Tuesday, 30 June 2020
Gabriella Centomo, as a pioneer in having started a digitization process in the jewelry sector, in both b2b and b2c, in difficult times, outlines the sector’s current scenario. What has happened in these last few years?
In recent years, paradigms have changed rapidly. Four or five years ago, here in Fair Line we invested heavily in the internet, even launching a b2c website, gioielloitaliano.net, with brands we created in the web and also positioned on Amazon. Three years ago, we also invested in b2b, opening an important gateway in wholesale and starting a digitization process that the sector as a whole was still not taking into consideration. Now, Covid has quickened the process up exponentially and, as anticipated in a webinar with Studio Ambrosetti, the violence of this crisis has brought company digitization forward by 4/5 years. I was probably a visionary, already believing in this investment several years ago.
Fair Line and Covid. How did you get through it and how are you reacting?
To start with, let’s say that the manufacturing world now finds itself having to deal with a totally new way of living and will have to try to optimize investments and make them more efficient. In our company, some things are giving us satisfaction but, broadly speaking, the recovery will arrive in September. During lockdown, we kept on the ball thanks to pre-Covid activities, we even managed a few sales, not only relations. Now that we are back, communication with the customer has been integrated and facilitated. Bear in mind that Fair Line only works on the foreign markets and, at the moment, besides the block on flights, people are worried about travel in general. But we have done ‘resilience courses’ and patience is on our side.
Is there a positive aspect to this moment?
Besides seeing the customers respond well to our digital formula, which is why we are insisting so much on this type of investment, another positive aspect that I see in my colleagues is that, perhaps, we are at last beginning to reason as a team. I love geopolitics and I love to keep up to date. In my opinion, our gold-jewelry company, the districts and the entire supply chain, made up of small, under-funded companies, are starting to reason and work as a team. After 20 years of attempts, I believe that strengthening ourselves in terms of capital and the capital base, is necessary for our survival.
What does an Italian jewelry company need to grow and go forward?
It is always a question of education, intended as knowledge, as the willingness to understand that there are and will be new paradigms. Those who want to grow can no longer avoid it.
Integration between physical and digital, the big topic of these recent months.
The physical part is essential for relations. When you know who your interlocutor is, a trustful relationship has been established. Gold is money. The customer needs to understand who you are, to see your facilities, to know who I send the gold to. Therefore, the physical part is indispensable, it will always be the sine qua non condition. However, on the other side, you always have to have someone who sees things in the same way as you do.
How does Fair Line manage orders?
We only work on foreign markets and as Fair Line, especially in Eastern European countries. Let me give you an example of a customer, a woman, from Romania. At the beginning, she came once a month, now she only needs to come twice a year, buying exactly the same amount of goods but with the tools available now, and trust, she no longer needs to come as often as before. We have a lot of stock and so everything is always ready. I select in the morning and send in the afternoon. We work more with wholesalers than in production.
With the advantage of huge cost savings for the customer…
Of course. The customer saves on costs and lets all its salespeople take part in purchasing. Our part is more challenging, we work in safety but the improvement aspects are very high. We work by weight and we have packages insured for 20,000 Euro and over. During lockdown, we even managed to attract new customers, in Europe, Canada and Mexico.
What, how and where does Fair Line sell today?
As I said, the main market is Eastern Europe. Our product is basic, all in 14 carat gold, sold ready-made, but on a production level, we also use 18-carat yellow and white gold and now also a lot of pink gold which is in high demand. The customers who buy on Amazon are also mainly foreign with 80% of sales made abroad and an average expenditure of between 250 and 300 Euros (we have even reached 6,000 Euros on Amazon). Unfortunately, Italy is still not ready for on-line buying. Fair Line sells products from 80/90 companies in the Italian district, ranging from a basic product to fine jewelry items, always without diamonds. The value of the item is always determined by the value of two elements: the metal, in other words, the gold, and the manufacture. In short, the final price is given by two totals.
Buying by weight, does the variable caused by the fluctuation in the price of gold have a serious effect?
Nothing can be done about the fluctuation in the price of gold. The more geopolitics are unstable, the more the price goes up. It has its own dynamics which we cannot manage and are entirely unpredictable.
Gold and diamond jewelry is therefore always an ideal investment.
Look, I’m taking it wide. One of the reasons why fashion jewelry came out winning from the crisis of ten years ago is that the young people had stopped buying fine jewelry. But it was our fault because we were not able to make them understand that buying jewelry meant buying a financial asset. The younger generations were not taught to understand that if you spend 300/500 Euros on fashion jewelry, that purchase will lose value over time. Fine jewelry, on the other hand, doesn’t, the value remains. But, I repeat, the blame for letting fashion jewelry in lies on us.
As a visionary and pioneer of a b2b and b2c digitization process, what advice can you give to those companies that are now having to face digital?
To be first in line and keep communication high and alive with a lot of activity on the social networks, which are now an extremely valid tool for capturing the young consumer.
Interview by Federica Frosini, Editor in Chief VO+