Artisinal Leather Shoes: The Return to Milan

We settled back into City of Milan today. We began the day with a presentation from the company Velasca on their operations and marketing strategy. Afterwards we took a trip outside the city to visit Fiege Logistics, the logistics company they contract. We finished off the day by returning to Milan to visit Velasca’s flagship store Bottega Velasca. Velasca sells artisan made men’s leather shoes. Their business model centers around cutting out middle-men giving them a unique structure.

Velasca’s main business comes from their business to customer model. Velasca as a company contracts artisans in south central Italy to create hand crafted leather shoes. These shoes are designed by Velasca’s in house designer. It is the goal of the company to only sell timeless shoes in a limited stock, so they carry only a few models in a few colors. They do not adjust their stock to conform with seasonal fashion trends. Due to this they have less excess stock and do not need to discount trends that go out of fashion as they do not produce any trends that go out of fashion. Once the shoes are crafted by the artisans they are sent to Fiege Logistics to be quality checked, stored, and prepared for shipping. Fiege Logistics is a unique company in that they warehouse stock for companies. Once orders are placed they prepare packages with the correct items for shipping. Fiege manages orders that are both business to business and business to customer. For the business to business orders Fiege Logistics uses their own trucks for shipping. For business to consumer orders outside shipping companies are used such as FedEx or UPS. 

Velasca’s role in their brand largely centers around connecting the customer to these artisan made shoes. Due to their desire to cut out the middleman, Velasca does this primarily by operating an online website in which the customer can order directly. Since Velasca does not sell to retail stores they do not have to account for those costs when pricing the shoes. They also have a small margin of price inflation for their brand compared to their competitors. Because of this Velasca’s shoes retail around 185 euros compared to their competitors who range from 400-1000 euros in cost. Because of this Velasca’s business centers around online sales. In order to build their brand they recently opened a storefront and are making good profits off of the storefront, but the goal is to continue to connect to global markets through the use of online sales.

Velasca connects to customer bases solely through digital marketing and word of mouth. They target audiences mainly through facebook ads and also try to secure email address from interested customers in order to connect with them through email. They also have been featured in digital fashion magazines that connect customers to their product. Velasca has also utilized influencers in their marketing strategy. One example of this is their shoe line “The Gentleman”. This shoe line was made in collaboration with a men’s formal fashion Instagrammer with a large following. This collaboration added the Instagrammer’s following to Velasca’s consumer base while also helping them create a more in-demand yet still timeless product. Velasca is very similar to a startup in the US in that they only started with a team of three people and an idea. Eventually they were able to secure backers and build this idea into a company. However, the idea of startups are much less common in Italy compared to the US and they are extremely difficult to create in Italy making Velasca a very impressive and adaptable company. Velasca projects growth in revenue its future. The hope is to keep growing the company for as long as possible, but there is a limit to the amount of product they are able to make due to the limit of artisans for hire. If Velasca’s demand becomes too great for the product they are able to produce they may need to consider joining a larger company, much like many startups in the US. 

For now Velasca produces a quality product at an unbelievable price compared to the competition. Their development in the field of e-commerce is impressive and innovative, especially for Italian businesses. They created a product and a company that they are proud of and they enjoy and it shows in all the people we interacted with. It was very educating to learn about Velasca.

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