Speakers at the inaugural Conde Nast International Luxury Conference in Florence (April 22-23 2015) emphasised the rapid pace of change in the modern
world and the importance of technology, particularly among today’s younger
generation.
Apple Watch designer Jony Ive started off proceedings by saying that technology was changing so fast these days that he does not know what will
be coming along in six months’ time, as everything is changing so fast.
Michele Norsa, CEO of Ferragamo, titled his session “A
Different Speed”. He stressed how fast the world was moving, declaring:
“Everything is moving at unbelievable speed”. He gave the example of the
Russian and Ukraine crisis – one minute the Russians were travelling around the
world and spending a lot of money, and the next minute the rouble had collapsed
and Russian travel numbers had significantly reduced.
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| Ferragamo CEO Michele Norsa (Photo: Vittorio Zunino Celotto/Getty Images for Conde Nast International Luxury Conference) |
THE IMPORTANCE OF CHINA
Norsa said that, despite the current economic slowdown in
China, he remained optimistic about the future spending potential of the
Chinese consumer, particularly the importance of Chinese travellers. He believes that the China luxury market will grow for the
next 5-10 years. He said that there had been a downturn in the Macau gambling
sector, which had affected retail sales on the island, but noted that Seoul Incheon wanted to install a casino near the airport. (At this point, International Vogue Editor Suzy Menkes laughed and said she could not believe this!)
Norsa said that it was in the Chinese DNA to gamble for
pleasure and not just for money. “As time spent in airports becomes longer, it makes sense
[to locate a casino near an airport]. Our customers are spending more time at
airports,” he stated. He said the Occupy Central protests had affected Hong Kong in a
“significant” way. However, he remains confident about Hong Kong’s future and that of the China market.
INDIA AND BRAZIL ARE THE FUTURE FOR LUXURY
The luxury industry had changed beyond recognition compared to what it was before, and this has surprised even the luxury industry itself, Norsa noted. He believes that India and Brazil will become two of the
biggest luxury markets in the future. Despite the big changes in the luxury industry,
luxury values had remained the same. He noted how Ferragamo sandals looked
similar today to how they had done 70 years before – but that now they were
perhaps lighter. “Feelings and inspirations remain the same; they don’t change
over the passing years,” he said.
MIDDLE EAST HAS RISEN RAPIDLY
Norsa believes that the Middle East market has grown at the
fastest pace of all markets over the past 25 years, and now boasts top hotels
and malls. Dubai is a centre of tourism from all over the world, and millions
of transit passengers pass through the airport for a short period of time.
KOREA AND JAPAN ARE RECEIVING HUGE TOURIST NUMBERS
Norsa noted the huge amount of Chinese travellers to Japan
and Korea. He said that the luxury market should “think positively
about gifting”, as bringing home gifts to friends, relations and colleagues was
very important among Asian travellers.
Norsa also observed the price gap between mainland China and
Europe. This is currently a challenge for luxury brands, he added.
The Japanese are travelling much more than before, he said, with huge
investment going into Ginza, for example.
IMPORTANCE OF TRAVEL RETAIL
Norsa cited figures from IATA revealing that global airline passenger demand rose 5.9% last year with record carryings of 3.3bn compared to 2013. “These numbers are interesting for Ferragamo. Ferragamo has
always invested in the potential of airports – not just for brand visibility,
but it’s a way to reach our rich target customers in a different way.”
BALANCE BETWEEN MEN’S AND WOMEN’S ITEMS
Interestingly, Norsa revealed that Ferragamo is aiming to achieve a balance between men’s and
women’s items in its product assortment: 60% women and 40% men. He wants to use all channels, e.g.
department stores, especially in the US.
THINKING ABOUT TOMORROW
Norsa stressed the importance inside Ferragamo of thinking
about the future. “At Ferragamo we have a fast, agile decision chain. We are
always thinking about tomorrow.”
