Retex: I will not hide from you that the first point of interest is precisely your role, Digital Transformation Director. Regardless of its importance, it is a title that carries with it several possible meanings.
MR: In my case, the story with Pinko began even before I took on this role. I worked for the company as a consultant on the topic of omnichannel retailing and, then, we decided to continue together to give shape to a function that, across all lines of business was closer and more participatory to those. A different interpretation from the typical CIO role. In common intentions, our idea of digital transformation is more suited to accompany the continuous change of our way of being and operate on the market.
Digital transformation
Retex: I’ll try to interpret this: your tasks include managing the evolution and changes in a digital direction and growing a consequent business culture in every part of Pinko. Did I get close?
MR: I would say yes. I participate in the work of the various business units already in the setting stage, not just in the execution phase. It is an orientation that gives a different value and effectiveness to the action, and in this I can count on the support of our President.
Retex: The health emergency marked almost two years, which the sector paid heavily, but innovation benefited from it. What is your view?
MR: The pandemic has rewarded digitalization for everyone and today the curve has flattened because the process has matured and shows wide competition. The phygital issues are conceptually obvious and there are those who have responded to the need for change and those who are lagging behind, but now it is a matter of defining and governing the evolution of digital boutiques. The digital transformation models themselves are constantly evolving. For example, there is an indicative fact to consider: the expense of customer acquisition costs have become increasingly significant. In the income statement, they must now be considered a separate item, on a par with the rent of the premises.
Retex: If I look at the numbers from Confindustria Moda, in 2021 the industry’s revenues amounted to about €92 billion, up 22.2 percent, but there still remains a gap of 6.4 percent compared to 2019, when sales exceeded €98 billion. The first quarter of 2022, moreover, looks encouraging. Are you optimistic as well?
MR: Pinko held up well, and my optimism is justified. What was important was the result we achieved in China, a core market for us, where the lockdown was shorter and growth trends remained consistently high. I would say that we responded to the difficulties with flexibility in all phases of our work, from design to production and retail. In a difficult context like that, this has rewarded us.
Retex: Technology is certainly through innovation and, therefore, also the positioning on the market. My impression, though, is that when we talk about the one and the other, it is almost immediate to refer only to the customer experience. However, if we talk about digital transformation in its broadest sense, I would give due centrality to the internal aspects of the company.
MR: In the last business mile, if we want to call it that, the game is played with a lot of innovation added to the normal skills of those who work in the store and in any other business unit. In all of this, there is a common industry-wide nodal point that begs the question: how much digital culture needs to be built and distributed internally, to whom and how? Those in the company must be able to consistently refer their efforts to a common, known and shared vision. This is a basic aspect of our working model and an important change in the perspective of digital transformation itself. Let me say that you also arrive at the goals with a ‘humanistic’ approach: fine the new processes, fine the technology, but if you leave people behind you will not get anywhere.
Metaverse?
Retex: Let’s look to the future, just around the corner or not. Metaverse is the focus of everyone’s attention, and estimates of its value are many and varied. I will hazard a guess and say that not everything in the metaverse will be relevant for every brand and in every market segment. Fashion, however, is among the most active sectors in exploring the opportunities offered and will, in all likelihood, be among the most rewarded.
MR: In the short term, we won’t be doing significant volumes in metaverse, that’s for sure, but the thing to keep in mind is another. Those who bet on the Internet twenty or more years ago, did not gain an immediate commercial advantage; the skills gained then, however, came in handy later, and very much so. This, to tell you that those who experiment on metaverse today will have a competitive advantage tomorrow when, perhaps, it will be an established dimension of our world. You don’t decide on innovation in the morning to have done by evening. At Pinko, moreover, we recently launched a preview of an NFT drop at VivaTech, the Parisian fair dedicated to innovation. We expect an evolution towards an equivalent of the old fidelity system, fully digital and decentralised.
New models
Retex: Sustainability, in all its possible meanings, matters more and more in purchasing orientations: there are many consumers who like to reduce, reuse, and recycle clothing, and this makes second-hand garments a concrete option now. Websites selling preloved garments are enjoying growing fortunes and, meanwhile, even fast fashion leaders are paying attention to and investing in circularity. Second-hand is projected to be a business well in excess of $200 billion already by 2026. How do you see it?
MR: In Italy, for now, it seems to me that it is considered, for the most part, inconsistent with producers’ market strategies. I, on the other hand, think it is entirely complementary to these, for the reasons you mentioned about sustainability and for factors of more immediate importance. First, the resale confirmation allows you to maintain or raise the price of your garments and, second, it gives value to your product because it reinforces the perception of durability over time. Pinko is active on resale because the market demand is tangible and, indeed, we interpret it in an original way.
Retex: You’re referring to Pinko Play, I presume.
MR: Yes, because with this initiative we have focused on the concept of rental, combining the idea of sustainability with a strong innovation of the offer. We offer a subscription to allow buyers the continuous change of their wardrobe or even only to be able to have a solution for some particular occasion. To do this, we often make use of pre-used clothes. Pinko Play is in its infancy and, as with any other innovative operation, we are gradually adjusting our focus. But the response we have gotten thus far is comforting.