Today we toured both the area of the Duomo and the Galleria Vittorio Emanuele II shopping mall as well as the Ticinese area. Both places had shops with windows filled with enticing products. However, the wares and clientele were not the same. We also had the privilege of receiving tours of two shops in the Ticinese area, one artisanal and the other modern. Despite these difference the shops had similar positions within the supply chain. The task for today is to compare and contrast the Galleria with the Ticinese area, as well as evaluate the place of the shops from the Ticinese area within the supply chain.
The Galleria in Milan is one of the most high end shopping places in both Italy and the world. While most of the people I observed at the Galleria were tourists, the shops contained within the Galleria were very high end luxury brands. On top of that I learned that rent in the Galleria is extremely high (Prada’s second store there pays a rent of eight million a year) so that more than likely affects both the item costs and the clientele that shop there. Due to these facts I would have to assume that the clientele were of the highly wealthy sort. In contrast the Ticinese area included stores that ranged from high end to affordable, but even the high end stores seemed affordable compared to the luxury brands of the Galleria. Stores included places like Zara, Adidas, or Herschel Supply Co, to more affordable brands like H&M. Additionally there were many Italian stores with unfamiliar names. Their prices and styles also ranged from fast fashion to high end. Due to the ranges of stores in the Ticinese area the clientele seemed more varied and diverse. The variety seemed good for both shoppers and storefronts as well as the many restaurants and gelato shops that scattered the streets.
Once we were into the Ticinese area we visited an artisanal leather shop by the name of Gravi. The artisan within gave us a glimpse of his workshop. He also explained the process of constructing purses, backpacks, and luggage, which are the leatherwares he specializes in. The artisan used Italian cow leather, but the other leathers, such as lizard and ostrich, have to be imported from out of country. The designs are also all his own or made to order from customer request. All bags are constructed in shop and sold at the attached store front. Due to these facts the store Gravi is both the manufacturer and the retailer to the customer. This makes the artisanal shop vertically integrated in this sense. Granted, there is an upstream supplier to the shop in terms of leather and other materials. Additionally, when details need to be added that cannot be done in-house Gravi uses outside contractors to add to the leather. While this is not done often, it complicates the supply chain. The bags in this store were in the the one to two hundred euro range due to the quality of materials and the artisanal craftsmanship.
After visiting Gravi we went to a different kind of leather backpack shop called IF Bags. The premise of IF bags was to get a bag personal to you. Under this premise you were able to select a pre-constructed shell of a leather drawstring bag. Next you selected the details of the bag, from the color of the drawstrings to the leather tips of the strings. IF Bags used products made in Italy to construct their bags. They also did the manufacturing of the shells of the bags outside Milan. The shell, strings, and tips were then assembled in store per your selections. These bags were also made of Italian leather and retailed starting at seventy nine euros. Due to the nature of the manufacturing IF Bags company was also vertically integrated, owning both its production factory and its retail stores were some manufacturing also takes place. However, IF Bags also has upstream suppliers in terms of its raw materials. Additionally, it commissions a shipping company for its online store, creating a downstream supplier to the final customer. The existence of IF Bag’s online store and its factory is largely what separates its supply chain from Gravi. Both stores created beautiful products and it was a pleasure to tour them.
After the tour was over we had the opportunity to enjoy dinner in the heart of Milan. A few of us ended up eating outside of a small restaurant along the canals of Milan. Something unique in Italy is the offering of aperitivo in the evenings, where you pay a flat fee, of five to ten euros at most restaurants, and they have an offering of food that you can enjoy for as long as you are at the restaurant. This was a welcome surprise and difference between Italy and the US and a great way to end a day of touring.