E-commerce and Digital Transformation:
The Numbers for Italy

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Italian ecommerce market - Stylight

On Wednesday 18th May, Stylight attended the E-commerce NetComm Forum in Milan, a two-day lab focussing on Italy’s digital landscape. Having been active in Italy since 2012 as the leading aggregator for fashion, for Stylight the event was not only the perfect opportunity to reflect and review the market evolution, but also the moment to evaluate and analyze the main drivers and trends for the upcoming year.

During the first plenary session, Roberto Liscia, President NetComm and Executive Board Member E-commerce Europe, underlined how e-commerce is not the market of the future, but the most strategic business tool for today’s companies.

In his opinion, e-commerce and digital transformation go hand in hand: “E-commerce is key to compete and companies must go through a digital transformation internally to fully take advantage of this strategic tool”, and we couldn’t agree more. E-commerce is no longer one of many channels to do business, it is a key element for any company’s strategy in order to be considered in their competitive framework.

Enabling e-commerce is not simply opening an online channel, doing it (and doing it right) means to have understood that it is necessary to develop skills, know-how and internal capabilities which will be able to drive the evolution of the entire company.

Italian ecommerce market - Online Shopping Customer Growth

Source: NetRetail, March 2016

Despite some difficulties that are quite well-known among the market experts, the Italian fashion market has shown how it is the fastest growing industry for online sales with growth developing into double-figures: +25% from 2015, which corresponds to 9% of all retail transactions.

What’s also quite impressive is the growth of home and living online sales with +40% from last year.

To conclude the conference, Alessandro Perego, Scientific Director of the Observatories of Digital Innovation of Politecnico School of Management of Milan, gave us a sneak peek of Italian data for 2016 and we can definitely see some clear trends for the digital development of our country.

What is e-commerce in Italy like? 2016 Trends and Forecasts

Here is a little overview of what’s going on right now in the “Bel Paese”:

– “Big data is the oil of the third millennium”. Four priorities for Italian businesses are:

  • Understand the customer journey → understanding the phases in which each customer is at any point in time, is key to obtain the purchase.
  • Integrate data → using information to increase client acquisition and retention rates;
  • Develop a new vision → embracing digital innovation as a strategic element;
  • Build competences → digital competences and e-leadership are still uncommon. Only 16% of Italians had a digital education, putting Italy in the bottom position within Europe.

– Smartphones and tablets play a key role in the future of e-commerce with 21% of online sales coming from mobile devices.

Italian ecommerce market - Mobile Purchases Growth

Purchases via App: 3.8 Million shoppers (Smartphone); 1.9 Million shoppers (Tablet). Source: Net Retail, March 2016

– “Omni-channel is the Italian way to do e-commerce” with an integration between the physical channel and online. The role of omni-channel strategies is particularly important, especially for luxury businesses where digital strategies redefine the relationship between clients and brands. During the workshop on “Omni-channel fashion – Digital redefines the relationship between luxury clients and brands”, Federico Gasparotto, E-commerce Strategy Lead for Accenture, showed the audience the following data:

  1. 78% of luxury clients search online before buying
  2. 63% of luxury companies invested in omni-channel solutions
  3. 87% of the investments focus on mobile projects
  4. On average a luxury client has 3.1 devices more devices, more time spent connected, higher spending potential online.

Additionally, digitally contactable clients (in the form of newsletters or other tools used to digitally engage potential customers) spend, on average, 20% more than anonymous or simply registered clients.

– “Info-commerce”: the possibility to verify info and prices online or reserve online products available in physical stores before going to buy them. The study presented, which considered 30,000 stores in 8 different industries, showed that 8.6% of the shops considered allow clients to buy online and pick-up in store, and 50% of them give the possibility to reserve online in advance to be sure that the product can be found at the physical store.

One point that was mentioned several times throughout the day is that digital transformation is not only marketing but requires a deep change in all areas of a business
The result was clear: Italian companies still have to address crucial aspects of e-commerce, such as e-payment, logistics, usability testing, legal matters, conversion rate optimization and organizational challenges. To cite Marc Sondermann, Editor in Chief of Fashion Magazine, “if a company invests 70% of its marketing budget on new media, but it generates less than 1% of their revenue online, there is something wrong”.

How to compete with success in the new digital markets

The second conference mainly focused on this topic with an interesting discussion on “Competences, management and processes to compete with success in the new digital markets”. The speakers brought up successful examples of companies which have embraced, and successfully completed, digital transformations. Giovanni Zezza, Head of Marketing Deliveroo Italia, for example, explained that one of the reasons for their success is their partnership with CartaSì for e-payments through the app, which allowed them to better profile their target group with geolocalized consumption habits.

On the logistics side, Giovanni Fiorilli, Head of Shipping EEC eBay Italy, discussed how for marketplaces, like eBay, the key is to set a standard process for shipping to facilitate vendors’ and clients’ experiences. As shipping terms are becoming more and more of a determining factor in users’ buying decisions, eBay recently launched a platform, integrated with Poste Italiane, where clients have higher transparency regarding the status of their orders and vendors can benefit from the services of selected partners and predefined costs.

Lastly, Gabriele Tazzari, R&D Manager at Yoox Net-a-Porter Group, clarified the benefits of the group’s partnership with IBM. With 27 million users, 10 million orders and 2 business models–mono brand (design and management of  mono-brand online stores for fashion brands) and multi brand (with the stores Yoox.com, Net-a-Porter, Mr Porter, The Corner, Shoescribe and The Outnet)–IBM’s solution helped the YNAP Group in managing complexity to create a pool of data to deliver a high quality customer experience and higher personalization in marketing messages for users.

These successful cases are only a few. Nevertheless, they can–and they should–be used as examples for all other Italian e-commerce companies to rethink their vision and develop those digital competencies that are required to compete nowadays (and have success) in the new digital market.

Do you also want to know how will fashion eCommerce shape the future in Spain? Read the 5 mayor insights straight from the Spanish market, from m-commerce to content.

|By Anna Grazioli – Business Development Manager Italy|

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