Business models are a way to simplify the reality. The truth is that companies are constantly learning from each other. For example, luxury brands are improving their supply chain following the example of vertical retailers. And so more and more fast fashion companies are investing in their own unique style. Some are following the route of fashion designers. Then you have to add the fact that the industry itself is very dynamic. What we can do is take a picture of our companies that are competing today, but the way that they compete next year will be different. So that business models may help to position the different companies, and understand the sources of their competitive advantage. The premium brands identify a quite heterogeneous group of companies that were born as a result of a division of an entrepreneur, and the control of distribution, distributive and manufacturing realities more than as a consequence of the intuition and inspiration of a designer. Here we mainly find brands that have a fantasy name, like the American Coach or the Italian Diesel. We may have designer brands that have a lower position than the European ones and base their competitive advantage on the right marketing mix. But here again, as I said, we have a lot of differentiation. So we have companies that are mainly based on outsourcing and wholesale. But we have, as well, the Italian, premium brands, such as Pinko, Patrizia Pepe, Liu Jo, Twinset that produce in Italy, because of a proximity factor with that supplier that allows them to have more flexibility and those products with higher level of fashionability. We have companies that are pure wholesaler, so they don't have their own stores. But we also have brands such as Maxx and Kohl, that belongs to MaxMara group, that is only selling to its own store. Somehow the common value proposition is in the right combination between a product that is trendy, updated, but not extreme in terms of fashionability, a price that grants the customer a right value for money. So, you spend some money, but you also have a value, because there is a control of the supply chain and then the right service to the customer, which means the right delivery to the store, the right creation of an experience that is involved in the physical store and in the digital environment. It is worth it to notice that this pretty complex and heterogeneous class is the one that today is growing the most. And this is because for current customers searching for mix and match, so their own unique style, the contemporary brands, which is another way to refer to premiumpress, offer a product that you may buy if you want to be somehow different. So it's perceived as less commodity than the offer of the mass market, but in the meantime you can also change more often than the luxury brands. So it will require you less investment. Over the years, these companies have understood the importance of building their own unique style and filtering the trends through their particular eyes. But moreover, they understood the importance of creating an emotional storytelling. So having a strong and unique concept in their communication is fundamental, you know, to engage the customer. For example, the French company The Kooples based its success on the identification of this idea of contemporary couples that tell their true story, that is a story of communication but also reflects the fact that the product and this rock bohemian attitude intersect. Or Italian brands such as Liu Jo and PINKO use top models in their communication like Kate Moss for Liu Jo or Alessandra Ambrosio for PINKO campaign in order to express prestigious causes that enhance the customer experience. To summarize, this is a very successful business model that creates room for a new breach market segment.
