INNOVATION DRIVES FASHION FORWARD

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"Every Ten Italians Have a GEOX!" | Exclusive Interview with Mario Moretti Polegato, the Founder of GEOX

March 17,2020

A pair of "breathable shoes" makes GEOX a model of global footwear innovation. This famous Italian casual shoe and clothing brand identified by its waterproof and breathable fabrics has already taken root in the Chinese market and gained a large number of loyal fans. The secret of its success is not only the obvious "Italian origin", but also "technological innovation"!

When sharing his entrepreneurial story with Luxe.Co. Mario Moretti Polegato, the founder of the brand, said, "A lot of people ask me why GEOX is so successful and it’s because we have the technology!"

This exclusive interview not only shows Polegato's original intention in starting the business, but also opens a window to understand how this overseas brand seized the development opportunities in China and met a series of challenges, including production and manufacturing, distribution channel, brand localization marketing, digital retail, brand image promotion and reshaping.

From "Breathable" Rubber Sole to 35 Patents

The unexpected trial to dig holes in his rubber sole to dissipate heat in his shoes inspired Mario Moretti Polegato to successfully develop "breathable" rubber sole technology and officially establish GEOX in the early 1990s. As Polegato explained,

"95% of the people in the world still prefer to wear shoes with rubber soles due to the comfort, but it is difficult to eliminate the odor problem caused by sultry heat, and only GEOX can provide a patented solution."

GEOX’s emphasis on technology is supported by a professional research team, including a science and technology innovation laboratory and a small factory with an annual output of 80000 pairs of shoes at its headquarters in Italy. GEOX invests 2% of its sales in technology and product development every year, and it has generated 35 different related patent technologies and more than 10 of the patent protection applications in the world.

However, the most intuitive feeling of GEOX for consumers is, of course, comfort.

"One in 10 Italians Wears Our Brand"

“Looking at the Italian market alone, the population of Italy is 51 million and the annual sales volume of GEOX reaches 7.5 million pairs; therefore, one in every 10 Italians is wearing our brand." Polegato shared this data with Luxe.Co.

As far as the global market is concerned, GEOX has successfully spread to 110 countries around the world. It had net sales of 827 million euros and an EBITDA of 38.3 million euros at December 31, 2018.

The rich shoe product portfolio and comfortable and breathable feeling have led to many Chinese consumers describing their GEOX shoes. For example,

"These new GEOX small white shoes are especially suitable for walking tourism"; "GEOX shoes are suitable for my mom"; "GEOX high-heeled shoes are suitable for beginners”; "I buy all of my daughter’s shoes from GEOX because it is well-known for the development and comfort of feet."

Sustainable Influence Behind the "Giant Panda Journey"

The purpose of Polegato's flight to China is to announce the global launch of GEOX’s cooperation with the World Wildlife Foundation (WWF) for National Panda Day on October 27 and to hold a limited-time exhibition of a "Giant Panda Trekking Trip" in Sino-Ocean Taikoo Li Chengdu.

In addition to Zhu Yilong, a Chinese actor, who is WWF's global ambassador, going to Dujiangyan to look for traces of wild giant pandas, GEOX has also invited star volunteers, such as Ning Zetao and Lin Yun, to call on everyone to protect endangered and rare animals and has also requested the presence of Chinese fashion blogger, GogoBoi and his daughter at Chengdu to shoot short films. This celebrity effect has greatly raised the brand’s profile and started a heated discussion among Chinese consumers.

As a national treasure of China, the panda makes it easy for every Chinese person to find a natural sense of amity and belonging, while the cooperation with WWF responds to the growing global call for sustainable development. For every pair of GEOX x WWF series commodities sold during the period from August 1, 2019, to September 30, 2021, GEOX will donate 2 euros to WWF and guarantee a total annual donation of at least €200,000 for the protection of endangered animals.

Besides, GEOX, together with WWF and One Planet Foundation, have jointly launched a charity sale of bracelets for the “Giant Panda Trekking Trip” program. All the proceeds from the charity sale will be donated to OPF for projects to protect the natural environment. "We want to get consumers involved in activities that are sustainable and environmentally friendly," said Polegato.

The brand's latest capsule children's shoe series, GEOX x WWF, is made of recycled cotton fiber or leather from certified leather suppliers, LWG, while the sole is made of 20% recycled rubber. Moreover, the packaging box and tag are made of FSC certification paper with pure plant fiber, and the filler is made of 100% recycled paper.

In the interview, Polegato repeatedly stressed "sustainability" and claimed that "in addition to continuous investment in innovation and patented technology, we will continue to follow up sustainable projects, which is also the cornerstone of our group philosophy."

According to the "2018 China new generation fashion consumption white paper" released by Luxe.Co., 41.9% of young fashion consumers think that "social responsibility" has a huge impact on their perception of a brand. Companies’ concern for the environment is a powerful tool to increase customers’ loyalty to the brand and lead to profit growth.

Iterating through China's Changing Landscape

It could be sensed during the interview that China is one of the most important strategic markets in Polegato's mind. In 2002, after a significant amount of research, he finally formed a strategic cooperation with AoKang, the second-largest shoe manufacturer in China at that time.

Polegato investigated many shoe companies in China before finally forming the strategic cooperation with AoKang and establishing the first of GEOX’s franchise stores in China on September 12, 2003. GEOX then opened 46 direct-sale stores and 3 Tmall flagship stores in China by cooperating with the Belle group and Zhongshan Baosheng Shoes Industry and also settled in Jingdong.

In 2018, GEOX began a thorough reform in terms of strategy, organization and distribution. This means that more stores will be opened in the future, a small number of franchise stores will become self-operating, and some poor-performing stores will be closed. In the interview, Polegato proposed strengthening the brand image of "premium" and "patent technology" in the form of direct flagship stores and planned to open more direct-sale stores in Beijing and Shanghai in the future.

Prepare for the Challenge

The category of GEOX products has been extended beyond the shoe market to a clothing line, with the introduction of "breathable" jackets. Clothing accounted for 10% of GEOX’s sales as of 2018. It is gradually transitioning from a shoe brand to a full category fashion brand.

Since the origin of the word GEOX is based on “GEO”, the ancient Greek word for earth, and “X”, which stands for technology, sustainability and technology have always been deeply rooted in the DNA of the brand, and fashion will be the next major target of GEOX.

Polegato said frankly: "We are adjusting our brand strategy. GEOX is famous for its comfort, but we also want people to know that GEOX is fashionable. Therefore, we need to invest more in marketing, communication and product design." For example, in the choice of "people", the latest executives introduced in recent years are veterans of the luxury industry.

Digitalization is one of the keywords of GEOX’s strategic plan from 2019 to 2021. The brand is expected to adjust the global budget ratio of digital and traditional marketing from the previous 3:7 to 6:4. Specific uses include strengthening digital communication with consumers, using data to reach new consumer groups, and improving brand awareness.

GEOX actively spreads the brand concept and latest trends of "sustainable development" and "patent technology" online through its official WeChat account and interacts with stars and KOL via its official Weibo. In addition to the daily push, a Mini Program for the "Giant Panda Trekking Trip" activity was especially launched on the WeChat terminal, providing users with "Exhibition Appointment", "Online Exhibition", "Game Interaction", "Public Goods Sales", "Biodiversity Knowledge" and other functions and experiences.

Offline, GEOX also tries to transfer the brand concept to users through a time-limited exhibition of a "Giant Panda Trekking Trip", which offers 720-degree immersive exhibition interaction, and an animal model production experience, as well as participating in the international children's fashion show.

In terms of cooperation between stars and KOL, in addition to daily wear, they also frequently cooperate with famous fashion magazines. The brand invited two Chinese fashion bloggers to shoot a short video during Milan Fashion Week this year.

 

More interview recordings:

Luxe.Co: This is the second cooperation between GEOX and WWF. How does GEOX choose its partners?

Polegato: The cooperation is based on the two sides sharing the same goal, which is the hope that the next generation will pay attention to endangered species and understand the significance of protecting all species, and the earth on which human beings live.

Luxe.Co: What are the competitive advantages of GEOX?

Polegato:

One is technology and the other is its Italian origin. We often find that Italian shoes are coveted, especially women's shoes. We also find that many Chinese tourists buy shoes in Italy because they are made of superior leather with beautiful and creative designs. GEOX uniquely combines Italian design and brand patent technology. Although there are many Italian brands of shoes in the Chinese market, they have no technological support. Besides, GEOX has price advantages compared to luxury brands, being positioned at the middle- and high end of the market.

Luxe.Co: How do you balance patent technology and fashion trends?

Polegato:

Technology and fashion are two different orientations. From another perspective, we are also a fashion brand. The brand concept of GEOX is not to design gorgeous, fashionable shoes, but to produce shoes that all people can wear daily, whether they are working or travelling.

Luxe.Co: How does the GEOX brand improve users’ viscosity and loyalty?

Polegato:

We have a special CRM team in every country, who communicate with local customers and we have a professional system to manage these customers. Due to the performance of the CRM system, the brand viscosity and repurchase rate in China are higher than other brands.

A market survey conducted by GEOX in 2018 showed that GEOX’s brand awareness had reached 65% in the market in which the brand operates. We enjoy the highest brand awareness in the same category.

Luxe.Co: As sustainable development is one of the most important DNAs of the brand, will more action be taken toward sustainable development in the future?

Polegato:

Our sustainability starts with the raw materials. Recycled materials, such as plastic and rubber bottles, are used in GEOX's footwear and apparel products. All our products will adhere to the concept of sustainable development.

Besides the fashion industry, GEOX is also involved in future technology. In 2018, we sponsored the Dragon Racing in Formula E and developed high-tech racing footwear for the team. The drivers’ hands and feet generally sweat a lot due to the great pressure. The body temperature can be better regulated by improving the breathability of the racing suit and racing shoes, which improves the driver’s concentration. Our drivers wore the latest Aerantis series with a built-in "ventilation engine", which were sent back to Montebelluna headquarters for further research and development by the engineering team.

As far as we are concerned, we do not sponsor Dragon Racing for marketing purposes to make the brand more famous, but as an investment to drive future product research and development. Electric cars are the future and sustainability is the future of our products.

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