So Prada delivered hugely disappointing results on Friday and promised some ideas about how it would turn itself around at a conference call on Monday. That call has happened. Are we any the wiser?
Yes we are. Prada, it seems, has finally got the digital message. And it really needed to. One of the most forward-looking brands on the style front, it’s been in the corner of the classroom with a dunce’s cap as far as digital is concerned (if you’re too young to get that analogy, look it up here).
The company was heavily criticised last year for its digital dunce status in reports by ContactLab and by L2 for having a pretty crappy digital offer that it now seems to realise isn’t good enough.
Chairman Carlo Mazzi started by saying he isn’t seeing any change in consumer behaviour, adding fairly cryptically “especially the new generations.” I can only assume this means that the brand just isn’t getting through to younger consumers who see digital as key.
Hopefully, that won’t be the case for long as head of strategic marketing, Stefano Cantino, said Prada now has a target of doubling e-tail revenues in two years. On the assumption that Prada group e-revenues aren’t currently that big, that may not seem to be too ambitious. But for a brand that has lagged on the digital front, it’s a sign that it has really woken up.
Interestingly, it’s not going to feel about in the dark as it aims to boost e-tail and said it would work with experienced e-tail partners like Yoox Net-A-Porter. So get ready for more of its product being available in multi brand e-stores. It will also boost its social media efforts and will be on Snapchat by October. While Burberry isn’t likely to be quaking in its very expensive boots just yet, it’s all heading in the right direction, albeit slowly.
The company’s growth should be achieved by adding categories online, such as shoes. But it seems we won’t be seeing clothing for sale online. It really is all about accessories for Prada and in this area it’s also promised lower prices and value for money. Don’t get too excited though as we’re still talking about prices well north of £1,000. There’ll be more bags at €1,200 to €1,400 and more “newness”.
Where does this digital focus and pricing strategy leave physical stores? Directly-operated stores were Prada’s holy grail during the last decade. It opened them at breakneck speed and at very high cost on the world’s key shopping streets. It won’t stop opening stores, but it’ll close some too and aims to boost productivity of each one at the same time. That includes boosting customer service.
That’s definitely a good thing. I’ve always found Miu Miu stores to be very friendly and welcoming but in Prada stores the atmosphere has often felt the exact opposite. “Since we have fewer customers coming to our stores we have to treat them very well,” Cantino said.
I must pay a visit some time soon.