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Key take-aways


1. Draw on heritage, but don’t just be old


Longevity in the fickle world of business is to be admired, but to be relevant to today’s consumers, brands need not just to say they’re old, but to show that they’re old for a reason. Lavazza coffee, for instance, has been around since 1895; the brand tells the story of Luigi Lavazza’s unique blend, and how this has stood the test of time. And it’s adapted to the times, with innovations like the biodegradable coffee pod, a world away from the days of young Luigi’s voyage to South America. Similarly, Panettone Motta explains in its advertising that its recipe is unchanged for nearly a century, not for lack of imagination, but because while new ingredients fall in and out of fashion, their recipe remains the best.


2. Show you’re worth it


The rise of discount supermarkets and the growing availability of private label products are giving Italian consumers changing expectations of value for money. Private label sales now account for about 20 percent of sales of packaged goods, and this figure is rising steadily each year, with people snapping up not just private label store-cupboard staples but also more premium items. At the same time, discounters Lidl and Eurospin are the fastest-growing supermarket retail brands by some considerable margin. The challenge for brands, therefore, is to demonstrate value for money by offering something other than just a good product. The “extra something” might be quality or taste, but it can also be a more emotional connection that turns purchasing and consumption into an experience.


3. Be fast and flexible


As consumers get used to buying online, they are becoming less forgiving of some of the traditional hassles involved in bricks-and-mortar shopping. They want to shop when it suits them, they want more choice, delivery options, and they want everything faster and easier than before. These growing demands, and e-commerce vendors’ ability to meet them, are challenging physical retailers to do more than provide a place in which to carry out a transaction. It’s not possible to fight e-commerce on convenience – what could be simpler than a few clicks – but the physical shopping experience can provide an emotional and even more intimate connection with people that is far more memorable than shopping online. At the same time, however, retail brands can offer services that take away some of the less pleasant aspects of visiting a store, such as getting bulky items home, or even just out to their car.


4. Beware the big discount


In a price-sensitive market, one sure-fire way to catch consumers’ attention is to trim the price by just enough to undercut the competition. The trouble with this strategy, however, is that the competition can simply respond in kind, and before you know it, there’s a race to the bottom, margins have been slashed and customers have come to see your brand as cheap. Volume sales may keep ticking over, but value sales are lost, along with the equity built up in your brand. By some counts, one in every three or four supermarket items bought in Italy now is on special offer. Before offering even more for even less money, think about how better to justify a reasonable, sustainable price that doesn’t just bring in a few euros more now, but also adds value to a brand in the longer term.


5. Fight skepticism with authenticity


Across western Europe, consumers are becoming disillusioned with many of the brands they encounter, and it’s no different in Italy where only 9 percent of consumers describe brands generally as “honest and transparent”. But not all brands are equal, and brands that feel authentic to consumers can overcome skepticism, according to research by Cohn & Wolfe for its annual Authentic Brands ranking, which identifies Italian brands Barilla, Ferrari, Illy, Ferrero and COOP as bridging the “authenticity gap”. The most authentic brands get bought more and recommended more. Authentic brands aren’t immune from making mistakes, but their authentic pedigree makes them more easily forgiven if they make a correction. What authentic brands have in common is: They keep their promises on quality, they treat customers and their data well, and they communicate honesty and act with integrity.


6. The north-south divide is real

Italy’s North-South divide is not just about local rivalry; there are clear regional differences between people in different parts of the country and these broadly apply to the areas either north or south of Florence. The central and northern regions account for nearly 90 percent of exports, and there is significant disparity in family income – a difference of 15,000 euros on average between the most affluent area (Bolzano in the far north) and Sicily, the worst-off area, on average, where real deprivation is not uncommon. The economy is running at two speeds: unemployment rates in the south are double the rates of the center and north, and this adds up to different spending priorities and habits. National TV campaigns still have their place, but digital technology – particularly mobile - now allows greater precision of targeting, and this precision should be applied not just to different age groups but also geographically. Bear in mind, though, that while broadband access is widespread in the north, fast internet access in the south is definitely not the norm.


7. Watch the gender gap, and consider filling it


Women in Italy frequently feel typecast into roles as mothers and lovers, and are looking for society to reflect the new roles they wish for themselves, Kantar TNS research shows. Young women are looking for role models who are symbols of innovation and who demonstrate the ability to pursue their goals in a sensitive, positive ways; Italian astronaut Samantha Cristoforetti emerged as a popular symbol of the type of woman they would like to become. The lesson for brands is to avoid perpetuating stale stereotypes, particularly to a young audience who no longer identify with these roles as they once did. There is also an opportunity for brands to make it their mission to close the gender gap; brands should stand for something, and for some brands, this issue could be that thing.



8. Adapt to changing tastes

The Italian palate extends well beyond pasta, pizza and vino rosso; demand for gluten-free products is rising by more than 20 percent a year, with biscuits, cakes and other sweets top of the list. The gluten-free sector is now worth more than €175 million, according to industry estimates. Sales of lactose-free goods are also rising, though not at quite such a rate, and many people report adjusting their diets so they consume meat less frequently. Consumers are rethinking what they put on their plates, looking at ingredients lists carefully as they shop, and looking for the provenance of their food either on packaging or in communications. Items that are natural, sugar-free, GM-free, low-salt and “free of artificial colors” are all sought after. The organic food industry is also on the rise. Assobio (the National Association of Organic Food Producers), puts organic food sales in 2016 at more than €1 billion, accounting for 3 percent of total food sales. As in many other European countries, the arrival of immigrants from parts of North Africa and the Middle East is further diversifying the Italian palate. In future, FMCG brands will need to consider the shifting tastes of Italy’s population in order to feed the desire for new flavors.


9. Use the power of ‘Brand Italy’


Italian products are so highly regarded around the world that many businesses with no connection to the country make themselves look and sound Italian through their packaging, advertising or even by choosing a brand name that has an Italian ring to it. The cache of being Italian is particularly strong when linked to food, wine and fashion, but “Made in Italy” is a badge of honor in virtually any category. Italian brands in international markets need not just to promote their Italian heritage but think about how to distinguish themselves from potential imposters in their field. The current trend for “re-shoring”, that is bringing production of Italian goods back to Italy after a period of outsourcing, is being done because overseas buyers want goods that really are made in Italy.



10. Offer convenience to busy people


The Italian love of the long lunch has not diminished, but the hectic lives people now lead mean this is far from a daily occurrence. While consumers are still looking for great quality food, they’re also looking for simple, time-saving solutions to help them create everyday meals fast. Supermarkets report rising sales of single-portion meals and ready-to-eat meals generally – both fresh and frozen – and a decline in sales of store-cupboard staples such as bread, meat, cheese and breakfast items. It’s not just about saving time, though; buying ready meals also introduces an element of novelty into the diet. This search for new experiences and convenience extends beyond food; many products and services can meet this growing need.


11. Think again about loyalty


National retail chains and small individual stores usually have a loyalty scheme of some kind, offering a small discount on regular purchases, or a reward after a certain number or value of transactions. As a result, penetration of loyalty cards is high among Italian consumers, and many retailers are switching physical cards for digital memberships. But the popularity of loyalty cards, physical or virtual, should not be mistaken for actual loyalty; in fact, consumers will often have a loyalty card for several competitors in a single category, and they use whichever one suits them at a given time, which is not really loyalty at all. Think about loyalty in a more sophisticated way, using data to tailor special offers and services to the individual, and to create a more personalized experience in stores.


12. Responsible consumption is mainstream


Many consumers but especially the young are looking at the business and the supply chain behind the products and services they consider buying. Recycled or recyclable packaging can be the difference between making a sale. The idea of “zero waste” is gathering momentum, and parts of Italy lead the world in their rate of recycling. The town of Capannori, near Lucca in Tuscany, has led by example, countering plans for an incinerator there by reducing waste. The plan is to send no waste to landfill by 2020, and this town is not alone. Brands such as Illy, Nespresso and Lavazza have come up with recyclable coffee capsules. Similarly, Ferrero has spoken out about the need for responsible and sustainable use of palm oil in food, and several brands have launched products labeled free of palm oil.


13. Be more than just ‘green’


Being a responsible corporate citizen means more than showing you care for the environment. It’s also about being a good employer, supporting local traditions when that’s appropriate, and fostering good habits and strong communities. The fashion brand Ferragamo’s CSR program is called Responsible Passion, and it funds green projects, including promoting car-sharing among staff, along with providing education grants, sponsoring a running event and providing funds to the Uffizi gallery in Florence to allow more works to be displayed. Barilla also takes a broad approach to CSR, with a campaign that promotes the value of families eating together, plus sponsorship of Italy’s Paralympians in addition to its “Good for you, good for the planet, good for communities” mission.


14. Show, don’t explain


Italians are sophisticated consumers who don’t want to hear a great deal of detail about the specifications of a product or service in brand communications or even necessarily at the shelf. They can look online for further information, but they’re looking for inspiration and entertainment from advertising rather than a list of facts. If price or a key technical function is a brand’s main selling point then of course it must be featured in communications, but a brand experience should focus more on the emotional or practical effect of having that feature in a more subtle and memorable way. Make it easy for people to find out more by inviting them online.


15. Move from interruption to relevance


This is something brands in developed, ad-savvy markets are adapting to around the world and Italy is no exception. Consumers here are increasingly intolerant of intrusive advertising messages and are either flicking channels or installing ad blockers on their phones and computers. Kantar Millward Brown’s AdReaction study shows that 34 percent of internet users feel “stalked” by brands online, and half of millennials are using online ad blockers. Don’t try to beat them at their own game; instead, offer something that’s truly useful, funny, informative or entertaining that they want to engage with, whether that’s video content, a quiz, a real-world experience or something else. This might mean the brand has to take a backseat, presenting or sponsoring a piece of content rather than being the star of the show.


16. Mobile is a way to be part of important moments


As brands seek to be more relevant to consumers, they have to both use and respect the fact that the mobile phone is a highly intimate way of reaching someone, so the moment and the message had better be right. Comparisons done by the UK communications regulator, Ofcom, shows that across nine major world markets, Italians are the most likely to use their mobiles to book a hotel, book travel tickets and book a restaurant, and they are the biggest users of smart watches with 9 percent saying they have one, compared to just 5 percent in France and only 3 percent in Japan. This means that they’re more inclined to move from considering or browsing to actually buying without looking up from their screen, but only if the message and the moment are aligned.


17. ‘Old’ media still generate new sales.


While there is considerable – and justified – excitement about the marketing possibilities of the mobile screen, it’s the television screen that still attracts more consumer time each day. It accounts for half of all media investment in Italy, and not without good reason. For national reach, it is the obvious solution, with nation-wide followings for sporting events, nightly news, soap operas and game shows. TV sets are frequently on in bars and restaurants, so there is shared, public viewing going on as well as people watching in their homes. The best campaigns use multiple media in a way that plays to the strengths of each one. When Coca-Cola sponsored the World Cup, they linked TV coverage with a Trophy Tour supported by social media with the hashtag #lacoppaditutti, making the brand the catalyst for the creation of a story built on Italians’ collective memories.


18. Make it just like mamma used to make


Love of all things Italian isn’t just the preserve of discerning international consumers; Italian buyers love home-grown brands for categories they feel have a strong Italian connection. So while they might buy a US brand of sports shoe, few would for a moment consider drinking a non-Italian wine. Food, drink and high-end fashion all show a local preference for local goods, and not just for Italian produce but the produce that comes from the region or city where someone has grown up. This is not parochialism; it’s pride. For a great many categories, however, consumers are open to global brands or those from neighboring markets, and getting a smart buy is often more important than buying local. NESPRESSO, for instance, is not Italian but has achieved significant market share in the land of coffee by reinventing the category and the coffee experience. To describe someone as “furbo” in Italy is to pay them a great compliment – it means cunning, but in a complimentary way more like being astute or clever. And a smart purchase outranks a local purchase.



19. Be prepared to adapt for new markets


As small Italian brands expand into new markets, they should carry with them their Italian heritage and the factors that have made them a success in their home market, but also be prepared to adapt to cater to the local needs and preferences of consumers in other markets. Some of the biggest global brands have expanded by maintaining their core values as they enter new markets, but also by tweaking their products and their communications as they go. Think of McDonald’s and Sunsilk. Adapting is not selling out; it’s selling in. The bakery brand Corsini, founded in a Tuscan village in 1921, is one Italian exemplar of the power of localization, having made untraditionally large cantuccini biscuits for Starbucks to go with their large portions of coffee. They also sell a range of flavored panettone through Harrods and Sainsbury’s stores in the UK.


20. Think long term

BrandZ research over more than a decade consistently shows that the brands that consistently invest in communicating their strengths tend to ride out the ups and downs of economic cycles far more comfortably – and recover much faster – than those that don’t. Now is the right time to invest in building relationships with consumers, even for brands and products they can't afford or can’t afford to prioritize at the moment. Levels of disposable income are rebounding, and the young people who might be unemployed and short of cash right now won’t always be in this situation. Brands should foster familiarity and trust. They should plant the seeds of aspiration, and meet that aspiration with products and services that consumers’ needs as their lives change and their ability to spend increases, whether that’s for something as simple as shampoo and biscuits, or higher-end purchases like white goods, jewellery or even cars and real estate. Talk to people now, and they’ll remember you when they can afford to buy.