Above: This picture was taken inside of If bags

Today we visit a much more commercially active part of Milan. Not only did we see incredible architecture from older time periods like in the Duomo, but we also experienced many different shopping centers. We started the day in the square where the Duomo is located. This is where we met our tour guide and began the walking tour for the day. Our first stop in the tour was the Galleria. The Galleria contained some of the most expensive and luxurious brands on today’s market. These included anything from Versace to Prada. The Galleria itself was beautiful and ornate making it a prime spot for these companies to set up shop in order to give the impression to their clientele that they are a cut above the rest. Also, the concentration of foot traffic through this area was very high meaning that there were a lot of potential customers for these shops.

After we explored the Galleria, we made our way to the Brera district. In this district, we toured and spoke with employees of two local shops. The first shop was a leather shop called Gravi. We spoke to the owner of the shop about all of his materials and designs. In his shop, he creates all of his products from scratch. While he may buy his leather from other sources, he takes the raw materials and makes them into either creations of his own design or sometimes even from a client’s mind. His work had actually established itself to the point where companies outside of Italy were purchasing products from his shop to sell themselves.

The second shop we visited was If bags. If bags started very similarly to Gravi meaning they also started as a small company. Eventually, however, after they began to gain some popularity, they began to expand the company by adding other stores throughout Italy and, eventually, throughout the world. They also have a website to make shopping with them easier and more accessible than ever before.

While both the shops in the Galleria and the Brera district are very similar in the products they sell (leather bags and other materials), there are many things that set them apart. The first major difference is their clientele. Business in the Galleria, like Prada, aren’t paying eight million dollars in rent every year because they like the way their shops are set up (well probably this plays a part but it’s not the whole reason). They pay that money mostly because they want the image that comes with it. People who shop at these stores aren’t always the most obsessed with the quality of the product as much as its name. They see the shop and its location and they know that purchasing this immediately gives the impression that they are of a higher class. These customers are loyal for as long as the company remains a symbol for high status. The second this changes, however, they will stop and move on to another company that fills that need.

The clientele of smaller shops like Gravi have a much different mentality. Its these customers that are looking for places for their quality. They find these shops that produce these fine goods by hand from local materials using local knowledge end help and they are immediately drawn to it. They not only feel like they are not only making a quality purchase because the know it’s made right in that shop, but they are also helping out a local member of their community, which is always a good thing.

Aside from their clientele, they also differ heavily in their supply chain. While companies like Prada and Versace tend to have vertical integration, where many of their facilities fit each of the roles in their supply chain, in an attempt to control what materials come in and what materials are produced, smaller companies tend to not have the means to do this. For example, Gravi purchases its leathers and other raw materials from other sources, which are then used to make the final product which is distributed to its clientele. This means that the shop itself is both a manufacturer and distributer of the good in the horizontally integrated supply chain.