To give an example, while it is hard to sell a fancy necklace in Europe, in the USA, it is much easier because they still hold events.
Production has re-started but movement is still limited, especially for an industry that relies on exports. Is that a problem?
Aside from the emergency we have had to face, obviously, the lockdown mainly helped us to keep relations with our customers alive and constant. Despite the closure, I continued to go to the office for administrative purposes. I was extremely dejected but, bit by bit, we re-started and I switched the machinery back on. But without travel, nothing works. In my opinion, on-line B2B is a pipe dream. We are trying but it is a long way from being of any real support to our turnover. The customer wants to see and touch. Without a physical store, we are not going anywhere, there is no business.
How are you managing the orders in terms of safe business measures?
At the moment there are obvious physiological difficulties because the customer cannot receive more than two people at a time. The work needs to be organized, even during the lunch break, for example. But things have not stopped, week by week, they are evolving. However, if we don’t return to normality, things will not be the same as before. Another example regards trade shows where the problems are more immediate due to meeting logistics. It takes two to serve the customer and the trade show is of fundamental importance. For us, we exhibit about 6 and 7 million of product cost at exhibitions. If there is no exhibition, where do I take my customer? I have to have meetings but I don’t have the strength of a big brand.
Have you reaped any opportunities from this forced lockdown?
We are companies that pursue the moment. Innovation needs energy, in other words, willing and dedicated staff. If you work in this way, it is difficult. Now we have had time to do it because, during hard times, you have to sort out the things that don’t work.
What does innovation mean for Piero Milano?
Innovation means change, both in terms of offer and in the all-round approach, from administration to product.
Who is the best customer and how are you managing the problems caused by the considerable fluctuation in the price of gold?
We work better with customers that take the initiative and propose the product without waiting for a request. Customers that manage to intercept needs and install trusting relations with the final consumer. We work more with diamond jewelry than products in gold which, given the price swings, is much more difficult and complicated to manage. Of course, besides working on the label, which has to be re-priced, a new product has to be studied based on the price of the raw material. Compared to the past, our jewelry is much lighter especially since a gram of gold makes a difference of about 200/300 Euro for the final customer.
How do you see Italian jewelry’s recovery?
Italian jewelry will always be ahead compared to certain other categories. I don’t think that the Chinese adversary can gain any further advantage. Take the question of import duty. If I have to pay 20-30% in import tax on gold in order to export and they only have to pay 2%, there is no way to do business. What I’m asking for is respect, not help. Especially when there is a competitor like China. Import tax is alright but it must be humane. We are in a reset moment and are open to compromises but compromise is one thing, barriers that we cannot manage are another. I make re-orders every day but I still have to present the new collections. Buyers are still very skeptical at the moment, but things can change day by day.
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