CEO Talks: Acqua di Parma’s Laura Burdese Wants to ‘Yellow-fy’ the Market
MILAN — According to chromo therapy, the color yellow is considered to incite positive feelings like optimism, courage and vitality, in addition to encouraging communication.
Although each person can react to the color spectrum differently, such properties perfectly fit with Laura Burdese, chief executive officer and president of Acqua di Parma, the Italian niche fragrance label globally known for its signature yellow hat box packaging.
Controlled by LVMH Moët Hennessy Louis Vuitton since 2001, the brand hit the market way before niche scents became hot in the beauty industry and their demand boomed among consumers worldwide, who are increasingly looking for newness and exclusivity.
Just like today’s customers, in 1916 Italy native Baron Carlo Magnani was in search of a different scent and commissioned a perfume artisan in the Italian town of Parma to create a cologne, which resulted in the now-iconic Colonia scent, still the jewel-in-the-crown in the Acqua di Parma collection.
Offered in a timeless, Art Deco glass bottle, the scent rose to popularity in the Thirties and gained international success in the Fifties, when bespoke tailors’ shops used to spritz the fragrance on made-to-measure suits before handing them to their high-end clientele, including Hollywood actors of the time.
The label's aristocratic heritage was strengthened through the years as the company started to build on its Italian lifestyle and understated luxury image introducing new colonias; the “Collezione Barbiere” line of shaving products; the "Blue Mediterraneo” and “Blue Mediterraneo Italian Resort” fragrances and cosmetics inspired by the most exclusive locations on the Italian Mediterranean; home fragrances, and leather accessories, among others.
But how to stay relevant after a century and competitive in such a crowded market? Tapping the right executive surely helps.
A former president and ceo of CK Calvin Klein Watch and Jewelry Co. Ltd. and counting previous experiences at Beiersdorf and L’Oréal, Burdese joined Acqua di Parma in 2016, working ever since on revisiting the brand equity to make it attractive for the modern consumer and revamping the appeal of its products across all the label’s touch points.
Beginning in 2017, the company unleashed a digital-heavy marketing campaign, leveraging the emotional factor and winking to a younger audience. This year, Acqua di Parma launched a home collection and made its debut in the Chinese market via Tmall. Most recently, the company embarked in a restyling of its doors globally, starting with the Milanese flagship located in the city’s Golden Triangle, which just reopened its doors with an interior concept curated by LVMH architect Patricia Grosdemange.
The intimate space features an essential design dominated by sophisticated travertine walls and flooring, geometrically chiseled wood furniture in different shades and marble details, as well as the iconic yellow packaging elevated as a decorative element on the walls. The natural light seeping through wide, arched windows contributes to the appeal of the location, which is divided into different rooms to create a homey mood and showcase the various product categories. A private area offers men’s grooming and shaving services; a studio invites guests to discover the lifestyle collections, while across all the spaces digital implementations — such as an interactive fragrance finder — encourage customers to discover the ingredients and storytelling of each scent.
“This development of the brand finds maximum expression in our Milan flagship, which we call our house of light and of life, an Italian home that wants to offer our customers a complete immersion in the most sophisticated Italian lifestyle,” enthused Burdese on the concept.
It was just a hint of her bubbly personality and sparkling energy that emerged from this extensive interview, during which the executive discussed the changes since she joined the company, how a historic label can fit in today’s world and what still needs to be done to boost the “yellow-zation” of the market.
WWD: What did you find when you joined the company and how has the brand evolved since your appointment?
Laura Burdese: I found a rough diamond, a really beautiful, small company made of incredible and skilled people who have a huge passion for this brand and who had determined its success for the past century. I arrived and spent my first 100 days meeting people, talking with all the teams, both at the headquarters and in the international offices we have, talking with our main stakeholders, with the press, with the brand’s lovers and with potential clients just to really get a 360-degree idea of a brand that I knew as an Italian but didn’t know that deeply in terms of heritage and product. And I got a very clear idea of a brand with huge history, centered on the product and a high quality, 100 percent Italian but maybe still rough, that needed to be brought back to life, so that’s what we have been trying to do for two years.
So we’re really trying to keep the heritage and legacy of such a brand but without caging it, rather trying to use these assets as a springboard to bring back to light this brand again and make it meaningful and relevant in today’s world, significant for today’s audience and for the future generations. And this has been our guideline during this two-year journey from a point of view of product and communication. The first step was really to restart from the roots, tweaking the brand equity and injecting new energy and emotion. I’m talking about emotion as the label’s communication had always been very product-centric, as it focused on the high quality of the product offering. But to be honest, this brand is much more than a simple product and today making fantastic products is no longer enough. We need to connect and relate with our customers, and we tried to do this by injecting emotions into the brand communication, so people and real families, telling an authentic story of generations, which is very Acqua di Parma, especially of the Colonia product and the Barbiere collection. We narrate this generational handover with black-and-white images and our signature yellow, but we didn’t invent anything, the elements were all there. The Acqua di Parma yellow color has been the same for 100 years, the flacon is our historic flacon, the Colonia has had the same formulation for the past 103 years: all the ingredients were there, we just cooked them in a slightly different way adding emotions that could convey the timeless feature of this brand in a way that is more functional to connect and engage with the audience.
WWD: How would you define Acqua di Parma in three words?
L.B.: This brand is quintessentially Italian, genuinely sophisticated and vibrantly alive. We are 100 percent Made in Italy, everything is done here, including the boxes, which are still manufactured by small families of craftsmen in or near Parma. It’s genuinely sophisticated because is a luxury label, but in a genuine way, not show-off but very understated.…And then there’s this concept of vibrantly alive as it’s not a brand that has remained a prisoner of its heritage and traditions but managed to convey all this history with an energy and dynamism — which our yellow embodies and expresses very well.
WWD: Has the perception customers have of the brand changed so far?
L.B.: It’s slightly changing. Rome wasn’t built in a day so it takes time. There has been a study phase, a strategic phase, then we started to communicate, so before clients across the world notice this change, it takes a little more time. But what’s significant is that data show improvements. We just did the same research we commissioned when I joined the company to study the brand awareness and impact of the color yellow…and all the indicators improved, just like the qualitative feedbacks we receive from the markets and that confirms the perception that the brand is more visible, dynamic and contemporary. Moreover, we’re trying to implement this new strategy on all touch points, not just in the communication but also in the sales points, which for us are our first media because you can communicate the brand very well but fragrances need to be smelled. So our sales points are essential and remain our first media even in such a digital era. We invest a lot on them and we have this new, beautiful concept which answers to our new equity and our “yellow-zation” mission.…So changes are starting to be visible and are extremely positive, which encourage us and confirm we are moving in the right direction.
WWD: Which are the most performing markets and the emerging ones you’re banking on?
L.B.: Our first market remains Italy, which accounts for 20 percent of our global revenues, while the complete EMEA region accounts approximately for 60 percent. These are our mature, historic markets but Italy aside, which is going very well and growing double-digit, Europe in general is struggling a little bit compared to other regions that are still small but are growing. France has struggled in the last year, the U.K. has the question mark of Brexit upon it so, of course, customers’ intention to purchase dramatically slowed down. So in these European markets we grow, but far less compared to the rest of the world. Having the ambition of being even more global, in the last couple of years worked to get traction in other markets. We are really performing well in the U.S., Canada and in Asia, with China on top. The world of beauty is huge in the Chinese market, but fragrances still have a small share, because historically Chinese customers were not used to using scents, so fragrances account for 7 to 8 percent out of the total beauty market there. It’s a small percentage compared to makeup and skin care but it’s growing a lot because Chinese went through an epochal shift by approaching fragrances starting from niche scents. The niche market in general is really booming, so we’re growing in China and in the rest of Asia due to this. We’re opening stores there, we already had two stores in China and we will have added three more by the end of 2019, plus we have expansion plans in Asia.
WWD: How much does Asia account for your business right now?
L.B.: The whole Asian market at the moment represents less than 15 percent, half of which is accounted for by China and half by the other countries, including Hong Kong, Singapore, Malaysia, Thailand, Japan and South Korea. For instance, South Korea is really important for us right now, our “Blu Mediterraneo” collection is performing very well there and in Asia in general because, luckily, local customers love this kind of light, citrus-y fragrances and they adore the storytelling linked to Italy and all these incredible places they have never visited. They have this strong sense of discovery and we always had the storytelling , so this is a very easy to play with them. And they love especially the “Mirto di Panarea” and “Fico di Amalfi” fragrances so much that we are having problems — still “good” problems to have — in being reactive with the supply chain, because we didn’t expect such a fast and powerful reaction. So now we need to understand how to manage our supply chain, which is still so linked to the craftsmanship, and answer to the fast demands we are having on particular products from specific countries. We’re lucky because, compared to other bigger players, for us Asia is still a small market, we really have a huge room for improvement and that’s the reason we’re very excited and can forecast a bright future there.
WWD: Regarding Italy, how do you see the state of beauty here?
L.B.: Well, if you look at The NPD Group data, the market is positive, fragrances are performing well, makeup is slightly slowing down compared to the boom of the past couple of years — during which it grew hugely — and skin care is holding on, so if you look at the numbers the market is overall positive. But in reality, it’s not all a bed of roses.The brick-and-mortar world is weary, difficult and has become extremely promotional. It’s “la guerre ,” a very complex world with lights and shadows. So I wouldn’t be that negative because numbers show a market with a certain dynamism, but you also need to go beyond numbers. At the same time, Italy is extremely behind in e-tailing as e-tailers here are still few, but this channel is developing quickly. In the next 12 months we will have two key Italian department stores debuting their e-commerce channels, joining the three to five current big players, but we’re still small compared to the rest of Europe, and even smaller considering the rest of the world. So I see lots of room to grow for those retailers who will be able to seize the opportunities of this new beauty market, also in Italy. The market here is changing, but more slowly compared to the dynamics in other regions. Then there are interesting phenomena, especially in makeup with these new Insta-brands coming from the U.S., but also in the world of fragrances if you consider that the so-called niche perfumery was so small 10 years ago and now it has become relevant and the overall growth of the fragrance category is due to the increase of the artisanal scents which are giving a new dynamism to the whole industry. And there's also novelty with new fragrances that are solid or can be applied by brush…so I must admit it’s a beautiful market to be working in right now, it’s a moment of extreme dynamism.
WWD: Let’s talk about your retail strategy. How many doors do you count and what’s next retail-wise?
L.B.: Overall, we are available at 2,000 doors globally, so it's a selective distribution, really. Among these, we have seven consolidated boutiques — in Milan, Rome, Paris, Miami, Dubai and two in China. We have recently opened two other stores in China and launched another one in November, so we will end the year with 10 flagships. They are not small only numerically, but also in value, as our retail sales don’t even reach 10 percent of our total revenues. As Acqua di Parma is a fragrance label but also a lifestyle brand, since we have different product categories, for us the expression of retail is very important, it is really the place where we can convey our values and brand codes. Therefore it will be an important asset of development: in our five-year business plan we have included a retail expansion that will enable us to reach 50 flagships globally in the next five years. So for the moment we have these boutiques, around 100 counters in department stores as Le Bon Marché in Paris and Rinascente in Milan, which have the exact feel and look of our stores and our own sales assistants, and then the rest is wholesale distribution in independent perfumeries and chains across the world. We’re growing a lot in travel retail, which is extremely relevant for us as our audience of reference is sophisticated and travels. We have a massive development plan for travel retail, starting from Europe where we already have a strong positioning and we will now expand also in North and South America and Asia. And lastly, the e-commerce: we have an e-shop that covers Europe, including Eastern European countries, we will launch it in the U.S. and Middle East next year and we are in China through Tmall, so we are gradually expanding our online presence in the main regions that are strategic for us.
WWD: Why did you pick Miami to open a store in the U.S.?
L.B.: To be honest, that store opened a month after I joined the company so obviously it was a decision that was made before my arrival, but the logic behind it was not wrong as it was a “test-and-learn” experiment. Being small, sometimes we need to test if a concept works before making big decisions and rolling out in the U.S. So this boutique inside the Brickell City Centre, which was just launched at the time, was an opportunity to have a presence in a beautiful mall, in an increasingly growing area of Miami, with a target of a business audience which was perfect for us, and to have a unit that could give us an idea of the market conditions there. Plus, since we perform well in the U.S. and our brand awareness is growing, it helped us to understand if it makes sense to start thinking about a wider retail rollout. Additionally, Miami is less expensive compared to New York and helps us to intercept the flux of customers coming from Latin America, where we are also very strong. And I must admit this has been a good exercise because during these two years this store helped us understand what works and what doesn’t in terms of products, visual merchandising and enabled us to make experiments. We are still a small- to medium-size company, which is our strength because we’re still agile to implement this kind of test-and-learn approach.
WWD: How can you combine luxury with online? What’s the strategy for your e-commerce?
L.B.: I could talk for days about this. Unless you’re a super-loyal customer and you use e-commerce for second-time purchases, testing a fragrance online is difficult, of course. Everybody is making various attempts, including us, with vials and out-of-the-box sampling but a real, immersive experience is still to be conceived.…For me, e-commerce has a very clear role: it must be our most beautiful window, just like the one of our store in Milan, but with a different logic behind it. People need both, can live together and be synergic because sometimes we need different things. We need a physical store to really deliver an immersive experience in the most beautiful and sophisticated Italian lifestyle…and what’s the role of e-commerce? For our loyal customers, and we luckily have many, it’s perfect for repurchases. For instance, with the Barberia collection we work a lot with the subscription model, because men use the same products all over again.…And then it’s a gifting destination, not only for those who know the brand but also for those who are not that expert product-wise but know that Acqua di Parma and its yellow hat box are so beautiful and iconic that whatever is inside, it is going to be appreciated. And our web site communicates these assets in a genuine way and with a minimum of storytelling. Honestly, I don’t believe in editorial e-commerce, I think people want to have practical and real information on a web site, understand the brand values and read its history but in a concise and quick way. It’s not a blog, I have to have an easy, flawless shopping experience, possibly synergic with the off-line with the click and collect service and the similar options we have.
WWD: How much do online sales account out for your total sales?
L.B.: For the moment, we ship only in Europe and online sales account for 4 percent. The worldwide e-business is more relevant, though. For instance, in the U.S. we have strong e-tailing with Neiman Marcus and similar platforms, just like in the U.K. and Germany. So if we consider our e-commerce and e-tail, we reach 10 percent. In our five-year business plan we estimate our e-business to reach 20 percent.
WWD: What is your best seller?
L.B.: Our Colonia, for sure. It is our pillar, our hero product, it has been there for over 100 years. Alone it accounts for 12 percent of our turnover, which is a lot. Our Colonia is the Italian cologne since 1916 and it stays there, untouchable, but it keeps growing year-over-year. It’s really a product that has an incredible strength.
WWD: And this year you have expanded into new categories, launching the Home Collection. Why now?
L.B.: We always had candles in our portfolio, like the cubic ones that have been in our assortment for 20 years, as well as the Murano glasses candles. They have always been part of the lifestyle offer of the brand and part of our DNA, but represent an expensive home fragrance offer. Being very design-oriented and sophisticated, they have accounted for a very small percentage in terms of sales. Those are statement candles, how can you sell them in travel retail, for example? But it’s in front of everybody’s eyes that the home fragrance market is booming, so we told ourselves that with our experience we could provide more approachable candles and diffusers for most of our Blu Mediterraneo fragrances. This was a response to our customers' requests.…This home collection will be available in approximately 60 percent of our global distribution.
WWD: Who do you consider as your competitor?
L.B.: It’s a little bit complicated, because being a 100 percent Italian brand not linked to any fashion house, we are basically alone, there are not that many in this niche industry. But if I have to name a competitor, I can say I look a lot at Diptyque at this moment. I said Diptyque even if it has a different positioning and story — we are 100 years old, they are like 50 years old, we are super Italian and they are hyper-French. We have opposite personalities and worlds, but for many aspects we are similar. We both work in the niche world, they were first in the home fragrance and interior décor business and then launched fragrances while we had the opposite journey, but we both work in a lifestyle dimension. They have retail stores that are very different from ours, but express that lifestyle concept. In many international department stores our counter is just next to theirs, because evidently we are perceived like two completely different expressions of the same world of reference.
WWD: How does it feel to be a woman in your position in Italy? Do you feel any additional pressure?
L.B.: Honestly, I have to say that I don’t feel this gender thing, I know I’m against stream. It’s true that, if you look at the numbers worldwide, women in top roles globally are less than 10 percent, so numbers speak clearly and are ridiculous, but if I consider my personal experience, I have been very lucky throughout my 25-year career as I worked for big and open-minded multinationals. I worked in Beiersdorf, in L’Oréal, in Swatch Group and now in LVMH and all four companies have always been very attentive to the diversity topic, have always had ambitious goals from this point of view. So I have never felt extra-pressure, no. Having said that, we still have a lot of work to do, LVMH has an ambitious program of gender equality.…I really support diversity, but not only in terms of gender, also in terms of education, culture, experience, age: today we have four or five different generations in our company. Being an h.r. is not banal today, putting together the different necessities and expectations.
WWD: What’s your life motto?
L.B.: I have many. I often say “La strada si fa andando,” meaning you define the path as you walk it. We have strategies, of course we think a lot, that’s OK, but at the end of the day, nowadays the world moves so fast that we need to do that “test-and-learn” approach I mentioned before. I’m not saying not to have strategies, we need to have a clear vision, goals, ambition, but we also need to start doing things. So we progress by doing, then while doing things we will learn, perfect our strategy, have the flexibility to adapt to situations, understand what works and what doesn’t and so on. Many times you spend more time studying every single detail and taking decisions rather than doing things. So luckily sometimes I have this healthy pragmatism, which is often needed and speeds up the processes.
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