Prada Strategy Report by Isabella Honey Read

Prada Strategy REPORT fashion business contexts 2 March 2022

Isabella Honey Read (Prada, 2019)

Contents 01 Executive Summary

02 Strategic Direction

03 Key Functions

04 Current Performance

05 Future Plans

18 2

(A$AP Rocky, 2021)

01 executive summary

(Printemps, 2022)

This case study is an appraisal of Prada as a brand and details Prada’s strategic direction, key functions, and performance within the current fashion landscape. The Prada Group consists of ve luxury brands: Prada, Miu Miu, Church's, Car Shoe and Marchesi 1824. Prada was founded in Milan, Italy in 1913 by Mario Prada (current CEO Miuccia Prada’s grandfather) (Selfridges, 2018). Mario Prada sold luxury leather bags, trunks and travel accessories earning Prada the title of ‘O cial Supplier of the Italian Royal House’ (Yaeger, 2021). Prada’s identity is rooted in tradition yet synonymous with class, luxury and innovation, qualities which give the brand a strategic advantage. Prada was founded on three core brand values: creative independence, transformation and sustainable development (Prada, 2022). These three values are re ected in their core competencies i.e. innovative design, authentic luxury goods, a uni ed customer experience and high-quality materials, in particular leather. In fact, Prada owns 5% of the European market share in luxury leather goods, ranking 4th overall (Statista, 2019).

ffi

(Wonderland, 2019)

Another icon of the Prada brand is their use of Nylon. Prada’s synonymy with Nylon began when Miuccia Prada designed her rst bag, a backpack called the Vela (Yaeger, 2021). The Vela backpack went on to become a best seller attracting a new audience of younger consumers. In 2019, Prada reimagined their use of Nylon in their Re-Nylon collection a sustainable range of bags consisting of a tote bag, shoulder bag, belt bag, and two backpacks (Yaeger, 2021).

(Prada, 2022)

02 strategic direction

(Prada, 2019)

In 2020, Prada su ered a 93% loss of revenue after “one of the most challenging years for the fashion industry on record, marked by declining sales, shifting customer behaviour and disrupted supply chains” (Mintel, 2021) (McKinsey& Company, 2020). The lack of international tourism from China and the Middle East to Europe has massively impacted Prada, causing less footfall to their physical stores and resulting in an increase in demand for digital retail and the need for online presence. This is re ected in Prada’s current strategies, focusing on meta-marketing opportunities including NFTs, AR lenses and virtual in uencers (Napoli, 2022).

(Prada, 2022)

Prada’s most recent partnership is a collaboration with Adidas, in which tradition meets innovation. Adidas by Prada Re-Nylon is an “environmentally conscious innovation” consisting of a recycled 21 piece collection and an NFT art project (Adidas, 2022). The collection uses Prada’s Re-Nylon in support of Prada’s ongoing sustainability initiatives. The collaboration combines the brands’ iconic symbols and unites their consumers while building on Prada’s established sportswear customer base from their Linea Rossa collection. This year, Prada took a dive into the meta-verse through the use of NFTs and virtual in uencers. In their Rethink Reality fragrance advert, a virtual in uencer named (Adidas and Prada, 2022)

‘Candy’ starred as their digital muse (Napoli, 2022). Alongside the Adidas collection, Adidas for Prada re-source was also released, in a “ rst-of-its-kind NFT project featuring creatorowned art, in collaboration with digital artist Zach Lieberman" (Adidas, 2022). The project allowed for co-creation and enabled the brand communities to contribute to a large scale artwork. Three thousand consumer submitted images were selected, manipulated and minted as NFTs for free. The selected images were merged into one massive patchwork NFT, designed by Zach Lieberman. The nal image was auctioned on SuperRare and displayed as an installation at Prada and Adidas agship stores (Princess, 2022).

Another shift in consumer behaviour is the concern around sustainability and transparency. In 2021 Google searches for the “impact of climate change” hit its peak (Napoli, 2022). According to McKinsey (2020), more than three in ve consumers said brands’ promotion of sustainability was an important factor in their purchasing decisions. The Prada Group began their sustainability strategy in 2019 by signing The Fashion Pact, a CEO-led alliance with a common agenda across three environmental pillars: Climate, Biodiversity and Oceans (The Fashion Pact, 2020). Prada’s current strategy revolves around their Re-Nylon project, in which their goal is to “convert all virgin Prada nylon into Re-Nylon by the end of 2021” (Bertelli, 2020). Prada Re-Nylon fabric (Econyl®) is produced in partnership with the Italian textile producer

10 fi

(Prada, 2019) fi

Aqua l. Econyl® is a ‘regenerated-nylon yarn’ that can be recycled again and again and is made from recycled plastic ocean waste (Prada Group, 2019). To promote the Re-Nylon Project and display the process behind it, National Geographic (Prada’s Storytelling Partner) produced a limited documentary series titled, What We Carry (Prada News, 2019). The ve episodes are available to watch on the National Geographic website, Prada’s YouTube channel and their website. Part of the proceeds from Prada Re-Nylon collections are being donated to UNESCO, in a collaboration called Sea Beyond (Yotka, 2019). Sea Beyond is an educational scheme devised to raise awareness and develop international understanding about sustainability and ocean preservation (Prada, 2019).

03 key functions

(Prada, 2020)

(Snapchat, 2021)

(LG & Prada, 2008) 13

04 current performance

(Prada, 2021)

top 100 best global brands of 2021

most searched logo in 2021

66% revenue increase for the first half of 2021 1st hottest women’s product of 2021

ffi

15 fl

In 2020, after a year of disruptions and a decline in revenue of 93% due to Covid-19, Raf Simmons became Creative Co-Director of Prada (Mintel, 2021). Subsequently, Prada has been doing increasingly well, the brand reported a 66% revenue increase for the rst half of 2021 and is ranked in the top 100 best global brands of 2021 (Lyst Insights, 2021) (Interbrand, 2021). According to Lyst (2021), Prada had the most searched logo on their platform, receiving four times more searches than the previous year. For SS21, Miuccia Prada and Raf Simons unveiled their rst collection as co-creative directors which showcased the triangular Prada logo. Online trends across TikTok and other social medias have helped Prada reach a new audience of Gen Z consumers. The online obsession with the naughties and nineties as seen in the Y2k fashion trend has brought the Prada Re-Edition 2000 and 2005 Re-Nylon bags back in style. Prada is the fourth ‘hottest’ brand on Lyst’s Fashion’s Hottest Brands and Products Q3 2021, with Prada’s ra a tote bag topping the list for the women’s hottest products thanks to the crochet craze amongst in uencers on TikTok and Instagram (Lyst Insights, 2021).

4th Hottest brand 2021

(StockX, 2020)

Prada has partnered with Sprinklr, in their digital- rst strategy to unify digital marketing and customer experience (Lang, 2022). Since the implementation of Sprinklr’s AI-powered research to target, reach and engage with younger audiences, Prada’s brand visibility across social media and online has increased (Sprinklr, 2020). Prada’s site tra c has surged by 107% and tra c to the Chinese site by 259% (Prada, 2021). Prada’s digital fashion week shows have also been extremely well received. The Men’s SS22 show on IGTV gained 2.9m views. As a result, Prada ranked rst in the IGTV Men’s Fashion Week category and rst on Reach and Engagement Rate during Fashion Weeks (Prada, 2021).

ffi

(Prada, 2022)

(Splash News, 2021)

Since signing the Fashion Pact Prada have been committed to improving their sustainability agenda, according to Prada’s chairman, Carlo Mazzi “Sustainability cannot be simply a marketing tool” (Mazzi, 2019). In 2019, Prada became the rst luxury retailer to sign a sustainability-based loan, which means if they don’t deliver on their environmental targets they will lose out nancially (Chan, 2019). Prada’s key environmental initiatives include the reduction of greenhouse gas emissions and investment into energy e ciency with the ultimate goal of ghting climate change (Prada, 2021). 100% of Prada’s electricity usage in Italy comes from renewable sources and they recently became the brand with

the highest number of LEED certi cations in the high-end luxury sector (Prada News, 2022). Prada’s Re-Nylon products save 70,000 barrels of petroleum and reduce 65,100 tons of CO2 emissions for every 10,000 tons of Re-Nylon used. In Autumn 2021, Prada debuted their organic denim collection which featured a line of denim pieces made from certi ed 100% Global Organic Textile Standard cotton. The cotton was harvested from an organic farm which avoids the use of fertilisers and pesticides to minimise its impact on the environment. The denim was dyed using the ‘Acquasave’ process which requires less water, saving 10 litres per meter of fabric (Viberg, 2021).

ffi

(Prada, 2021)

05 future plans

(Prada & Riders Republic, 2022)

Prada’s future promotional strategies involve increasing their ecommerce presence and driving consumer engagement through personalised customer experiences. Prada recently pushed further into the metaverse by partnering with Ubisoft’s outdoor multiplayer sports game Riders Republic, which allowed players to dress their avatars in Prada branded sportswear (Tan, 2022) (Benissan, 2022). Prada’s brick-and-mortar strategy revolves around making stores a brand hub, in which it becomes a brand enhancer, communication tool and home of the brand (Prada, 2021). As international tourism is still recovering its important for luxury brands to engage with local consumers (McKinsey & Company,

(Prada, 2021)

2020). Therefore Prada is using retail experiences that are re ective of local values to build an audience of communityfocused consumers. Prada recently took over a local wet market in Shanghai by wrapping everyday essentials in specially designed Prada packaging and rebranding the frontage with their signature prints and motifs. The transformation represented “a way for the brand to meet consumers on their terms, taking the brand messaging directly to them and communicating that they understand the nuances of their culture and locality” (Saunter, 2021). The campaign will be rolled out in other fashion cities like Paris, London and New York, and the format will be adjusted to provide an authentic, local experience for each city.

references • Selfridges (2019) A Brief History of Prada. Selfridges. [Online] [Accessed on 5 March 2022] https://www.selfridges.com/GB/en/features/articles/content/a-brief-history-ofprada/ • Yaeger, L. (2021) 'A History of Prada and Nylon—How the Textile Earned Its Fashionable Place'. [online] Vogue. [Accessed on 5 March 2022] https://www.vogue.com/article/ prada-nylon-handbag-history • Prada (2022) Prada LinkedIn. LinkedIn. [Online] [Accessed on 2 February 2022] https://it.linkedin.com/company/pradagroup. • Statista (2019) Luxury Leather Goods Europe. Statista.com. [Online] [Accessed on 9 February 2022] https://www-statista-com/luxury-goods/luxury-leather-goods/europe#keyplayers • Mintel (2021) Prada pro ts drop 93%. Mintel. [Online] [Accessed on 1 February 2022] https://reports-mintel-com.mmu.idm.oclc.org/sinatra/oxygen/display/id=1070647? fromSearch=%3Ffreetext%3Dprada • McKinsey&Company (2020) The State of Fashion 2021. [Report] BoF and McKinsey&Company. [Accessed on 2 March 2022] https://www.mckinsey.com/~/media/mckinsey/ industries/retail/our%20insights/state%20of%20fashion/2021/the-state-of-fashion-2021-vf.pdf • Napoli, C. (2022) Marketing Forecast 2022. [Online] WGSN. [Accessed on 2 March 2022] https://www.wgsn.com/insight/article/92811 • Adidas (2022) Adidas by Prada Re-Nylon. adidas.com. [Online] [Accessed on 10 February 2022] https://www.adidas.co.uk/prada • Napoli (2022) Marketing Forecast 2022. WGSN. [Online] [Accessed on 3 February 2022] https://www.wgsn.com/insight/article/92811 • Adidas (2022) Adidas for Prada re-source. Adidas.com. [Online] [Accessed on 20 February 2022] https://www.adidas.com/prada-nft. • Princess (2022) Adidas x Prada NFT Partnership will Feature Digital Artist Zach Lieberman. NFT Evening. [Online] [Accessed on 20 February 2022] https://nftevening.com/adidasx-prada-nft-partnership-will-feature-digital-artist-zach-lieberman/ • McKinsey & Company (2020) Survey: Consumer sentiment on sustainability in fashion. [Online] McKinsey & Company. [Accessed on 2 March 2022] https://www.mckinsey.com/ industries/retail/our-insights/survey-consumer-sentiment-on-sustainability-in-fashion • The Fashion Pact (2020) The Fashion Pact: First Steps to Transform Our Industry. [Online] [Accessed on 17 February 2022] https://thefashionpact.org/wp-content/uploads/ 2020/10/038906e111abca13dce4c77d419e4f21.pdf • Bertelli, L. (2020) Prada Re-nylon. Prada Group. [Online] [Accessed on 2 February 2022] https://www.pradagroup.com/it/sustainability/environment-csr/prada-re-nylon.html • Prada (2019) Prada Re-Nylon. [Online] [Accessed on 17 February 2022] https://www.pradagroup.com/content/dam/pradagroup/documents/2020/Sostenibilita/Re_Nylon/inglese/ 2019_Prada%20Re-Nylon_2019_Press%20release.pdf • Prada News (2019) Prada Presents The Re-Nylon Project. Pradagroup.com. [Online] [Accessed on 20 February 2022] https://www.pradagroup.com/en/news-media/newssection/re-nylon-project.html • Yotka, S. (2019) 'Prada’s Re-Nylon Project Turns Your Favorite Backpack Into a Sustainable Accessory'. [online] Vogue. [Accessed on 18 February 2022] https:// www.vogue.com/article/prada-re-nylon-sustainable-nylon-econyl

references • Prada (2019) Sea Beyond. pradagroup.com. [Online] [Accessed on 18 February 2022] https://www.pradagroup.com/en/sustainability/cultural-csr/prada-renylon-sea-beyond-unesco.html • Prada (2021) Prada Creativity and Product Development. pradagroup.com. [Online] [Accessed on 22 February 2022] https://www.pradagroup.com/en/ overlay-pages/integrated-value-chain-1.html • Bumpus, J. (2008) 'Prada's Mobile Style'. [online] Vogue. [Accessed on 22 February 2022] https://www.vogue.co.uk/article/prada-by-lg-group-phone • Prada (2020) People. Jobs.pradagroup.com. [Online] [Accessed on 14 February 2022] https://jobs.pradagroup.com/content/PEOPLE/?locale=en_US • Prada (2020) Prada Academy. Jobs.pradagroup.com. [Online] [Accessed on 14 February 2022] https://jobs.pradagroup.com/content/PRADA-ACADEMY/? locale=en_US • Prada (2020) Production Sites. pradagroup.com. [Online] [Accessed on 14 February 2022] https://www.pradagroup.com/en/group/sites.html • Prada Group (2018) Prada Group Company Pro le March 2018. Prada Group Company Pro le. [Online] Prada Group. [Accessed on 8 February 2022] https://www.pradagroup.com/content/dam/pradagroup/documents/Group_Pro le/Company%20pro le%20Prada%20Group_marzo_ENG1.pdf • McDowell, M. (2021) Snapchat boosts AR try-on tools: Farfetch, Prada dive in. Vogue Business. [Online] [Accessed on 22 February 2022] https:// www.voguebusiness.com/technology/snapchat-boosts-ar-try-on-tools-farfetch-prada-dive-in • Wadham, C. (2021) Sales tumble at Prada. Drapers. [Online] [Accessed on 22 February 2022] https://www.drapersonline.com/news/sales-tumble-at-prada • Prada (2022) Prada History 2011. [Online] [Accessed on 14 February 2022] https://www.pradagroup.com/en/group/history.html • Prada (2019) 2018 Social Responsibility Report. [Online] Prada Group. [Accessed on 22 February 2022] https://www.responsibilityreports.com/HostedData/ ResponsibilityReportArchive/p/OTC_PRDSY_2018.pdf • Saunter, L. (2021) Innovating Fashion E-Commerce. [Online] WGSN. [Accessed on 22 February 2022] https://www.wgsn.com/insight/article/91513 • Mintel (2021) Prada pro ts drop 93%. Mintel. [Online] [Accessed on 1 February 2022] https://reports-mintel-com.mmu.idm.oclc.org/sinatra/oxygen/display/ id=1070647?fromSearch=%3Ffreetext%3Dprada • Prada (2021) Prada H1 Results Presentation 2021. [Online] Prada Group. [Accessed on 21 February 2022] https://www.pradagroup.com/content/dam/ pradagroup/documents/Shareholderinformation/2021/inglese/H1-2021/Prada%20S.p.A.%20H1%202021%20Results%20Presentation.pdf • Lyst Insights (2021) The Lyst Index: Fashion’s Hottest Brands and Products Q3 2021. Lyst Insights. [Online] [Accessed on 1 February 2022] https:// www.lyst.com/data/the-lyst-index/q321/ • Interbrand (2021) Prada. Interbrand. [Online] [Accessed on 1 February 2022] https://interbrand.com/best-global-brands/prada/

references • Lang, K. (2022) Sprinklr BrandVoice: The Prada Story: Ensuring The Brand’s Future By Creating Uni ed Customer Experiences. Forbes. [Online] [Accessed on 28 February 2022] https://www.forbes.com/sites/sprinklr/2022/01/21/the-prada-story-ensuring-the-brands-future-by-creating-uni ed-customer-experiences/? sh=9cd16342001b • Sprinklr (2020) How Prada Group Leads Digital Innovation for Brands. Sprinklr.com. [Online] [Accessed on 28 February 2022] https://www.sprinklr.com/stories/pradagroup/ • Prada (2021) Prada H1 Results Presentation 2021. [Online] Prada Group. [Accessed on 21 February 2022] https://www.pradagroup.com/content/dam/pradagroup/ documents/Shareholderinformation/2021/inglese/H1-2021/Prada%20S.p.A.%20H1%202021%20Results%20Presentation.pdf • Mazzi, C. (2019) Why Prada Is Stepping Up Its Sustainability Game. [online] Vogue. [Accessed on 28 February 2022] https://www.vogue.co.uk/fashion/article/pradassustainability-initiatives • Chan, E. (2019) 'Sustainability Cannot Be Simply A Marketing Tool, Says Prada’s Chairman'. [online] Vogue. [Accessed on 28 February 2022] https://www.vogue.co.uk/ fashion/article/pradas-sustainability-initiatives • Prada (2021) Climate Strategy. pradagroup.com. [Online] [Accessed on 28 February 2022] https://www.pradagroup.com/en/sustainability/environment-csr/climatestrategy.html • Prada News (2022) LEED Green Building Certi cations In 2021. pradagroup.com. [Online] [Accessed on 1 March 2022] https://www.pradagroup.com/en/news-media/ news-section/prada-group-leed-2021.html • Prada (2019) Prada Re-Nylon. [Online] [Accessed on 17 February 2022] https://www.pradagroup.com/content/dam/pradagroup/documents/2020/Sostenibilita/Re_Nylon/ inglese/2019_Prada%20Re-Nylon_2019_Press%20release.pdf • Viberg (2021) Designer Fashion UK 2021. Designer Fashion UK. [Online] Mintel.com. [Accessed on 7 February 2022] https://reports-mintel-com.mmu.idm.oclc.org/ display/1115465/ • Benissan, E. (2022) Prada to dress gamers in Riders Republic sports world. Vogue Business. [Online] [Accessed on 4 March 2022] https://www.voguebusiness.com/ fashion/prada-to-dress-gamers-in-riders-republic-sports-world • Tan, E. (2022) Digital Download: February 2022. WGSN. [Online] [Accessed on 2 March 2022] https://www.wgsn.com/insight/article/93234 • Prada (2021) Capital Markets Day 2021. [Online] Prada Group. [Accessed on 3 March 2022] https://www.pradagroup.com/content/dam/pradagroup/documents/ investors/capital-markets-day/2021/Prada-Group-2021-CMD-Presentation.pdf • McKinsey & Company (2020) Survey: Consumer sentiment on sustainability in fashion. [Online] McKinsey & Company. [Accessed on 2 March 2022] https:// www.mckinsey.com/industries/retail/our-insights/survey-consumer-sentiment-on-sustainability-in-fashion • Saunter, L. (2021) Local Retail: Shifts & Strategies 2021. [Online] WGSN. [Accessed on 3 March 2022] https://www.wgsn.com/insight/article/92183#page7

image references • Prada (2019) Prada Spring/Summer 2019. [image] [Accessed on 16 February 2022] https://www.anothermag.com/fashion-beauty/11427/the-best-fashion-campaigns-of-the-year-so-

• • • • • •

24 ffi

•

• • •

ffi

• • • • • • •

• • •

far-spring-summer-2019-ss19 A$AP Rocky (2021) A$AP Rocky Prada x adidas Collab. [image] [Accessed on 6 March 2022] https://hypebeast.com/2021/9/asap-rocky-prada-adidas-originals-forum-teaser-info Printemps (2022) Prada Re-Nylon Collection. [image] [Accessed on 6 March 2022] https://www.printemps.com/be/en/edito-news-prada-nylon Wonderland (2019) Prada Resort 19 in the Wonderland Winter 2018/19 Issue. [image] [Accessed on 1 March 2022] https://www.wonderlandmagazine.com/2019/01/24/pradaresort-19-fashion-editorial/ Prada (2022) Prada Re-Nylon Pouch. [image] [Accessed on 6 March 2022] https://www.purseblog.com/prada/prada-re-nylon/ Prada (2019) Prada Re-Nylon. [image] [Accessed on 21 February 2022] https://www.pradagroup.com/en/news-media/news-section/re-nylon-project.html Prada (2022) Prada Candy Virtual In uencer Campaign. [image] [Accessed on 6 March 2022] https://www.prada.com/us/en/pradasphere/fragrances/prada-candy/family.html Adidas and Prada (2022) Adidas for Prada re-source NFT. [image] [Accessed on 21 February 2022] https://www.adidas.com/prada-nft/canvas Prada (2019) Prada Re-Nylon Bags. [image] [Accessed on 21 February 2022] https://i-d.vice.com/en_uk/article/gy4npq/prada-nylon-sustainable-econyl Prada (2020) Prada Resort 2020. [image] [Accessed on 6 March 2022] https://www.thefashionlaw.com/daily_links/daly-links-may-29th Snapchat (2021) Prada Snapchat AR Lens. [image] [Accessed on 23 February 2022] https://www.voguebusiness.com/technology/snapchat-boosts-ar-try-on-tools-farfetch-pradadive-in Prada and LG (2008) PRADA Phone by LG. [image] [Accessed on 26 February 2022] https://www. ickr.com/photos/lge/3285845355/ Prada (2021) Prada Mens SS21. [image] [Accessed on 6 March 2022] https://www.prada.com/ww/en/pradasphere/campaigns/2021/ss-woman-man.html StockX (2020) Prada Re-Edition 2005 Shoulder Bag. [image] [Accessed on 6 March 2022] https://stockx.com/news/how-to-style-pradas-latest-it-bag-multipochette-hoboshoulderbag/ StockX (2020) Prada Re-Edition 2005 Bandoliera Tessuto. [image] [Accessed on 6 March 2022] https://stockx.com/news/how-to-style-pradas-latest-it-bag-multipochette-hoboshoulderbag/ Prada (2022) Prada SS22 Men’s Show. [image] [Accessed on 6 March 2022] https://www.vogue.co.uk/fashion/gallery/prada-mens-ss22-5-things-to-know Prada (2022) Prada Mens SS22. [image] [Accessed on 6 March 2022] https://swfmag.com/prada-ss22-collection-announced-and-we-love-it/.Prada (2021) Splash News (2021) Hailey Bieber with the Prada Ra a Tote Bag. [image] [Accessed on 10 March 2022] https://www.lifestyleasia.com/sg/style/fashion/best-ra a-tote-bag-to-buysummer-trend-2021 Prada Organic Denim Collection. [image] [Accessed on 6 March 2022] https://www.planetfashiontv.com/prada-debuts-organic-denim-collection/ Prada and Riders Republic (2022) Looks from the Prada collaboration with Riders Republic. [image] [Accessed on 6 March 2022] https://graziamagazine.com/us/articles/pradariders-republic-ubisoft/ Prada (2021) Prada Local Market Takeover in Shanghai. [image] [Accessed on 6 March 2022] https://jingdaily.com/prada-wows-with-local-market-shanghai/

Prada Strategy Report

Articles inside

Future Plans