The Benetton makeover

By

Dominique Muret

Published
Apr 16, 2014

The Benetton revolution is happening. On Tuesday April 15, the Italian apparel group unveiled its new store concept in Milan, one which marks a radical change to the company's business model in the retail market.

"In 2012 and especially 2013, we started on a new path by rethinking our business in terms of endings and renewal, but without forgetting our history. Our new business model is focused on the consumer, the retail client, toward the outside, and not like before, on the store network and inward," said Biagio Chiarolanza, CEO of the Benetton Group.

The company's remodeled Milan flagship marks a radical departure from the traditional Benetton store. The products are no longer arranged according to various typologies but rather by styles and themes, displayed in a fluid, diverse store layout made up of small spaces that group together different parts of the collection. Each section is defined by a theme and a specific set of colors, offering a total look and a few options to mix and match, including accessories — shoes, bags and a selection of bracelets, necklaces and earrings. Benetton is basically launching a large jewelry collection with its spring/summer 2014 collection. Other areas are entirely devoted to accessories such as shoes or eyewear.

Each one of these sections is equipped with a digital LED screen displaying images of models in outfits that correspond to each theme. Customers can use tablets to view clothing items in colors not currently stocked by the store and order them directly on site, just like a regular e-commerce purchase.

The store spans 1,500 square meters of retail space on three levels (the basement houses children's wear, the ground floor carries the women's line and the upper floor offers men's wear). The interior is very simple, in grey tones with a slightly industrial look. The idea is to create a space that is "inviting, functional and exciting." A springtime ambiance prevails throughout the store. The interior display system, dubbed "On Canvas," is inspired by the textile professions. The structures are easy-to-assemble, light metal tubes stretched with canvas that function as walls for dividing up the store's spaces and can be modified as needed.

Inside the store, the range is organized into three types of distinct styles — sophisticated, urban and young. In this first phase of its new path, Benetton has a strong focus on women's wear, which accounts for 80% of its total sales. "This collection is the product of a whole year of work. We gave ourselves time to think about who we wanted to be and what we wanted to offer," said Valentina Soster, the creative director of United Colors of Benetton. She is in charge of both the children's and adult lines, which are now grouped together.

"We decided that we wanted give the active woman products that she needs throughout her day, from morning to night, by mixing our usual very functional pieces with much more fashion-forward items," said Valentina Soster. “Now our basics are much more fashion, even though our products are still very recognizable for their Italian essence, their quality and their very affordable prices. We want to offer beauty in a democratic way," she said.

A few examples: a macramé dress for 39 euros, sweaters for 50 euros, chiffon print blouses for 20 euros, pants at 30 euros and high-heel suede shoes for 70 euros. The collection contains 560 pieces, 380 of those for women. The company refreshes the range for each of the four seasons so that the collection is always up to date with whatever trends have emerged in a few months’ time. So that Benetton can react in real time, all its stores cash registers will be linked to a central system that analyzes the best sellers and adjusts the range accordingly.

Color and knits, the brand's two original iconic elements, will still play a significant role in the new concept through the store's centrally located "colour room," a section that carries sweaters and knits. The same item is available in two versions and 24 colors, already packaged and ready for purchase, like in a self-service cafeteria.

"We are in the process of winning back a young clientele,” said Marco Picone, director of the United Colors of Benetton business unit. “While our competitors are specialized in just one sector, we now offer a good balance of functional and fashion. We are positioned in the mass market segment with an elegant product at an affordable price. Our new path starts now. But already the forecast looks promising. In this store, which has been opened a few days, sales have been two to three times better than our most optimistic expectations," he said.

The new format has been used to transform stores in Milan, Florence and Nice, with Verona and Moscow next in line. The idea is to roll out this new concept in the largest cities. The group invested 80 million euros in 2013 and has announced three additional annual investments of 100 million euros over the next three years. Italy accounts for 40% of overall sales and remains the Benetton group's primary market, followed by Europe, India, South Korea and Mexico. The number of single brand stores has dropped from 6500 to 6000. The company directly owns 600 of those stores.