Today Paola, the digital marketing director of Velasca, gave us a presentation on the general history and framework of Velasca and also her specific digital marketing techniques for the company. After that, we visited the warehouse where the orders are stocked and then delivered to the customers and storefronts. Lastly, we visited the actual Bottega in Milan and talked for a bit with the co-founder, Jacopo, in his shop.
Velasca manufactures solely men’s shoes that are formal (except for the sneakers). Their target market is 25-55 year old men who have highly profitable professions like doctors, lawyers, businessmen, etc. Their shoes are meant to be worn at formal events like work, weddings, and special events. Velasca is not about fashion, which comes and goes. Bottega is about timeless designs that never go out of style like the oxford, tassel, and basic leather sneaker. Their colors are simple and pure shades of chestnuts, beiges and blacks. When there are extra shoes not sold in one season, they can simply keep them for another year and then resell them without anyone knowing they weren’t sold because their timeless styles never change as the rapid world of fashion does. Velasca designs its shoes and then goes to shoes artisans for the next step in the creation process. The shoes are hand-crafted by artisans which Velasca outsources from another company that also manufacturers for Tod’s, a famous luxury shoe brand. Once the shoes are created, they are sent to the warehouse to be check for any imperfections or packing mistakes, then either shipped to the flagship stores or the addresses of the online customers. Velasca runs a business to consumer operation. Velasca sells 70 percent of its shoes online and 30 percent at their two storefronts in Milan and Rome. Velasca only sells men’s shoes because it wants to be an expert in a shoe shopping experience exclusive to men.
Velasca is in the process of expanding its online markets across the world and increasing its investments to a goal of 5 million euros. With that much money, Velasca could invest in more expensive marketing techniques that they have not yet tried and invest in public influencers to increase brand awareness. They could also invest in expanding their production capacity, allowing them to create more shoes for their increasing international demand.
One company somewhat similar to Velasca in its business to consumer approach is ipsy. Ipsy’s clients pay for a yearly subscription of makeup that is delivered each month to the customer’s doorstep. Each month’s package contains a few trial size luxury makeup products which are hand picked by the team at ipsy every month, and all the products are from different brands. For example, during January I might get a NARS concealer, OPI nail polish, Urban Decay eye liner, etc. and the next month I’ll receive ten completely different products. This business model is similar to Velasca in that ipsy sells its bag directly to the consumer without any middleman like Ulta or Sephora, just like Velasca sells its shoes directly to its customers without a middleman like Nordstrom or Bloomingdale’s. Ipsy is different from Velasca in that it sells a product that consists of multiple different well known brands and its product (the beauty bag) is different every single month. Despite these similarities and differences, both companies gain profit in their own ways.
Velasca has many competitors in the world of luxury shoe brands, such as Church’s and Tod’s, which all make a similar luxury good. Church and Tod’s have such a lasting legacy and strong brand connotation that they can get away with charging 500 euros for a pair of shoes, but because Velasca was established in 2014, they cannot do that yet. Velasca differentiates itself from the other luxury shoe brands by charging only around 200 euros instead of 500. They can still make profits from this price because they cut out all the middleman wholesalers and retailers and sell directly to the customer online and in their flagship stores while Tod’s has to go through Nordstrom which gets a cut of their profits.
I agree with Velasca’s decision to market only to men, as women shoes is such an already saturated market. Specializing in creating and marketing for only one gender will benefit Velasca more at this point in the industry. I think that Velasca should invest more in marketing and open more stores across the world, because buying shoes in a store is less risky than ordering shoes online. Their brand’s “feel” is consistently vintage and masculine, and I think that men would appreciate a shoe shopping experience in their stores more so than online. Apple’s shopping experience is much more than just getting a product; you feel the smart technology around you and can play with the products in the store. Likewise, Bottega’s shopping experience is about more than just buying a pair of shoes.
Velasca has faced some difficulties as a startup in Italy. Because of the political setup of business regulations in Italy, it is extremely difficult to start a company in Italy. Paola explained that the taxes on startups in Italy are extremely high compared to America and that gaining investments in startups in Italy is extremely more difficult than in America. Despite these challenges, Velasca deals with them anyway to keep their beloved “Made in Italy” branding strategy alive. An economic factor that affects Velasca is people’s general willingness to pay for luxury brands depending on their income level and appreciation of the product. Because Velasca is a fairly affordable price compared to Tod’s or Church’s, they are more likely to attract customers who want luxury goods but cannot afford the brand name of Church’s. As Velasca’s brand awareness increases and they gain the revenues needed for investors to take them very seriously, they will eventually gain the investments needed to expand and continue to overcome the high price tag of being an all-Italian leather shoe company.
I enjoyed the thorough exploration of Bottega Velasca today because we got to see the business from multiple perspectives. I’m excited for more adventures tomorrow!