La Bottega Velasca Brand, Day 11

Our business visit today had many steps to help us understand the organizational structure of Velasca. This company is a direct-to-consumer business that sells completely Italian made shoes. Their inventory consists mostly of leather dress shoes, but they also offer moccasins, boat shoes, and sneakers that they target mainly to older, wealthy men. Our first encounter with their company was a lecture by their marketing director, who explained their strategy of using the internet to gain new customers. Then we visited their logistics center where off-season inventory is stored. Finally we visited their only Bottega in Milan. Though there all some other shoe companies with similar business structures as theirs, none operate completely in Italy. 

The brand Velasca is trying to establish relies heavily on being fully Italian made. In accordance with this mantra, their shoes are produced by Italian artisans in the Montegranaro region of Italy. We watched beautiful videos of the shoes being crafted using Italian leather, wood for the soles, and patterns carved by hand. Most of the shoes produced are leather dress shoes a businessman might wear everyday, or a man might wear to a special occasion such as a wedding, but Velasca also makes leather skater sneakers (thick flat white sole, like I might wear), leather boat shoes of the frat boy style, and many other shoe styles between. According to Paola, the marketing manager, the production of each shoe can take up to four weeks, so the company cannot quickly react to changes in demand. Thus the company makes use of the external logistics company we visited to stock their inventory in slower business seasons. The direct-to-consumer business model means Velasca does not sell to other retail store, thus saving money for the consumer. Thus the final cost the consumer pays is only made up of production costs and retail markup. 
Velasca is attempting to expand using the power of social media and online shopping. The company was founded only four years ago in hopes of selling online without opening storefronts that could waste money. Until about two years ago, the company operated only online, but because of high public demand they opened a storefront in Milan. Today, the single bottega accounts for 30% of their revenue while the rest of their revenue comes from online sales shipped directly to customers. Because the bottega was so successful, Velasca is opening another store in Rome. Eventually, Velasca hopes to expand their business to London, Paris, and New York City, but they are looking for more investors to make these expansions happen. According to Paola, the more immediate steps to improve the company are to improve customer care and get their brand to the public. 

In the meantime, the company strives to introduce new customers to their brand. Paola explained their method for getting customers to try the brand, which is by using internet advertising geared toward older, white collar men. An example of this advertising is facebook ads that only show up on the pages of users whose likes and ages reflect the target audience. As the customers continue to visit the Velasca website, the ads change to reflect the level of interest shown by the user. The internet has proven to be a more useful advertising tool than conventional print advertising because clicks and purchased can be more easily tracked. Paola knows how successful her Facebook ads are at getting a customer to buy Velasca shoes, while she would not have any such data from a billboard posted on a Milan rooftop. In addition, a billboard’s audience is limited to the number of people driving by it, but an internet ad can reach people outside the city, outside the country or across the world. Paola thinks online advertising is the way to expand get Velasca’s brand to be recognized before more storefronts are opened abroad. 

The Velasca brand is clear: Italian made shoes for an affordable price, which is due to their direct-to-consumer business model. Though they originally hoped to remain a strictly online company, the feel of a traditional shoe-seller was important to their customer base. Before Velasca can expand outside of Italy, they must continue to use their innovative communication system to get potential customers to learn their brand. With this business style and such a beautiful quality product, I bet I can look forward to a Bottega Velasca opening in my neighborhood in a few years.

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