Tips to conquer an Italian market

Italy is a priority market for fashion and ready-to-wear brands, hence the dedicated Italy workshop that took place during the 2018 Traffic trade show. Here we give you an overview and top tips from Anne-Laure Druguet, Director of Projects at the Fédération Française de Prêt à Porter Féminin, and Claudio Milani, CEO of Webhelp Payment Services in Italy and Greece.

"Italy is France's number 1 customer, followed by Germany, the United Kingdom, Spain and the United States," says Anne-Laure Druguet, Director of Projects at the Fédération Française de Prêt à Porter Féminin, who specialises in helping French brands export.

In fact, the nature of the Italian market appears to make it an unmissable opportunity for France's ready-to-wear brands:

  • €66 billion annually, with a positive trend
  • 10.5% of France's exports in terms of value (up 7.1% on 2016)
  • In 2016, Italian women spent 10 billion euros on clothes, with the Italian menswear sales volume approaching 7 billion euros.
  • Distribution: mainly through franchises, chain stores and the retail sector (47%), followed chiefly by multi-brand stores (24%), department stores (13%), and online sales (5%).
  • There are big differences between Italy's regions, with the North being a more buoyant market.

1 – Make sure you have the right agent in Italy

Our assessment above focuses more on quantity, but Claudio Milani, CEO of Webhelp Payment Services in Italy and Greece, was more interested in talking about quality: “There are a huge number of stores in Italy, even in small towns and villages. With the odd exception, you can't “sell on your own” in Italy; you have to go through one or more agents, at regional or national level. Contrastingly, committing to a retail network appears to be a risky business."

But should your agent be single-brand or multi-brand? Claudio Milani says, "A small or medium-sized company would be ill-advised to take on a single-brand agent."

And Anne-Laure Druguet adds, "It's important you have the right fit with your agent and ensure you have the same objectives and development potential. You must also make sure you pin down your methods, such as reporting frequency, and agree a mutually binding commitment in writing.”

The Federation offers French brands help with drawing up agent contracts.

Claudio Milani hammers home the point with a quip: "You know who our best allies are? Agents. And our worst enemies? Agents." Hence his advice: “Find the best possible fit between your brand, your products and your agent”.

2 – Choose the safest payment methods and conditions

Like any market, the Italian market has its own particular payment methods, conditions and practices.

Webhelp Payment Services takes care of customer collection management and trade receivable management and acts as an insurance intermediary in various countries, including Italy. This means that Webhelp Payment Services enables you to personalise your payment methods and conditions individually to each of your clients.

To find out more, and in particular for details of the payment methods and conditions best suited to the Italian market and the best way to protect yourself from non-payment, feel free to get in touch with Claudio Milani.

3 – Devise a strategy tailored to the Italian market

As Claudio Milani says, “It's not enough to set yourself financial objectives in penetrating the Italian market. You have to devise, challenge and then implement your own specific strategy”.

This strategy must be consistent with your brand identity and culture. "But beware of imposing your own rules: think globally but act locally," adds Claudio Milani.

4 – Find the balance between sales and finance

Claudio Milani's last piece of advice: “If you focus solely on increasing sales, you'll expose yourself to a lot of risks. And if you put too much emphasis on financial security, you're in danger of missing some great opportunities. You have to strike the right balance to be successful!"

 

For more information, go to our website.

 


International b2b e-commerce: mistakes to avoid

Increasing numbers of B2B businesses both large and small are setting their sights on trading internationally through an e-commerce platform. To give yourself the best chance of making a decent fist of it, Axel Mouquet, CEO of Webhelp Payment Services, proffers his advice and explains which mistakes to avoid.

At Webhelp Payment Services, we know all about trading internationally: we collect 80% of our payments (€1 billion a year) outside France on behalf of b2b vendors. And we cover 35 countries via 11 regional subsidiaries.

As a payment institution, at Webhelp Payment Services we help our clients to devise and manage their B2B payment strategy. Our shared objective is to improve the customer experience and develop a secure business.

To this end, we offer risk management, transaction management and non-payment management services, working internationally with brands such as Conrad, Aniel, IPH, Procsea, Conforama, Le Duff and Rungis International Market.

From day-to-day practice and our observation of the market, we have identified 5 avoidable mistakes:

  1. The 'everywhere-at-once, all-at-once' strategy. The temptation is to launch in several countries at the same time instead of introducing a gradual rollout (which is more advisable as we shall see later). In this faulty model, the starting point is often the home-country e-commerce website or the reference website, which is then cloned and rolled out simultaneously in the different languages and countries. Typically, this is done by employing translators to translate the existing content. But you can bet your bottom dollar (or euro) that it won't work!
  2. A succession of 'cut-and-paste' openings. In this variation on the faulty model above, the plan is to proceed country by country, simply 'cutting and pasting' from one site to the next. But here too you'll be heading for trouble, as B2B conventions vary hugely from country to country. You have to understand and follow not only the law but also business practice, decision-making cycles and order-validation circuits for example. It's therefore a no-brainer: you must redesign the site – and the customer experience – for each country or region.
  3. Staking everything on adwords. This is perhaps the costliest strategy: the company invests a fortune on buying adwords in the hope that this will capture demand. Of course, you must not neglect or forget about digital marketing, but human contact is important too! In B2B commerce, building a relationship of trust – between professionals – is crucial, especially when your business is starting out. You have to devise a sales force deployment strategy on the ground or operating in the local language. And later you will have to regularly tweak your mix of digital and on-the-ground presence.
  4. Over-centralising your business. Is your company based in Paris, Lyon or Bordeaux? Then it's there that all of your international operations will be based. We cannot say it often enough: in B2B you must ensure you have a physical presence local to your customers. And your customers will want to check that this presence is on offer, even if it is just a sales or logistics service. In B2B, digital commerce will never do away with borders completely!
  5. Having the same payment conditions everywhere. To speed things up when rolling out your B2B e-commerce platform internationally, it is tempting to standardise your payment conditions. But experience shows that even within Europe there are major differences here, and some of them may even put you at risk. There are differences between payment conditions, respecting payment deadlines, legal aspects of the market, etc., and you also have to take into account local competition, prices and products and services on offer. And in B2B, assessing customer credit risk is crucial. Webhelp offers a range of specific international commerce solutions.

In summary, our advice is not to spread your resources too thin and to tailor your offer to each locality. To become an international business you will have to identify the key success factors for each country and focus your efforts on them.

And here are 5 examples of approaches that work well, where we have helped our customers grow their B2B business internationally.

  1. Introduce a gradual, tailored rollout. The idea is to be realistic, starting with the country or region that appears to present the fewest operational difficulties and learning all the lessons you can before expanding elsewhere. On each occasion, you must take the time to understand the specific characteristics of the local demand. You should implement a carefully thought-out, localised approach incorporating co-design and co-construction.
  2. Use the marketplace model. The marketplace model has certainly proved its worth in B2C and now represents a tremendous opportunity in B2B since all the tools and methods are already available. This strategy enables you to construct your offer locally, minimising the risks, investment and any logistical problems involved. And you also have the option of signing up dependable salespeople with a good reputation who are already in place. At Webhelp, we think this model is becoming the go-to approach and that you should consider it very carefully. In other words, you'll have to have very good reasons not to adopt a marketplace-based approach!
  3. Make sure you have localised payment strategies. This is where Webhelp Payment Services comes in: devising, implementing and managing the complete payment circuit, with the option of including credit insurance, constructing a secure business model for the country in question and taking into account specific customer risks. In this respect we are able to provide tailor-made solutions on the basis of conventional or pooled distribution of profits/risks.
  4. Build locally with international partners. Your success is conditional upon knowing the ins and outs of B2B practices in the country or region concerned. Giving yourself the ability to identify and work with international partners gives you a decisive advantage. Especially if your growth objectives – organic or external – are ambitious.
  5. Develop a local sales force. As we have seen, B2B is not all about digital technology. You should consider gradually introducing sales forces on the ground.

References (in French)
B2B marketplace: the experiences of Aniel, Procsea and Metro
The B2B marketplace spring: modelling the impact of B2B marketplace strategies
[ITW] B2B marketplaces: the 4 main models and major trends
[CR 12.10] What strategies for your B2B marketplace?


Banks Are Not Just Being Challenged; They All Need to Change to Survive

I’ve written previously about the wave of “challenger banks” sweeping the UK banking and financial services market. There is a great opportunity for new brands to focus on improving service to the customer and taking market share from the big established brands.

But change in this market is coming from beyond new brands on the High Street alone. Digital banking is changing the banking sector in several ways:

Payment by phone

Services such as Apple Pay are now commonly accepted and stores with low-value items – like coffee chains – are experimenting with their own phone payment systems that connect into the loyalty programme. No more lost cardboard loyalty cards!

Niche services by app

Individual apps for individual banking services are here. Want to transfer money overseas? There will be an app offering this service. Want a loan to buy a car? Why not use a peer-to-peer app? Niche players are using the app store to offer almost every kind of possible banking service.

Location based services

Banks are already using location-based advertising across social networks so it’s only a small leap of the imagination to assume that they will use the same customer insight to directly offer their own services soon. For example, sending an offer on a loan if they can see you are spending more than usual in a month and are currently out shopping again.

Customer analytics

The data available on customers is now so complete that behaviour can be predicted before it takes place. For example, customers that will have trouble maintaining payments on their Visa card can be contacted before the problems become critical.

Omnichannel banking

It goes without saying that customers today expect the service at their bank to blend seamlessly between the branch and their online experience. But think about the reality – are most banks anywhere close to what customers expect? If you check out a new mortgage online and walk into a branch the next day, how would it affect your impression of the bank if the in-branch team were already aware of the type of mortgage you are interested in without you needing to explain all over again?

I think there is a potential existential crisis for the entire banking industry if they do not pay enough attention to these changes. Niche players offering individual financial services via apps can usually undercut the major banks because they do not have the overheads of a national branch network, so in theory these niche service providers should be able to win an enormous amount of business from the traditional banks.

Customer loyalty and inertia will prevent much of the potential business loss, but if customers are increasingly dissatisfied with the service they receive then they will look for an alternative. Why give customers a reason to go looking for a new service provider?

I think that a focus on how to deliver an omnichannel approach to customer service is now critical for all the major banks – as a way of retaining existing customers and for attracting new customers with a combination of their established brand and great service.

What do you think about the changing banking sector? Leave a comment here or get in touch via my LinkedIn profile.

 

Image courtesy Ken Teegardin.


Retail Banks: Are The Challenger Banks Enough?

UK retail banking has been through quite a change in the past 6 or 7 years from the previously unimagined bank runs on Northern Rock to nationalisation and back again. With the government now unwinding state investments in Lloyds and RBS and new ‘challenger’ brands emerging is the industry performing how customers expect?

No. Even with the High Street shake up driven by the challengers, this is an industry where customer expectations are diverging from what the banks are offering.

Look at retail for an example of how brands are reacting to customer expectations. House of Fraser is a great example as I was discussing some of their omnichannel strategy on LinkedIn last week. HoF is reorganising their management and customer focused teams to be driven entirely by the needs of their customer, whether that customer is in a store or online. They are removing the distinction and trying to offer a great service to all customers – not just those on preferred channels.

What is the reality in banking? Well, a recent publication by the British Bankers Association (BBA) features some revealing statistics:

  • 10.6 million banking app logins every day
  • 22.9 million banking apps downloaded
  • £2.9 billion a week transferred using apps
  • 43% decline in telephone contact to banks from 2008 to 2013
  • 6% decline in branch use in the past year

Look at the final two. Visits to bank branches are declining dramatically year on year and the use of telephone banking has been in freefall since 2008. Customers want more. They want the same convenience in banking that they can find from other industries – like retail.

Imagine going to a car dealer and being told that it’s easier to get a new car if you stick with the same manufacturer as your present one, and you can’t compare the prices of alternatives once the dealer gives you a quote on a vehicle?

It sounds absurd, but isn’t this how banks still treat customers? It’s often easier to get new products from the one that has your current account and if a product such as a loan or insurance is offered, how easy is it to run a quick comparison with a rival bank?

The challenger brands are shaking up retail banking on the High Street. Opening hours are being improved and services are becoming easier to purchase, but the entire industry is facing a new challenge from market entrants.

Companies that offer individual financial services are often able to give customers a better deal because they have a narrow product focus and no need to manage a branch network. Even big non-financial brands are offering financial services. You can ask car manufacturer Renault, or any of the big supermarkets, for a personal loan.

The Financial Tech (FinTech) market is also growing fast. Individual financial services offered via apps means that customers can download a tool, get a quick quote on a product and choose whether to use it, at any time of day or night.

So how can the challenger banks and the big established banking brands compete in this new world of financial services? By improving the customer experience. Customers still trust and respect their banks. This is where they have always conducted financial services and it remains the most obvious place to go for most customers. Peer-to-peer lending might be exploding in popularity, but it is still dwarfed by the amount of personal loans issued by the big banking brands.

But, as the BBA research indicates, if the gap between customer expectations and the reality of how banks treat customers get wider then there will be an exodus. Customers are already impatient. If the situation gets worse, the traditional brands and even the High Street challengers will look archaic in the way they treat customers.

What every bank executive needs to be thinking right now is how do I place the customer at the heart of what we do? How do we make it easy to ask questions? How do we make it easy to obtain services when the customer needs them? How do we make the customer journey so easy that banks inspire loyalty from happy customers?

The customer experience is now the number one priority for all banking brands, including the challengers, but it’s not just me saying this. Take a look at the BBA research for yourself by visiting their website here.

What do you think of the way that the challenger banks are changing UK banking and whether it is enough to keep up with customer expectations? Leave a comment here or tweet me on @DavidTurnerCXO