Quality Italian leather is extraordinarily rare and extremely expensive—an assertion one IVY member seeks to debunk with his new fashion line, Armadio.
Fashion is changing. With e-commerce, it’s more possible than ever before for new start-up brands to emerge in the market. (Think Bonobos.) In a sea of high-price alternatives like Hermès or Michael Kors, IVY member Matteo Mattia Gemignani sees an opening for handmade quality Italian leather, sourced directly from artisans at lower price points.
“Being born in Tuscany and most of my friends being in the leather business for decades,” says Matteo, “I am aware of the real cost of Italian leather goods as well as the inability of these craftsmen to distribute their own products abroad.”
Matteo sat down with IVY Magazine to talk about launching his line through e-commerce and to take us inside the intricacies of the Italian leather market.
E-commerce is saving the fashion industry.
MMG: It feels even more real than at the store. The future is online.
10 years ago, the retail experts were sure about the failure of e-commerce in fashion. They thought it was impossible to sell apparel and accessories without having customers touching or trying the products first.
They were wrong. E-commerce actually proved the opposite. It developed the shopping experience in a way that connects and engages customers with the brand much more than classic retail. If before you had to rely on a sales representative, now through e-commerce, you hear straight from the founders, the designers, and you can interact with the brand (via socials, for example) expressing your feedback, appreciation, issues, and get an answer directly from it.
Brand names matter (much) less these days.
MMG: Especially for millennials. This is the generation of self-celebration. Millennials want to be unique; they hate the idea of wearing a sign that groups them with the rest of the community. For that reason they connect with brands that show a specific identity and are peculiar the same way millennials want to be.
Typically they want to wear a product and tell their friends the story behind it, instead of showing off the famous brand/logo on top of it. They shop the hidden, intrinsic value of a brand. They don’t want to buy a product based on its fame and cost; they want to buy its real value that they can weight on the storytelling.
That’s why direct-to-consumer is so popular. It connects the creator of a brand directly to the customer. It allows people to interact with the brand influencing their choices. It’s a 2-way process, where customers are actively engaged with a brands. This is the complete opposite of classic retail. It’s a single way of communication from the brand to the masses.
Customers want to see the behind-the-scenes and are tired to get told what’s luxury or what’s valuable. They believe they are smart enough to decide for themselves and want a brand to show all of its values and story in a transparent way so they can rely on it and eventually buy its products.
Italian leather is the best in the world—but it’s less expensive than you think.
MMG: Every piece of leather is different, and to tan it requires a lot of experience, knowledge and patience. Typically, an Italian tannery takes 24 hours to tan a leather, while Indian or Chinese tanneries take 6 or 8. The Italian process is more complex and of course slower, but it gives the customer the best leather on earth.
A quick example, leather has to smell like leather. If you use chemicals abundantly to speed up the tanning process, it will smell chemicals. This is an easy test to spot the quality, at very first level.
Also, the craftsmanship. Italian artisans developed their ability through several generations. They specialize in single products in specific geographical areas. This has helped the creation of districts that are focused only on specific products (Florence is known for bags and small accessories, while the “Marche” region is known for shoes), and artisans inherited the best practices from their fathers and developed it through generations.
It’s so expensive because the big brands—Ralph Lauren, Michael Kors, Hermes—are monopolists. There is no alternative. Historical fact is that they built their brands in such a good way that people actually think that Italian leather has an incredible cost and is hard to access, when it’s the opposite. Also, to increase their credibility and justify such high prices they built a retail network that is very expensive, so they need to have huge margin to make it work.
Leather artisans are at the mercy of big designers.
MMG: Let’s start from a fact. 90% of the worldwide luxury products are handcrafted in Italy. No matter where the brand is established, when it wants to produce an exclusive, luxury collection, it has to go to Italy.
It happens then those brands appoint, collection by collection, product by product, different small artisans in Italy, who are not their employees and cannot rely on working with the same brand every year. Intermediary companies help the brand to manage this process and leverage their power to lower the cost of the work of local artisans and increase competition among them to the point they need to work for zero margins to keep the relation with the intermediary/brand.
Considering the current economic crisis, they don’t have much a choice, and to pay the bills, they are forced to accept such terms.
The good news is that they also craft their amazing collections, but they aren’t able to distribute them. They have no digital presence, no access to capital, and most importantly they are makers, not sellers—selling is not what they are good at. So here it comes Armadio, offering an alternative distribution channel to reach international markets.
To make new (fashion) business work—you have to understand humans.
MMG: Fashion is a niche for business. Most investors don’t have any idea about how it works and, even worst, they try to apply the rules of other industries to it. That’s wrong.
Fashion is about feelings and connection between the brands and the customers. The ability of an entrepreneur is to create such connection and never disappoint his or her customers. If you believe this is you, don’t give up if results aren’t coming. No matter how hard it is to sell and develop your products, if you created such connection, you have a real business. It will be a matter of time for success.
Make sure you are selling a product that people want, ideally love. The secrets of success are not big numbers or famous investors—the economy has only 1 constant: every transaction is executed by humans. To make your business work, you have to understand humans, you have to stay close to your customer, understand their pain points, and give them a better solution.
IVY is a social university, dedicated to inspiring connection, collaboration, and growth. To learn more, visit IVY.com.